Sunday, 28 September 2008

Bless the BBC

I dropped the BBC Mobile Controller, Matthew Postgate, in a spot a little at the Westminster Media Forum by describing the likely economics of the iPlayer on mobile to be disastrous for the mobile operators. It was not intentional.

Before he curses me too much I’d like to point out two things - I believe the iPlayer to be the single best investment of license payer’s money in my lifetime (more on this in another post); second, that the BBC is providing a very valuable service here to the user, other publishers and also to the operator’s themselves.

The fact is that you can download significant data volumes without even touching the BBC. I use my device for podcasts (all the time), for video watching (occasionally) and for web surfing (all the time). The amount of traffic I consume is prodigious - compared to most users and fair use policies - and the majority is over 3G without a dongle (if you do not know what that is then I am definitely using more data than you are!). There is probably a committee of people at T-Mobile wondering how they can persuade me and others like me to leave for another operator.

The problem for the operator is one of economics. While true that traffic is nowhere near capacity and the marginal cost for each megabyte is tiny, unlimited bundles or near unlimited bundles will mean diminishing margins for each operator in their role as the ISP. To avoid such a categorisation the operators need to undergo radical change but are hamstrung by doing so through a mixture of shareholder constraints and, more signficantly, simple uncertainty about how to avoid it. I am not unsympathetic but the operators need to get themselves in gear (see for instance Nokia's attempted transformation into an internet company) .

There is a large community of independent mobile players out there awaiting widespread promotion and adoption of broadband pricing on mobile access (all you can eat) and frustrated by the operators failure to move towards that end in a large number of cases. Even in the UK where such deals are becoming more widely known they are not terribly effectively marketed leaving the operators half pregnant.

This stifles the market and forces a slower pace on development and innovation on mobile than is the case, for example, in the online world.

BBC’s proposed use of the iPlayer is a catalyst to force the pace of the discussion. Users want it, the BBC wishes to deliver it, only the operators are hesitant. The BBC provides a focal point for the operators to be able to negotiate with - and a reliable partner to be able to do so with - and in doing so helps solve the issue for all of the smaller players in the market. The responsibility of such a discussion is huge of course and one hopes that the BBC secures a decent arrangement.

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