Verizon continues to keep walls between subscribers and multimedia
NPD: Verizon customers less likely to use their phones as multimedia devices
January 7 2009 - 5:59 am ET | Colin Gibbs | RCR Wireless News
Only 45% of U.S. mobile consumers use their phones for anything more than making calls, according to figures released this week from NPD Group. But nearly lost in the press release is this little tidbit: Verizon Wireless’ customers are less likely than those of any other tier-one operator to use their phones as multimedia devices.
That’s despite the fact that Verizon’s data ARPU is an impressive $13.45 — second only to Sprint Nextel’s $13.50, and far better than AT&T Mobility ($12.30) and T-Mobile USA ($8.90). (The overwhelming bulk of such revenues comes from the texting craze.)
So what gives? Why is the nation’s soon-to-be largest player (pending Friday’s close of the Alltel acquisition) trailing when it comes to mobile multimedia?
There are lots of possible factors, obviously, but Verizon’s short-sighted, walled-garden strategy is at least partly to blame. It’s likely that many subscribers have simply grown accustomed to Verizon’s short leash and given up on accessing many of the things today’s phones can do. Consider:
--Unlike other carriers, Verizon has kept a tight grip on location information, essentially blocking the navigation capabilities of offerings such as Google Maps for Mobile. (The carrier recently said it is relaxing its policies regarding GPS information for three — only three! — handsets later this year.) Verizon Navigator — its branded navigation offering — performs well enough, but any move to disable the functionality of popular third-party navigation apps is a loser.
--Verizon maintains an uncompromising embrace of digital rights management technology for full-track music downloads. After failing to gain traction with its highly-promoted a la carte service, it teamed with RealNetworks to launch a mobile version of Rhapsody, a subscription-based, full-track service. But both offerings use Microsoft’s DRM wrapper, preventing users from transferring their Vcast Music tunes among devices.
--Finally, Verizon seems to eschew many usable third-party applications. The browser on my new LG Voyager (yes, I’m a Verizon subscriber) delivers a horribly rendered screen for my business e-mail, preventing me from reading — much less responding to — my messages. Meanwhile, Verizon has not made Opera Mini available to its subscribers, even though Opera launched a BREW version of the popular software more than a year ago. Opera Mini is available on every other tier-one operator. (I’ve settled on using Skweezer to read my work e-mail on my phone, by the way. Feel free to shoot a note my way with any other suggestions. Seriously.)
Ironically, NPD’s study came a day after an announcement from Verizon Wireless touting the “progress” of its open initiative, which is more than a year old. The press release cited 13 highlights including a handful of new products such as a tracking anklet for criminals, a communications node for utility meters and a cellular broadband router.
No phones. No multimedia applications. And no hope yet for Verizon consumers looking for more openness from their provider.
Ross Rubin, NPD’s director of industry analysis, said Verizon’s opposition to outsiders is a “secondary” factor in its subscribers’ disdain for multimedia. Instead, he cited the carrier’s broad customer base and older demographic.
“Verizon has been very successful with family plans,” Rubin noted, “and we tend to see that demographically it’s a younger, single consumer who tends to be much more aggressive” in consuming mobile entertainment.
That may be true. But Verizon’s attempts to become a mobile media company have fallen short as the carrier has yet to gain traction with on-deck content such as Vcast Music and its MediaFLO-powered mobile TV service.
It’s no surprise, then, that some of its subscribers have given up on multimedia entirely. Unless Verizon truly starts making progress with its open initiative, it may find many of its other customers moving on to less restrictive carriers.
January 13, 2009 06:01 am
VzW's walled garden approach shows a "small pie" mentality - instead of increasing the size of the pie, they have chosen to hang on to their small pie (walled garden). I would have switched to an iPhone, except for better voice network on VzW as well as all the family is on VzW. I have tried several times to find out whether my Omnia's GPS will be unlocked, or if the next fast one they pull is to only unlock new Omnias. However, the reps I spoke with did not even know the GPS was locked. Why they locked it in the first place just blows my mind...
January 13, 2009 06:01 am
Everyone is complaining about them being "closed" but they are opening up. I have the Samsung Omnia and love it. It has WI-FI and I've used it a few times but don't feel the need. It has both Opera and IE. Yeah the Widgets could use some work but I've never been more happy with a windows device and I hate windows. It has an FM reciever for those great ILLINI games. And VZW has already promised to open up the GPS on the Omnia, Saga, and Touch Pro (http://www.wmexperts.com/articles/verizon_relents_gps_to_open_up.html). It is definitely coming but why spend the money to have software made for old phones when they can just have new phones do it. The embrace of openness is here but people are too busy complaining to see it. BTW if VZW is dead why are they still growing faster than most other companies?.. not including the purchase of ALLTEL. If you are going to complain then know your subject matter.
January 13, 2009 06:01 am
My Saga has Opera on it, but otherwise, this article is correct. Verizon needs to embrace openness. How many times do companies have to see closed solutions die to understand that it may work for a new service launch, but it needs to go open with wider acceptance?I suspect the answer to SnoopDarr comment about dead ends (a real possibility) is that Verizon will become more open with worldphones and handset portability, and grdugingly go to more open solutions in general, trickling down from their upper end handsets into the lower end devices.
January 8, 2009 05:59 am
My contract is getting ready to switch to Vzw via Alltel. I'd love to stay with the best network but their policies regarding Wifi are lame. I'm actually considering AT&T for the iPhone even though their network isn't as good. Wifi would be great to have when I travel. There's a certain level of arrogance with Vzw's position that's hard to swallow.
January 7, 2009 05:47 pm
Correct me if I'm wrong, but isn't Opera available on the Samsung Saga, Omnia, and HTC Touch Pro recently released by VZW?
January 7, 2009 05:59 am
The truth is VZW has an old-school ideal of where data is headed towards. Surprisingly most people don't have an issue with data phones requiring a $29.99 feature for email/internet on the new PDA phones (iPhone/PDAs on VZW). The problem that VZW has is that KNOWING people are already paying that extra cost for 3G, they STILL restrict WiFi and GPS and 3rd Party apps on their network!!!Old people don't need new technology, okay fine. If you have a PDA, buck up and pay $30 for all the cool stuff. VZW - meet us halfway and let the FULL USE of these exciting devices be made. Then you'll see an end of the same old complaints and more people switching to the best network once again.My 2 cents.
January 7, 2009 05:59 am
All good points. There are many apps that would be great to have out there but there is no way to get them. I subscribe to Vzw along with my whole family (parents, in-laws, children) so that we can all call each other. The coverage is great too. But the extra junk that Verizon provides other than email sync is worthless and too constraining (Vcast ??? really???). I carry a Vzw phone so that when I work with Vzw they know I support the company (a major customer). But at some point we (the family) will need to switch. Some of my work associates now carry the iPhone as well as a Vzw phone. They just have to hide the iPhone when around Vzw people. The article is right on ... I would do more if the system were more open ...
January 7, 2009 05:59 am
Verizon is a dead-end company, with dead-end closed network policies, and dead-end cellular technology. How long until they start losing subscribers?
January 7, 2009 05:59 am
Colin. Excellent reporting and analysis.
January 7, 2009 05:59 am
I could care less of the junk telcomes put on cell phones - I don't need the harrassment that come with such junk anyway. There's only 1 purpose for a phone - it's a phone period. I like it this way.