Zero-rated data - is it good news for radio?
'Go Binge', while good for customers short-term, is bad for the web long-term
In the UK, the curiously-named “Three” mobile phone network has just announced something called Go Binge. It’s a new service that lets you watch Netflix, listen to music service Deezer (and SoundCloud) but these services won’t come out of your monthly data allowance.
In Australia, Optus offers zero-rated access to rather more - music services like Spotify, Google Play Music and iHeart Radio, and TV like Netflix, ABC iView and Stan.
And in the US, T-Mobile offers even more - unlimited streaming for YouTube and Netflix, Spotify and iHeart Radio, Pandora and many more services.
You might think this is good news for our industry. If the cost of data is one of the things that puts people off using streaming media, then this surely helps take-up: particularly if services like iHeart Radio are included. It’s good news, right?
Here’s why you might want to think twice about this.
Competition is a good thing. It normally leads to better things and lower prices for everyone. Where there’s no competition, products don’t improve and prices go up. Just look at a typical American cable internet connection.
Consumers need competition, in other words. This explains the decision a few weeks ago by the European Union to fine Google an astonishing $2.4bn for fixing its search results in favour of its own shopping comparison engine. As commentator Benedict Evans wrote in his weekly newsletter:
“US competition law has become exclusively focused on price: lower prices for consumer are good regardless of how they're achieved and nothing else matters. But EU law also looks at the broader market: it takes the view that squeezing competitors is bad for consumers even if lower prices result (since innovation and choice also suffers).”
The world-wide-web has operated on a level playing field ever since it was invented - by a Brit, by the way. Amazon launched in a garage, with family members and friends stuffing packages for the mail man; yet access to Amazon’s website worked in exactly the same way as access to anyone else’s.
Zero-rating means that the next Amazon, Pandora or Netflix won’t get the same access. In effect, it’ll cost consumers more to access small, innovative start-ups - since they’ll inevitably be the ones that aren’t zero-rated.
The success or failure of a new web service might be driven by a cellphone company’s decision on whether to zero-rate it.
In radio, of course, we’re used to anti-competitive practices: from our regulators. Ofcom, ACMA, the CRTC or the FCC keep available broadcast licences scarce, and in many countries they regulate content, format, and competition. These rules can sometimes be helpful to radio companies, but most are continually arguing for more relaxed regulation - because it makes running successful businesses easier.
Before we celebrate these zero-rated mobile tariffs, we should probably reflect that this makes online radio subject to controls dictated by commercial terms, not government legislation.