Marketing vs End Users

In the UK fixed-line broadband access market, there is currently a huge controversy among ISPs about a recent innovation called BBC iPlayer, which has ignited a Net Neutrality-type discussion here. iPlayer is the BBC's platform for either streaming, or enabling legal P2P, for its own content - typically enabling "catch up" of the best of the past 7 days' broadcast programmes.

iPlayer has been wildly successful since its launch, and has driven a huge amount of extra traffic onto ISPs' networks. Given the system whereby UK residents have already paid TV licences, we're entitled to BBC content "for free" - undoubtedly a contributory factor in its success, and why it's such a pain point and 'accessible target' for broadband operators' complaints. The BBC's head of technology has been pretty scathing about the complaints though - and has now quit the Beeb to join a firm doing the same thing on a multi-broadcaster basis (details are sketchy but sounds like a UK version of Joost to me).

He even threatened to "name & shame" ISPs that attempted to block, degrade or packet-shape iPlayer - "Content providers, if they find their content being specifically squeezed, shaped, or capped, could start to indicate on their sites which ISPs their content worked best on (and which to avoid). I hope it doesn’t come to this, as I think we (the BBC and the ISPs) are currently working better together than ever."

(Frankly, I think that threats like this expose the risk & absurdity of non-neutrality. Rather than controlling the content over "their pipes", operators are actually going to risk being held hostage by the Internet players - maybe a 2-second latency imposed on Google searches for unfriendly ISPs, or Facebook exhorting customers to switch broadband providers when it detects a particular IP address).

As elsewhere, the whining from UK ISPs derives from the fact that many of them mis-sell their services with eyeball-catching marketing terms like "unlimited". And then complain when customers actually use what they've been sold.

I might have some sympathy had iPlayer come as a bolt from the blue. But it didn't - the fact is that a sudden ramp-up of demand for rich legal video content (probably driven by P2P) has been entirely predictable for at least the last 3 years. And if ISPs were too short-sighted to notice it back then, YouTube's success ought to have been a wake-up call over the past 18 months about what was clearly likely to happen. Frankly, anyone in the ISP business that has been taken by surprise by a sudden growth in traffic obviously isn't very good at business planning. It's not like the BBC has been quiet about its ambitions either - and in any case, it could equally well have been CNN or Joost or high-def YouTube or some random TV startup that tipped the balance. I'm surprised it's taken this long, to be honest.

The problem is that marketing people often think they're smart. "Let's call this 'unlimited', it'll make great catchy adverts! And nobody will ever use it - we've analysed the historic traffic data & extrapolated it". Or "If people use 700MB a month on average then they won't risk just going for the 1GB option, we can offer them 3GB for another £5 a month and improve our margins as usage will stay constant!".

Unfortunately, it's quite common that end-users, and especially developers and hackers, are smarter than marketing people. And they're quite good at spotting cheap excess capacity that's been sold to them in the expectation it wouldn't be used.

And marketing people are often unwilling to look into the future to spot possible flaws in their arguments. That's why one of my larger competitors as a thing called a hype cycle - it's because companies in the telecom industry always focus on here-and-now problems without thinking about what the generally quite predictable second-generation problems will be - or how long they'll take to solve. And if you haven't got the time or broad vision to spot these prospective issues... then find someone else who does. (Subtle hint: cross-technology analysts & consultants....).

Other industries have long been able to predict risks and put policies in place to stop abuse. "All you can eat buffet! Conditions apply: Maximum 1 hour, no sharing, no takeaways, you get charged extra if you don't eat all you have on your plate". And it works - as long as the conditions are stated clearly & upfront, and not buried in a mountain of fine print, the system becomes "ungameable" - the customers know the score as soon as they look at the menu (and the contents of the buffet), and are able to make a judgement about the real value on offer.

But if you design a marketing proposition on the basis that peoples' behaviour won't change, even when they understand why the deal can be made to look so tempting then you're naive. And you'll be out of business.

People like exploiting loopholes and feeling that they've "won" against the system, whether it's taxes, clothing sales, or broadband. There's satisfaction in "putting one over" on those annoyingly smug marketing types who bombard us with adverts in aggressive attempts to part us from our hard-earned cash. And as the world gets "smarter" there's an ever-growing phalanx of software developers around to help us automate our revenge.

I can see the same problem moving to the mobile space over time. There's lots of "unused capacity" sitting around, waiting to be exploited. Flatrate data plans. 'Spare' minutes and SMS's at the end of the month. If you're in a room with 20 people (a cafe, say), there's a very good chance that someone has a month-end coming up on their contract in the next few days.

A simple algorithm could work out the likely amount that the person will use based on past behaviour, plus a "safety margin". So you have a 1GB data cap... you've used 500MB by day 27.... so perhaps you can exploit 250MB. I can think of several ways this might work (contact me if you're interested in exploiting - or preventing - this type of thing).

Bottom line: Marketeers - if you try and "game" your customers into upgrading unnecessarily, spending more to get less, assuming loyalty despite poor service - or you expect them to underuse services compared to "what it says on the tin"..... then expect them to game you back under your own terms and conditions. And win.