The Power of Small and Simple

by Ken Mueller on February 13, 2013 · 9 comments

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There was a time when the ringtone industry made over a billion dollars a year. To this day, downloading ringtones rakes in over $500 million dollars each year. And that was at just 99-cents at a time.

iTunes, Google Play, and other downloading services also make a lot of money each year as people download songs, movies, TV shows, and apps, just one at a time. 99-cents here, $1.99 there.

This is a business model we all need to think about and see if it might work for us. Think about it: massive amounts of purchases being done one at a time. Low cost. Easy. Simple. People purchasing what they want in small doses. And it adds up.

There’s something about the psychological effect of spending our money in tiny increments that encourages us to spend more. If I asked you to spend $10 on coffee, you might scoff at me, but at $2 a day for five days, it seems to soften the blow.

Right now we’re in the process of moving, and I’ve already begun the stressful task of dealing with Comcast about moving (and decreasing) our service in the new home. I want to leave my current home, go to the new home, and be ready to go, particularly with Internet service. Seems simple, right? Turns out it isn’t so simple. And the great deals you see online are only available online. If I call on the phone, I get other deals that aren’t so great. And it’s not very clear what channels are available on which package.

When you download music from iTunes, you have the option of picking and choosing what you want. You can download an entire album, just a few songs, or just one song. Choose what you want. Why can’t we do that with cable and satellite television? I could list about 20 channels I might want, and hundreds I don’t want. Let me pick and choose and pay accordingly. I don’t have small children, so I don’t need any of the gazillion kids’ channels that they seem to think makes their service so attractive.

When you call Comcast, Dish, or DirecTV, it’s next to impossible to compare them because you’re not really sure what they are offering. The first service to figure out how to offer true a la carte service will be the winner.

Small. Simple. Customized.

This is why people love Netflix and Hulu Plus. One price, simple and sweet.

Don’t make me buy things I don’t want. Give me options, let me choose, keep it simple.

This won’t work for every business, but perhaps there are ways you can use this as you move forward. In what ways can you make it easier on your customers? How can you give them what they want in the simplest possible way? Perhaps bigger and better isn’t the answer. Perhaps you can be more successful offering smaller, simpler options.

Sometimes keeping things simple can turn your product into the best product. I’d certainly love to have back all the time I’ve spent on the phone and online trying to figure out my best Internet and TV options.

What are you doing to simplify your business and products? How are you trying to tap into this type of business model?

 

 

 

 

 The Power of Small and Simple
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8 comments
dbvickery
dbvickery

I feel hostage to Comcast for the sports I like watching. Otherwise, just bump up my Internet speed, and Netflix will work just fine! If I want a more recent movie, then I download from the playstation network.

I think Comcast/Dish/etc. couldn't afford to let you customize your channel packages, but I wish they would. I'd get all the local channels that carry my sports, and then throw in ESPN/ESPN2 and TNT (for basketball).

HeatherTweedy
HeatherTweedy

As someone who reps many in the telecommunications industry, I can tell you that they would love to sell you only the channels that you want.  Seriously, they want to be able to create customized packages because they pay per channel and hate paying for you not to watch the Style Network.  They make you by bundles because it's makes it nearly impossible to leave.  Your Cable company plays the long game.  :)

There are some really cool changes coming in the next decade that should increase your a la carte.  I dream of a day when shows are purchased individually as season passes that are delivered right over the web.  Have you seen that Netflix created an original show?  It stars KEVIN SPACEY and it will be interesting to see how that goes.  

Finally, I completely agree with your central point.  If something is below $8.99, I don't even think twice about buying it.  So, I love this idea, but my bank account is fuming right now! 

KenMueller
KenMueller moderator

@HeatherTweedy I have seen the Netflix thing, and it will be interesting. Also the original episodes of Arrested Development. It's interesting, when you look at some of the hottest shows out there now, they are ones on channels that never created their own original content. Channels like AMC only ran other programming, but now look at shows like The Walking Dead and Breaking Bad, they have some of the hottest properties on television. I think the next five years will be huge and Cable and Satellite companies are going to have  to make some major business model changes. The old way of doing things just doesn't work. I know that Comcast does offer customers the ability to stream programs online OnDemand, but that's still not enough. 

They might want to keep me, but that's why I say the one that first breaks this model will be the winner, because they are all doing it. I swear the people at Comcast and the various satellite providers take lessons in making things as unclear as possible. Nothing is what it seems. Plain English, please!

And to your point about inexpensive things, the other thing that makes it easier is when you do a download of something for .99 or 1.99 that you don't pay for up front, but just gets tacked on to your phone bill. Or how Pay Per View gets added to your cable bill. It makes it feel like we're not really paying. It's just too darn easy. The whole idea of mobile payments is going to make this kind of practice mainstream.

barrettrossie
barrettrossie

@KenMueller @HeatherTweedy I despise Comcast and all those near- monopoly cable/Internet providers with a hate that knows no bounds. They could at least be honest, but why go through all that trouble, when lying is apparently legal and socially acceptable.

Lucifer awaits them at home.

LizJostes
LizJostes

@KenMueller I totally agree with you, Ken. Cable companies need to get competitive FAST! Not only are networks like AMC offering fantastic, popular shows, but so many shows you can watch a day later online! Even those that you may need to pay for...to purchase full seasons of exactly the cable shows you want is - like - only 2 months worth of cable costs! @HeatherTweedy 

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