Operators Realize Angering Subscribers Isn't Such A Great Idea
By Mike Masnick, Thu May 26 23:00:00 GMT 2005

As anger over sneaky mobile content practices grows, more operators are realizing that it's a crisis waiting to happen. US operators follow those in the UK by trying to stamp out the practice quickly. However, will they be able to resist the easy money?

Back in February, it seemed likely that the great ringtone success was ripe for a fall. Providers were either jacking up prices to head-scratching levels, or ringtone providers were using sneaky tricks to make people think they were getting a free or cheap ringtone, when the fine print meant they were actually signing up for a weekly or monthly subscription service. This resulted in lots of angry customers, including some who sued after believing they were being mislead by advertisements.

In response, mobile operators in the UK put together a a code of conduct for operators to try to get them to stop doing business with providers who use such under-handed methods. Two industry groups in the US have now come up with a similar code of conduct designed to get operators to only work with partners who are more upfront in their content selling practices.

While it's good to see operators around the world coming out with such guidelines (before regulators stepped in and forced them to), it's still upsetting that these guidelines were even needed. The fact that it wasn't common sense that some of these practices were destined to anger customers shows how too many operators are focused on short-term content profits, rather than long term strategic thinking. In the meantime, it's not clear the guidelines are doing very much. One of the companies accused of using similar tactics appears to only be increasing its advertising spend these days, leading plenty of people to sign up -- but they tend to cancel service after just three weeks.

Again, this seems like a very short-term strategy -- looking to exhaust the market as quickly as possible, rather than building up a sustainable, satisfied clientele. There is, clearly, a market for mobile content. However, charging ridiculous prices and tricking users isn't the way to develop that market. Operator guidelines are a good first start, but only if they're followed. A better overall result would be recognition by the companies in the space that their long term prospects would be much better if they were honest with their customers.