Spending even more money on-line

Over the long holiday break, and with four young children, I found myself becoming a heavy-weight consumer of telecoms and on-line services.  First mobile phones for children, on-line purchases of music for MP3 players & on-line gaming subscriptions.  If my spending trends are typical of the rest of the developed world, I reckon 50% of my Christmas spending was carried out on-line, with a non-trivial amount of my budget being spent with telecoms and content companies.  Of course this is what this new industry is betting on.  Not just the migration of purchasing from the high-street to purchasing on-line, but the diversion of other types of spend towards the coffers of the communications, internet and entertainment companies.  

But I suspect that we are hitting a glass ceiling on the amount of spend that can be diverted to the communications companies with the current technology approaches.  The promise of a tightly integrated communications, internet & entertainment industry is still some ways off, and requires the emergence of standard service delivery platforms that allow the dizzying array of potential content providers to get their content to the mass market via the existing communications delivery and charging infrastructure.

But of course once that happens I will probably just end up spending even more money over the holiday season - so perhaps I had better rethink my industry vision!


Posted Jan 07 2008, 02:23 AM by Martin Creaner

Comments

Alexander Titov wrote re: Spending even more money on-line
on 01-16-2008 9:51 AM
I think that telecommunicaiton industry is about information delivery and managing infrastucture for information delivery. When you buy music online, you buy _music (and only pay for it and get it in more convinient way). From my point of view, content is not the prime business for telco company. So far, I don't think that you really spend more money on information delivery.

Regards,
Alex
Martin Creaner wrote re: Spending even more money on-line
on 02-05-2008 7:43 AM
It is a fair piont that you probably don't spend any more money as a consumer, but the value to Service Providers of having content delivery on-line is that it diverts a portion of the money you would have spent in the shop into the coffers of the Service Providers.  Of course they don't get 100% of the revenue (most of it goes to the copyright owners) but if a Service Provider can secure 5% - 20% of the revenue for providing the delivery mechanism then they have added to their top line (and as revenues scale up, to their bottom line)
Mirit Reif wrote re: Spending even more money on-line
on 04-17-2008 3:42 AM
I actually agree with the blog, walled gardens are crumbling, which means people are downloading from the open net. But still their is a wayTelco companies can profit through their existing infrastructure, for billing and payment of these downloads.