Comments on: The problems with app-based billing for data http://research.gigaom.com/2012/02/the-problems-with-app-based-billing-for-data/ Thu, 05 Mar 2015 18:27:33 +0000 hourly 1 http://wordpress.org/?v=4.1 By: Colin Gibbs http://research.gigaom.com/2012/02/the-problems-with-app-based-billing-for-data/#comment-1549 Wed, 11 Apr 2012 03:42:47 +0000 http://pro.gigaom.com/?p=99613#comment-1549 Thanks for the comments, DS21.

I see your point that demand (based on use cases) could certainly impact consumers’ willingness to pay for access, but I think there are too many variables to actually build a billing model accordingly. For instance, I may not be willing to pay much to keep my kid occupied with Netflix on a Saturday morning, but perhaps I’d pony up in a big way for the same app but for a different use — when I’m in my hotel room with rotten (and expensive) Wi-Fi, for instance.

My point is that many (or maybe most) of us have varying demand for our apps based on fluid situations and use cases. So convincing us to pay monthly fees for preferred access through certain apps seems like a pretty tough sell.

That said, I can see where situational-based pricing for access might be a part of a larger solution. But I think that scenario differs from straight app-based pricing.

]]> By: donsmith21 http://research.gigaom.com/2012/02/the-problems-with-app-based-billing-for-data/#comment-1544 Tue, 10 Apr 2012 01:19:56 +0000 http://pro.gigaom.com/?p=99613#comment-1544 It’s tricky, but there is some validity to the argument. Most consumers believe that all data is created equal and we should be able to use it as we wish. Carriers would like to differentiate themselves and optimize their networks. Sure, putting up more towers and having “fatter mobile pipes” solves the problem, but that can’t happen overnight and even if it could it’s not always cost effective. Somehow there needs to be a compromise. Let’s say two people are using the same device on the same network and their apps are asking for similar bandwidths. Consumer A needs to log into Skype for an important video conference call. Customer B has handed his kid his device to watch Netflix. Undoubtedly Customer A would be willing to pay a bit more for preference on the network. If the network provider allocates the same bandwidth for both, Customer A will be upset. If Customer A is given preference, chances are that Customer B won’t care. Or, just maybe Customer B does not mind paying more so Sponge Bob is clearer for his kid.

But how is the carrier to know? Most consumers will likely be overwhelmed if we are presented with list of apps and are asked to allocate their bandwidth preference based on network congestion, time of day, usage etc. Tiered pricing needs to happen. One of the angles that might work is to have the app provider pay for the bandwidth preference. Netflix (Free App) or Netflix Plus (Pay $5 a month) so you get network preference.

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