Oct 01 2007
Walled Garden Mentality
I am at a loss to understand the walled garden mentality. Maybe you can help me out?
Optus and MySpace sitting in a tree…
Optus has sewn up a deal with MySpace whereby they paid MySpace for the privilege of exclusivity.
Let’s have a little look at the current state of play:
I have a phone that is “internet enabled”. Is it too much to ask for that I have full access to a range of mobile internet sites? Assuming for a second I wanted to access the mobile MySpace website, unless I’m with Optus (who want to charge me a pretty hefty sum for the privilege) I can’t.
At TechCrunch Duncan Riley points out:
I can’t help but ask the question: is MySpace Insane? Are they trying to milk every last cent out of the site before they are defeated by the ever popular Facebook, which I’d note have just passed MySpace by traffic in the United Kingdom. A sane strategy would be to provide easy access to as many people as possible, strengthening and growing your user base in an increasingly mobile world. Revenue would flow as a conseqeunce [sic] of having more users, instead of banning potentially the majority of them.
Telstra and Australian Idol
If I wanted a special mobile Australian Idol access, I’d have to be with Telstra. This would set me back $2 per week plus bandwidth browsing charges to get to the Idol mobile website. I don’t know whether money exchanged hands in this scenario.
Three and TrueLocal
If I want to access TrueLocal’s mobile search, I’d have to cough up $1 per month and be a 3 customer. (n.b. this service is currently free until the end of February 2008 – which has been changed since it launched. The paid service was due to commence today). Again, I don’t know if money was exchanged for this deal.
It annoys me that these mobile service providers are buddying up with content providers to lock them into their “walled gardens”.
What exactly is a walled garden?
Let’s look at the Wikipedia definition
A walled garden, with regards to media content, refers to a closed set or exclusive set of information services provided for users (a method of creating a monopoly or securing an information system). This is in contrast to providing consumers access to the open Internet for content and e-commerce. The term is often used to describe offerings from interactive television providers or mobile phone operators which provide custom content, and not simply common carrier functions.
So you see it’s all about creating monopolies. And if you want to be included in the walled garden (as a content provider), unless you’re a big player, you’d better be prepared to cough up big time.
It’s not enough that you are providing a value added service for the mobile service provider’s customers. You’re actually expected to pay for the privilege of being included within their hallowed walls. In this instance, we’re talking a five figure commitment fee (to start) AND a cost per click model on top (circa 20 cents per click).
I truly hope the day never comes when mobile service providers attempt to restrict access to freely available sites. I understand that for whatever reason some content providers chose not to allow access to carriers other than those they have formed deals with. But should a mobile phone service provider deny access to a freely available website, surely that would be a contravention of Part IV of the Trade Practices Act (1974)?
In the meantime if you’re looking for a free (n.b. you just pay for your bandwidth) mobile search directory consider dLook.
(Disclosure: I am a founder of dLook)
13 Responses to “Walled Garden Mentality”
More the question is Optus insane. MySpace went out with 2006 didn’t it? I’m just thankful I don’t wish to access MySpace or Idol (which I don’t look at anyway!) through my mobile. I’m sure sooner or later I’ll be forced to pay to access some sort of online content via my mobi though.
Unfortunately for mobile providers, the hay days of big profit margins are well over. Caps and market saturation in Australia means that they are now having to turn to content to subsidise their profits. As always, this means the end-users are the ones who have to pay.
Scary thing is, this could very easily expand in the internet space, with big-name sites signing up to exclusive access deals with specific ISP’s. Think of the possiblities with 3 and Big Brother, Telsra with Australian Idol and Optus with MSN – just don’t think too loudy, they may hear you!
FT
Hi Meg,
this walled garden BS is one of the reasons I went for a larger-screen phone – the Nokia e61 – and Opera Mini. I can basically look at any free content that I want when I want it (as long as I’m prepared to pay network access fees that is!).
The last dying gasp of Media 1.0 is subscription fee content. To me it means that they just aren’t trying hard enough.
Cheers, Andrew
Hi Meg,
Just for what it’s worth – the ‘exclusive idol video’ stuff that Telstra provides on it’s “Next G” / 3G platform don’t have any data charges associated with them. It’s just a flat fee. Same as the Foxtel by mobile service.
Telstra’s also a sponsor of the Australian Idol series, so it’s not too suprising it’s exclusive there.
Andrew,
Susbscription content I can, actually understand and I do pay for – no, not the Idol / Foxtel stuff that we have pressured to buy, but other things – such as smaller neiche services and content.
John, FT & Andrew – many thanks for your comments
Will – thanks for pointing that out. I’ve amended the post to show the charges are only for navigating to the site – I misunderstood.
I don’t have an issue with content providers monetising their sites, per se. But restricting access depending on one’s carrier is what confuses / annoys me. Why do they have to strike exclusivity deals?
Consider Ralph.mobi. Anyone can access it, but they provide the added option of data packs available from Telstra, Optus, Vodafone, 3 and Virgin.
“Your mobile carrier may charge you for using the mobile internet. If you grow addicted to RALPH mobile (we’re already hooked) sign up to a mobile data pack (some mobile carriers call this a web pack, data plan or data service). That way you can happily ogle at girls all day, everyday without worrying about your wallet. Contact your mobile carrier for more details.”
Doesn’t that make more sense?
Meg –
It might make sense, but cross-provider billing for things gets tricky. Works okay for voice calls because it’s all a centralised system – but mobile *internet* is different.
I havn’t visited Ralph.mobi, but I imagine you subscribe to Ralph (or the site specifically) to get access to it?
The data packs are just the generic term for “I want MB of usage for a flat rate” for your mobile. None of the money from a data pack goes to the site owner.
Also, if your provider isn’t giving free data to stream down video from a certain site – you’re going to be paying a lot of money on top of any subscription fee. Most providers charge 1.5c/KB for casual data access – streaming at even 20KB/sec = $0.30/second. You’re talking $9 for data alone, for a 30 second clip.
Yes, things need to change, and they will, albeit slowly. Some providers are already offering some very attractive data plans. For example, 2GB for $40 on Three’s X-Series plan.
Hey Will
I haven’t visited either! They state the site is entirely free, and yes the data packs would be for generic access, which wouldn’t benefit the site owner.
Thanks, but none of that stuff is of any interest to me, even if I had a phone that could access it and it was free. Life is too short.
Hi Colin – accessing those sites via mobile isn’t of particular interest to me either. Considering I’m chained to my desk most of the time… it’s mostly a moot point 😉
It’s the trend that’s concerning – and the adoption of mobile web will only increase over time.
Thanks, as always, for your comment.
It wouldn’t be a violation of the TPA, because it’s not as if there was already a mobile MySpace, and to access it on Optus they charged you extra (Ã la Net Neutrality in the US)
It’s like when you go to Woolworths and they have special deals/sizes/etc only available at Woolworths. It’s to get you into their service, providing a value added service that differentiates Provider A from Provider B
Hey Bryce
The point I was trying to make is – just say Optus (for EXAMPLE) started restricting the access of Optus users to the free mobile Facebook site (which can be accessed on any network). Then that would be a restriction of trade (perhaps not applicable because it’s not an Australian business, but you get my drift).
I’ve only just caught up with this thread… and some things I’d have said have been covered. However, stepping back, the way to analyse these deals is to put yourself in the shoes of the parties to the deal. Look at their needs, and then it all makes sense.
As an example, Telstra and Australian Idol… a simplification because I don’t know the deal between Southern Star Endemol (the company which makes the TV program) and Channel 10. But it’s probably safe to assume that SSE just makes the program(s) for a certain fee, and it’s up to Channel 10 to figure out how to pay for it.
Channel 10 first. They want eyeballs on TV sets, because their product is an audience they can sell to advertisers. They need to convince the viewers to come back again and again — engagement not just when they’re broadcasting but at other times too. Make the program a part of their lifestyle. Telstra is an advertiser which can afford big dollars, but it’d be nice if Telstra could offer more than just dollars.
If Telstra can provide access to Idol material 24/7, that’s helping build engagement with their audience.
Telstra in turn want to raise their market share. They can advertise, sure, but being the only ones to have the exclusive Idol material gives them just one more to brag about. “We’re the only network with Idol and it’ll cost you nothing.” If you’re a 15yo girl who’s got the hots for an Idol contestant, that just might be enough to tip the deal.
Other facts to remember:
1. Publicly-listed companies are all about short-term gain. This is about this quarter’s revenue targets and this hour’s share price.
2. The senior management team on both sides is, by and large, a bunch of middle-ages white men who don’t watch the program and don’t use the technology. It’s purely about market shares in certain demographics, based on a spreadsheet.
3. Men are competitive, and corporate males moreso. They want to own the content because they think that by doing so they control it and they WIN.
Meg, you’re right if you think this is all thinking which is archaic and won’t last. That doesn’t matter. This is what works for these specific people in this specific quarter now. They’ll worry about what happens next year, next year.
There are an increasing number of brands & media companies in Australia building off-deck (open access) mobile sites and I predict that this will become the norm, sooner rather than later. I’ve built a directory of mobile sites that are available to all Australians here, and this number is growing every day:
http://msites.wirenode.mobi (feedback on new sites more than welcome)
Mobile search engines:
– Telstra/Sensis has a mobile search engine which is included on the BigPond portal but also available to all customers. They offer special functions for Telstra customers only ie. auto-positioning to find things nearby because those things required integration with carrier technology. (This is one example of a way to do ‘exclusivity’ deals without restricting access.)
– Also worth noting is Google’s mobile search engine, which is available on the Three & Optus portals as part of deals with those carriers, but sensibly, still remains accessible to the customers of all carriers in Australia.
– As far as I’m aware DLook is completely carrier agnostic, thus open for all. (I hope the day never comes when carriers block access to open sites such as this)
In my opinion it is a mistake for any brand to do an exclusive deal with a carrier as it limits your audience significantly. With so few mobile browse customers out there today, restricting access is simply foolish.
I don’t know the stats, but I personally would not switch carriers for access to ‘exclusive’ mobile content – it’s just not that important to me. Will the time come when this happens? I don’t know, but I’m putting my money on the brands that provide full & open access to all customers.