[2459] in Commercialization & Privatization of the Internet
Re: Billing philosophy, World, and user studies
daemon@ATHENA.MIT.EDU (Ken Laws)
Sat Feb 29 19:56:35 1992
Date: Sat 29 Feb 92 16:49:41-PST
From: Ken Laws <LAWS@ai.sri.com>
To: com-priv@psi.com
In-Reply-To: <9202290956.AA01070@psi.com>
Genevieve Engel asks if people use flat-rate services differently.
Absolutely.
I'm a user. I use flat-rate services. In part this is just luck,
since flat-rate services are available to me that will do what I
need done. In part it is deliberate, since metered services are
also available that would do what I need done. Also, since "what
I need done" has been shaped by what I can do cheaply -- just as
people load their plates differently in an all-you-can-eat service.
I have read various articles aimed at new CompuServe users or
those getting started on BBSs or on information services like
Dialog. One of the biggest hurdles is learning to download
information quickly for off-line perusal. Services often give
a fixed number of free hours to help new users explore and get
past this difficulty. Communications software is also touted
on the basis of its convenient macro capability or its great
user interface that will help you get what you need quickly.
Even so, users are terrified of getting started on metered
services. Perhaps rightly so -- there are horror stories about
people running up enormous bills. There's also a saying that
it's cheaper to hire an information broker at $40/hour plus
costs than to try to do the same search on your own -- indicating
the magnitude of the spin-up effort and cost. A result is that
information services are having a tough time getting customers,
which keeps costs high and exacerbates the problem.
Compare this to a public library, where a one-time fee is taken
from our taxes each year. People still have to overcome an
initial fear, but a much greater number do so. Once in, they
tend to spend hours and hours browsing or researching. Early
browsing leads to later research use, and eventually to use of
bookstores and information brokers for more targeted services.
A problem with flat rates, though, is the potential for abuse.
Libraries have to worry about keeping out the homeless, and
about recovering books from people who would keep them forever.
Likewise, I know of people who would abuse a ten-cents-per-call
phone line by staying connected during dinner -- or even all
day -- rather than disconnecting when immediate business is
finished.
I'm not sure whether flat-rate services can survive in the
marketplace. I haven't heard of pre-paid legal plans being
successful, but flat-rate insurance of other types tends to
be very successful. I think that both payment plans need
to be offered, and individuals will choose. Novices will
tend to favor flat rates; wizards will tend to favor pay for
use. As more people become wizards, the balance will shift.
We're seeing it now in the TV industry, where people who
are becoming more selective in what they watch are willing
to pay cable charges, pay per view, or cassette rentals.
-- Ken Laws
P.S. Maybe what we need is flat rate paid for by commercials,
as on Prodigy. Not my favorite service, but there's a lot
to be said for enduring a brief commercial in order to get
free or cheap service. As a small businessman, I know I'd
be happy to pay to reach the right set of customers. Not
every service should be supported this way, but let's keep
it as a possibility.
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