Decius wrote:
] flynn23 wrote:
] ] I stand corrected on metered services. The industry is
] ] moving away from metered and towards flat pricing, and the
] ] reason is that they need stable revenue streams and there's
] no
] ] cap ex to build metered accounting for digital services.
]
] I'm not so sure that you "stand corrected." Accounting
] stability and cap ex restrictions (ie, economic woes) were not
] the reasons I advocated flat rate. My reasoning was that
] people will pay more per month for flat rate then for metered
] rate. So if the telcos are moving that direction for those
] reasons then I'm just as wrong, really... I'm correct only as
] a technicality.

But I think the real driver behind flat rate is stable revenue. You could make the case that there will be both metered and flat at some point, and that flat will cost more, but you'll likely have more metered customers than flat, and that will erode stable and predictable revenue streams.

I can't believe I missed this, because I've been pounding on the fact that the holy grail of telecom/digital media is to extract about $200 from the home each month. You won't be able to do that with metered services, because the flux will play too much with your revenue predictions and cash flow. Why is that important?

Well, for one, you need to be able to give guidance to investors. That's probably today's key driver. But another factor will simply be profitability. Metered services won't be as profitable because the revenue will be too tied to actual use. If you crimp down on the service (only offering 256K uploads, like what we're seeing nowadays in the cable HSI world), but you've kept the cost of the service flat, then you've effectively reduced your expenses and improved your margins, AND you know exactly how much revenue you're going to have this quarter.

Given that, I'm totally changing my stance on it. I don't think metered services will ever make it. And I now think that cellular data (which right now is meterd) will all go to flat within 6 months.

RE: Here Comes the Real Fun for Telecom