Site icon Jake Ludington

Mobile Service Providers Play Gatekeeper

The analyst prediction of service provider tolls to allow iTunes on Motorola devices should come as no surprise. Verizon wants all content to pass through Get It Now, where they collect fees with a closed system. This is the same strategy used by AOL to create a gated online community for PC users in the early days of the Web. Bypassing the gatekeeper reduces switching costs, making it harder for cellular service providers to lock consumers in. The most important barrier to brand loyalty was already broken with the introduction of number portability. If cellular customers get a chance to access universal services like iTunes Music Store and take their number with them, providers no longer have any means of trapping consumers.

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