Making it simple

There's been a noticeable shift of late in mobile carriers' data strategies. They seem to be moving from the nickel and dime mentality of charging customers for content — by the basic data subscription, the download, the monthly application subscription fee and the megabyte — to simpler plans offering packages. In fact, the premium versus non-premium content seems to be disappearing. Now we're starting to see tiered plans with varying amounts of access to applications and content.

ABC/Disney's new deal with Sprint is a perfect example, as well as ESPN's new mobile launch over Verizon Wireless's network. Disney is offering full-episode on-demand streams of hit TV shows like “Lost” and Disney Channel content, while ESPN has retooled the feature-rich sports interface from its failed mobile virtual network for the Verizon Vcast service. Both of those initiatives scream premium content for premium prices, but neither carrier is charging incremental fees. Instead, both are free to subscribers of their unlimited data plans.

The focus seems to be shifting from making money off individual bits of content to spreading the cost of content through broad data subscriptions anchored to new 3G networks. Let's face it, paying an additional fee on top of subscription rates to get a few clips of “The Sopranos” every month is a dumb idea, as is charging a buck here or there to get access to any given content provider's portal.

Admittedly, there is still plenty of content that carriers are selling a la carte, but in most cases, they tend to make sense. Games, ringtones and full-track songs are things customers expect to pay for per download. But even that model is changing. Cingular is now offering two subscription services for music, Yahoo! Music and Napster, though neither is an over-the-air service.

But even in the cases where specific content applications are sold separately, the pricing models have become simpler. T-Mobile offers one browsing plan, unlimited access for $6 per month. You can't get much simpler than that.

The only problem with this new focus on data plans is the cost isn't cheap. Verizon Wireless's VPak service costs $15 per month, while Sprint's Power Vision unlimited plan costs a whopping $20 per month. Although this probably works out to be a lot cheaper than subscribing to several individual premium services on top of a basic data subscription, but $20 a month is still a big leap for customers not fully comfortable with mobile data services.

One consolation, though, is that carriers seem to be throwing compelling content onto their decks. If Sprint's deal with ABC is extended to the other networks, Sprint could have what amounts to all of primetime on the mobile phone. Add that to messaging and browsing capabilities, as well as linear music and TV channels, and $20 starts sounding cheap.

Source: M:Metrics