Is Everything Becoming A Service?
from the products-into-services... dept
For a long time now I've been a big believer that there are no digital goods. If you want to sell a digital good, you actually need to sell a service (basically, the ability to provide the good in the future), or you're going to get forced to give it away for free. It's not hard to work into the basic economics of how that works. However, Paul Saffo is taking that idea and going even further with it, suggesting that all phsyical goods will be sold as services as well. He points out that it's already starting to happen with mobile phones: without a service contract they're just paperweights. However, he can't believe service providers haven't figured out that they should be giving out the phones for free to encourage more service usage. He says other physical goods will follow the same pattern. He even predicts that you may get your car for free, but you'll have to pay for the service to make it run - such as alerting you that it's time for an oil change, and telling you that the nearest garage is ready and waiting for you.
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Service theory of value
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of course..
Think you own your hardware? Maybe legally you do today...but there's a strong push to make sure that you don't tomorrow.
The cellphone is the best example but there are others:
- Physically hacking the XBox,PS2,Nintendo so you can play imported games (yes, and copied games)
- DVD players that won't let you watch DVDs from another region
- Printer companies that sue so you can only buy ink from them
- Car companies that copyright their computer signals so only their dealers can diagnose the car.
- the "formerly know as Palladium" initiative..
Its all a money grab...there's NO other explanation for it. Greed.
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Money Hungry
What's so hard to believe about them wanting to make money any and every way they can until the consumer backlash forces them into giving them away?
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No Subject Given
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pricing
Some computer companies were doing that back in the 1960s. They would sell a computer whose CPU could run at either of two speeds, depending on how much you were willing to pay. So this isn't a new idea at all.
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cost shifting and competition
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Re: pricing
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Re: Money Hungry
Sorry, didn't explain this clearly. The idea is that by giving away the hardware the number of people you sign up for the service is MUCH, MUCH higher, leading to MUCH, MUCH more money in terms of service revenue.
Adding a hardware price hurdle actually HURTS their ability to make money.
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Re: pricing
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Free Cars? Not today.
The article also mentions American Airlines' SABRE system. Remember Braniff airlines? They were at one time AA's biggest competitor. But then AA began to manipulate SABRE to put Braniff at disadvantage, according to Braniff and travel agents. Braniff eventually went out of business. Yet the story only characterizes SABRE as technology that “always created more new players” without mentioning this other aspect.
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