Verizon Music Store: Still Swimming in Chocolate
A good commentary here of Verizon's latest decision to remove the exorbitant $15 per month subscription charge for its download music service and launch the service on a sexy new phone - The Chocolate.
Shock! Horror! Customers were not prepared to pay a hefty subscription PLUS airtime charges PLUS find that they could not play MP3's on their phones (the Verizon software disabled this).
The current move looks a step in the right direction, but it still costs $2 to download a song over the air to your phone and only $1 to do it via your PC (from which you can synch to your phone for free). Verizon are looking to follow Vodafone's carpe diem approach (embodied in the Now campaign) and get users to pay a premium for an 'impulse' mobile download.
Essentially, Verizon is still committing Telco 2.0 heresy by asset hoarding and retaining the culture of scarcity. "It's more difficult to get music on the move so we'll charge you more for it."
Wrong approach. Make it easier for customers to get music on the move and grow the overall revenue pie (taking a good slice of it along the way) by dropping the price and building in functionality that makes selecting music simple (recommendations etc.). Telco's remain obsessed with per unit/transaction/minute margins. This can be dangerous since it keeps prices high and limits market growth. What about dropping consumer prices for content and seeking market growth PLUS alternative sources of revenue, such as advertising?