Why Are Mobile Operators Bowing To Hollywood?
By Mike Masnick, Tue Mar 29 01:45:00 GMT 2005

With the new focus in the mobile world about how content is king, even mobile operators are buying into the hype, and are letting the entertainment set the agenda. It's like letting buggy makers design the rules by which automobiles must drive.

It's always worrisome when companies who should control an industry and drive it forward start buying into the hype created by another industry. It makes them think less clearly. With the content industry claiming every day that content is king in the mobile space, it appears even the mobile operators are starting to buy the hype. This is leading to all sorts of dangerous positions that should only serve to make life more difficult for those operators in the long term and could help to impede ongoing mobile data growth. The content industry is setting up the mobile industry -- and the mobile industry is falling for the trap. This goes beyond just recognizing that everyone will create the content, to the point of realizing that the mobile data industry does not need the entertainment industry's support.

Last week a story was circulating saying that it was the mobile operators who shut down Motorola's planned launch of the iTunes phone, after the operators became worried about how they would get their cut out of the deal. This is a very bad decision, since it's based on the idea that the mobile operators should be media moguls rather than service providers. If the operators are truly service providers, they should focus on giving subscribers the services that they want -- and that includes easy access on their phones to the music they've purchased on their computers (and vice versa).

In a followup to that iTunes phone story, the Associated Press is running a more detailed look at the question of controlling the content on mobile phones, and it paints a much more worrisome picture. It suggests the problem goes beyond the operators, to the content industry itself. While many who are discussing this story are focused mainly on the claims from Disney that it won't support content over Bluetooth out of a fear that people people might share content, what's much more interesting -- and worrisome -- is that the mobile operators are bowing to the content industry's wishes. The article quotes a Verizon Wireless representative, defending that company's crippling of Bluetooth, not as a way to force users to transfer files over the pricey cellular network, but because of Disney's fear of Bluetooth: "When it comes to the cell phone I have to abide by the rules of the content houses."

It's not just Verizon Wireless, of course. Much of the industry seems to have been struck with this disease -- believing all the hype claiming that content is king in the mobile space, even as the business models still shake themselves out. This is a near replay of the Internet's development nearly a decade ago, when the "content is king" claim was made as well. It turned out not to be true, and the folks from Disney are claiming the difference this time is that they're starting out with a business model -- which appears to be locking up the content and charging an arm and a leg for it.

The problem is that they've learned the wrong lessons from the Internet. They think that broadcast-style content was slow to take off on the Internet because they didn't have control over things and couldn't lock it down. However, the real reason is that the Internet is a communications platform -- not a broadcast one. People go online to communicate, not to consume broadcast content. The same thing is true of the mobile Internet -- which is only going to merge more and more with the existing Internet as time goes on. With a communications platform you want to encourage people to communicate. That means sharing content, not making it harder to share content. It means freeing up the ability to communicate by whatever means necessary -- not locking it down so that only a few approved broadcast channels can be accessed.

People aren't buying mobile phones to get content. They're buying them to communicate first. In locking down these phones (and paying for the privilege to do so) the operators are making these phones less valuable -- not more. The operators should be doing what it takes to encourage usage of the phones, which is to enable better systems for communication. That means opening up the platform, allowing more widespread development and not crippling the systems that let people connect. Anything less makes the devices less attractive and less useful and risks doing more damage to the industry by holding back the real potential of mobile data. The content houses are responding as you'd expect: they're trying to protect existing business models by trying to make new platforms act more like the old ones. However, the mobile Internet is not a broadcast medium, and letting the content companies convince mobile operators it is, is like letting the makers of horse-drawn buggies define the rules of the road for automobiles. It stifles the possibilities of the new technology for the sake of protecting an increasingly obsolete business model. That the mobile operators are buying into this view of the world may make the entertainment industry happy, but it means the operators have forgotten who their real customers are and why they're buying mobile service in the first place. Content isn't king. The customer who pays the bills is king -- and when the operators forget that, they're in serious trouble.