The Text Messaging Time Bomb – And Some DRM
I have to admit that I’m usually suspicious of any sort of industry analysis “predicting” market sizes. They’re almost always wrong, they almost never look back and admit how badly they were wrong and (more importantly) why they were wrong. Of course, the main problem is that they aren’t doing any actual “analysis”, they’re just extrapolating, based on current data, and a few assumptions. They never seem to actually think about what other factors may impact what they’re talking about. With that in mind, let’s look at two recent predictions from Ovum, a popular analyst firm. First, they talk about how, due to pricing plans, text messaging revenue is likely to drop. They admit that more people are going to be sending more messages, but it will become tougher for carriers to make money from them. The biggest fear, according to Ovum, is that people will realize (gasp!) that they’ll be able to send emails and instant messages from their mobile phones at a significantly lower cost than SMS. They suggest setting up a “toll booth” that will charge people for everything they try to do with their mobile (thus, lowering the incentive for people to actually use their data connections). This ignores the fact that users aren’t stupid. They realize that email and IM are free on computers, and aren’t likely to be particularly happy if carriers try to suck them dry with additional toll booths.
Next, they come up with a report that talks about the huge market opportunity for wireless MMS content – but only if the content providers start making use of digital rights management technology. This (again) misses the point. The value in having a data connection on your mobile phone and being able to use things like MMS is the ability to connect to other people. It’s not the ability to download content that is available for free elsewhere. Establishing restrictive DRM policies is disincentive to use, will upset customers, and make them less attracted to using MMS in the first place. Sure, it will save someone from passing around an image of Mickey Mouse, but is that really what people want to use their mobile phones for? No. They want to share content that they created with each other – and restrictive DRM policies (and bad pricing policies) will lessen the incentives for customers to actually use these services for what they’re good at – and what is likely to generate real money for the service providers.
