Industry

Almost up to speed

The ISP industry, in general, does not know what its customers are buying.

c|net interviewed UnitedOnline's Mark Goldston. UnitedOnline has shown a bit of a profit, on an EBITDA basis — in other words, before the bills are paid.

If you're going to a pay model, you better have something that's compelling...If you're going to be a me-too product, who needs you?

Damn straight. And his analysis of the competition is just as good.

We will become more prominent in terms of stealing market share. This market will polarize. The guy at the top will have to find an incredible set of features to justify why subscribers should buy them rather than broadband or a $9.95 service.

However,

I've never been a huge proponent of broadband; it's too expensive. There's not sufficient content on broadband. Other than high income and early adopters, I don't think people care about "always on." Your tap water's always on, but you don't run it all day. To the degree people want broadband, we'll have a competitive offering.

He's right about it being too expensive, but let's think about this for a minute. What drove mass adoption of online services? All you can eat for just $19.95!

Unlimited use, flat-rate pricing plans by AOL, regional ISPs, and local exchange carriers allowed the semblance of a persistent connection. One no longer cared whether or not the line dropped, or how long a download took to complete, because there was always more. Per-minute costs were no longer a consideration, and many people subsequently left their computers online all day.

An ISP's customers are buying access. Everything else is frosting on the cake.

12:30:46 PM # Google It!
categories: Industry