Peter Cochrane's Blog: Customer needs...

Customer needs - who cares?
22.04.05, 12.14 GMT, London

This week the RIAA announced another step in its war against MP3 music downloaders by the successful prosecution of even more people and its pursuance of copyright justice. The numbers prosecuted now measure in the hundreds, which probably leaves a mere 500 million or so to go!

If only the old music industry had watched the market, listened to the customers and adapted their business model, perhaps this endless and futile debacle could have been avoided. But it seems that companies wed to a business model are all too often unable to change and eventually die. It's certainly true of the canal industry with the arrival of the steam train and the internal combustion engine promoting the demise of the railways.

Today many industries are under threat, including fixed line and mobile network operators. Customers are calling the shots and freedom is the war cry! Connectivity has become a commodity. Wi-Fi and other technologies (WiMax) are quickly moving in to disrupt the market.

Irony 1: As I was writing this blog, a news item appeared on my screen detailing the CEO of a US mobile operator sounding off about the ridiculous idea that people will use their mobile phone, in their home, with VoIP on their own Wi-Fi link. Doh! Yep, it seems about as absurd as coal wanting to travel at 60mph instead of 3mph when it transited from barge to steam train. I think the customers have got news for this CEO – they're just going to do it.

Over the past eight weeks I've travelled back and forth to the US three times and at no time have I used my mobile phone for data connection. I only rarely used it for speech when I was travelling in my car. Wi-Fi connectivity has been free, and VoIP to the UK and across the US has been perfect.

Irony 2: This column is being typed in a London hotel where the cost of high-speed connection is £15 per night, but in the lobby there are three Wi-Fi suppliers providing free access.

If only mobile operators realised that there is a golden opportunity for them to change their business model and to increase their chances of survival. It's easy to understand how an industry with a history of over 100 years, like the canals, railways and indeed the fixed line telephone companies, might become so entrenched that they just don’t get IT. But hey, the mobile companies have only been around 20 years and you'd think that lack of maturity would see them more free-thinking and able to change. But it appears not.

So who’s going to be the next victim? It seems to me that Hollywood is limbering up to do an encore. They resisted VHS and DVD – and they are now devoting energy to stop movie downloading. I think the last monumental error of this scale involved King Canute.

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