Not if the cariers can help it... As this correspondent points out, it's clear to everyone that phone service (or web access) is a dead end from a revenue perspective. Everyone from cell phone companies to cable companies are basing their revenue models on value added revenue streams, which he boils down to two things: content and ads. He's right - it won't work.
With content, cell phone and cable companies both seem to think that the "walled garden" approach - blocking users from accessing content except through the company/provider's walled garden - will reap huge benefits. Their business models right now have people buying music tracks for $2.99 vs. iPod's $.99 - and not being able to upload their own content they already paid for. Cell companies are safer than cable companies, which provide expensive access to VOD on their systems compared to free or cheap online, but they are all ultimately stuck with the same problem AOL had - trying to force people to stay on the company farm.
AOL ruled the online world by being the easy choice for newbies in a complicated online world. Access was slow and hard without support, content was spotty online, and the web was green. But as the online world developed - access got easier and speeds got faster, web content got better, and more of the content on AOL became available online - the need for training wheels - especilly EXPENSIVE training wheels - became much, much less. AOL became irrelevent - they couldn't force users to stay in their walled garden, and there was no compelling reason to do so. And people have been leaving ever since - the only thing keeping them being their email address. (Phone numbers, incidentally, are now portable, much to the distress of cell phone operators.)
Cable companies have a leg up - they provide high speed access and other services direct to the consumer - but they are next in trouble. As more and more video is available on demand online, what value does the cable package provide? I would rather cut my massive $100+ cable monthly bill to $.99/use the ten times a month I want a movie and watch free ad-supported streaming direct from the cable channels - who wouldn't? The raging debates in the cable community over a la carte programming miss the point... the incredible difficulty of getting carriage for all but the most successful channels has shut the door on new channels and innovation, so all new video content is launching on demand, on the web, or both. Comcast is to harsh a gatekeeper for a new channel to deal with - even the ESPN's and NBC's of the world have highly publicized fights with the cable companies. No, cable's hubris rivals that of the phone companies and AOL in the past. Netflix will offer an on-demand service at a similar price point, and who needs cable?
The cell phone companies and their strangling of music is the same thing. The iPod/phone combo that everyone knows makes so much sense won't happen - cell phone software is too complex and buggy, and the carriers business models depend on the ridiculous pricing they enforce now - and delude themselves into thinking customers are 'willing to pay'. For years, they have built their business on the bottom line understanding that the consumer was basically locked in - it's a pain to switch. But it's getting easier. With number portability, there are only two things propping up the walled garden.
Cell phone music purchases are based on two major hidden facts - kids with no credit cards buying ringtones on their phone bills, and the deliberate restriction of functionality preventing people from putting music they own on their own phones. While selling to fourteen year old kids with no way to buy from iTunes may work for a while, it's only a matter of time before someone - whether a cell phone company themselves or Vonage or Skype - comes out with a Wifi mobile phone service. This will be outside the 'walled garden', and the begin of the end for the premiums being collected by the cell phone companies.
And good riddance. These are the companies that have the worst customer service records around and spend the most lobbying to keep their customers prisoner, recognizing that they will bolt at the first opportunity. Let's hope the revolution comes sooner rather than later.
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