Whilst telcos rush towards bundling dodecatuple-plays as a defensive measure, budget airlines (i.e. the profitable ones) rush towards unbundling. From my inbox today:
easyJet has teamed up with Servisair/GlobeGround, one of the world’s leading providers of aviation services and Europe’s leading independent operator of airport lounges to launch easyJetLounges, giving you excellent opportunity to escape the hustle and bustle of busy airport terminals when travelling. You can relax in our comfortable Executive Lounges before your flight. Prices start from just £12.00 per passenger including VAT.
Somehow the standard bundling theory — smooth out differential willingness to pay by aggregating the uncertainty — isn’t playing out at the hyper-competitive bums-on-seats network business. Are information goods fundamentally different? What’s really going on here?
Posted by Martin Geddes at 04:41 PMTrackBack URL for this entry:
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This is an amazingly good idea.
Compare and contrast with a recent experience I had on NWA. I had a full business class ticket - they were running a sale for business customers and business class was cheaper than economy (try explaining this to the corporate travel website - my manager got an email ;-)). I was traveling internally in the USA.
I checked in at Seattle and headed for the lounge, only to be told by a snooty ground crew member that the lounge was only for international business class travelers. What??!!!
Now consider the case, when you happen to be away from home turf (in my case, anywhere Alaska flies). Say I'm in Atlanta and I'm tired and want a quiet place to chill out in comfort. Would I pay $12 to sit in Delta's lounge? You betcha!
And it's all profit for Delta - straight to the bottom line - no commission. What a winning idea. They can make as much profit from me sitting in their lounge as they did selling me a ticket for $300.
Posted by: at June 7, 2005 07:25 PMI recently talked with Nic Lai from HKBN (HK). They deliver TV, telephone and Internet (incidentally 10/10, 100/100 and 1000/1000 Mbps commercially for asthonishing low prices). Do they bundle in this hyper-competitive market? No. They found that the decision makers on each "play" in the family and the reasons to purchase were different. And they are happy with that.
Yesterday I talked with a Norwegian. All triple play vendors other than the incumbent are going belly-up. All single play specialists (like Telio) are thriving.
So....a message to all lemmings in telcoland: you might be missing important signals in the market.
Posted by: at June 8, 2005 12:00 PMI kept thinking of the 'Il Divo'/'Toni Braxton' song! Unbundle me, say you love me again!
Basically telcos are treating the customers like cattle right now and 'triple-play' is attempting to suck us dry for the same grass we always got.
If I draw it out as a baseball analogy (as a Scot, I know f--- all about baseball so excuse me if I get it wrong) and put the resources the telcos have on the bases, then I'd have to say, I would throw to first and make sure the network access was knocked out. Content is already Home, IP TV is nearly at third base and Voice is rapidly approaching second. The next guy up is Barry Bonds, so it's all about damage limitation, not attempting triple-plays.
Then again, I was saying the same thing a few years back about MVNOs (that all this packaged nonsense isn't core competence and others can do it better), and it has been a remarkably long time coming.