ISP Extras a Great Revenue Stream - Added value services generated more revenue than broadband...

ISP Extras a Great Revenue Stream - Added value services generated more revenue than broadband...
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ISP Extras a Great Revenue Stream
Added value services generated more revenue than broadband...
(old news - 12:25PM Friday Sep 07 2007)
tags: business · security · stats · content

Most ISPs are terrified of becoming "dumb pipe" providers, so in addition to offering broadband, VoIP, TV and wireless services, they're also getting into the content business in a big way. A new Point Topic study looks at the money being made via broadband value-added services (BVAS, because this industry clearly lacks acryonyms).

BVAS include such services as added security protection, content or gaming downloads, home networking services, VoIP service and IPTV. According to the firm, these services brought in more than 25% as much revenue as basic broadband access during 2006. Telephony and security services accounted for roughly half of all revenue generated by operators.

Average revenue per user jumped from $65 per user per year at the beginning of 2006 to $88 at the end of the year. These numbers are only going to grow, given the evolution of video and IPTV, as well as the growth of full tech support services such as Cox's tech solutions and Verizon's premium tech support.

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ztmike @ 7th Sep 12:21PM:
Dumb

Sadly theres alot of "average Joe's" who will pay extra when they could get it for either cheap or free, and seeing as the world is going more towards computers, you would think people would know more about computers, obliviously not.
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MrMoody @ 7th Sep 12:24PM:
Good for them

They make money, they're happy, it doesn't cost me a dime for stuff I don't use, I'm happy. Just goes to show, you CAN give people a choice and still make money.
--
"It is a future in which globalization really does work ... and everybody winds up getting to be part of the third world." - William Gibson
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inteller @ 7th Sep 12:37PM:
Making money off of dumb.

Yes, but what it means for you and I is that we gain access to an economic bracket that the dummies never will because they are too busy spending their money on things we don't have to.

It is hard to make money off of smart, because those people can do it themselves as well as question the way you do it. Only good money is making money off dumb.

--
"WHEN THE LAUGH TRACK STARTS THEN THE FUN STARTS!"
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morbo @ 7th Sep 12:41PM:
premium tech support = downgraded service

are people blind to the fact that with a "premium tech support" system in place, those not subscribing to it have actually been downgraded or lost value on their existing service? it's like not getting a raise year after year. inflation still happens so you are actually losing money/value.
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axus @ 7th Sep 12:53PM:
Re: premium tech support = downgraded service

When there is competition, tech support service level would factor into it. But, you know most people look at cost and speed, not tech support. But if you've got a choice, pick someone who has the best customer service! My first concerns are censorship, reliability, and upload speed, and fortunately I can choose one that meets my needs. I don't care about tech support, but I think it could be a good differentiator.

Nothing wrong with charging extra money for services, nobody is forcing you to buy them. Premium tech support isn't required to fix something the company did wrong... if it is, then switch to their competitor and tell everyone how crappy they are.
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morbo @ 7th Sep 01:02PM:
Re: premium tech support = downgraded service

premium tech service just gives the providers an excuse to downgrade the standard tech service. why? to make more money, and to give the premium folk their value.

providers then have no reason to maintain or improve standard tech service. follow the money---they will try to get as many people as possible to pay for "better" tech service so standard service will decrease even further.

hate overseas tech support? hate waiting 30 minutes for a human to answer the phone? pay us more money! yes, we used to give you this service for free, but now pay up. we are greedy.
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openbox9 @ 7th Sep 01:04PM:
Re: premium tech support = downgraded service

How is it a downgrade if you are still receiving the same support as you were before? Now if a provider said that they will no longer provide support unless you pay for support, then that would be a downgrade.
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morbo @ 7th Sep 01:15PM:
Re: premium tech support = downgraded service

i'm not receiving the same support as before. downgrades:

1. tech support to india (can barely understand them and they can't solve the problem, in the 3 times i've had the displeasure of dealing with them)
2. hold times have increased

how is that the same? plus, the provider now has a clear financial incentive to provide less to standard tech so that people are so disgusted they will pay for "premium" support.
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Ahrenl @ 7th Sep 01:21PM:
Re: Making money off of dumb.

It's hard earning money from smart people because you actually have to add value. However it is infinitely more rewarding, and can be more profitable.
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Ahrenl @ 7th Sep 01:23PM:
Re: Good for them

The problem is when they begin replacing the services you do actually use and pay for with a lesser implementation, and then "compete" by jacking the prices to your 3rd party content provider through access fees, without actually providing ANY services to the 3rd party.
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openbox9 @ 7th Sep 01:44PM:
Re: premium tech support = downgraded service

1. I'm guessing that tech support was already outsourced to India and was not a direct result of the creation of the "premiere support" option.

2. That is a potentially legitimate complaint. Do you have numbers to show the before and after?

The provider still has a requirement to satisfactorily provide the service for which you are paying. Anything less is default of contract. Anything additional that you may have received in the past is a bonus. I find it difficult to believe that if customers are disgusted with the level of support from a company, that they would be willing to pay more to that company...I know I wouldn't.
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MrMoody @ 7th Sep 02:21PM:
Re: Good for them

This could happen, it's one of the dangers of allowing vertical market penetration. But it hasn't to any degree. I think competition and customer outcry are enough disincentive for now.
--
"It is a future in which globalization really does work ... and everybody winds up getting to be part of the third world." - William Gibson
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MrMoody @ 7th Sep 02:37PM:
Re: premium tech support = downgraded service

said by morbo :

are people blind to the fact that with a "premium tech support" system in place, those not subscribing to it have actually been downgraded or lost value on their existing service?

I don't think much service has moved from "standard" to "premium", I think it's more a case of adding more services to "premium" which they would have just refused to deal with before. "We don't support third party routers" is a good example.

And personally I don't care what they do to "standard" support, because I never need or use it except as required to get past the "dummy filter" to report a service problem. The less money they spend on "free" support, the more they can put into infrastructure and network capacity.
--
"It is a future in which globalization really does work ... and everybody winds up getting to be part of the third world." - William Gibson
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S_engineer @ 7th Sep 02:45PM:
Re: Making money off of dumb.

Wow...a proper business ethic...well said!

This also sets would could be an evil precedent for the ISPs. Remember Webroot taking money from 180solutions to be de-listed from their defintion list?
Now imagine your ISP pulling the same crap. First they take money from a 180solution type (forgot their current viral name), and then they sell you the product to get rid of it!

Now I know this isn't the current intention of the ISP, but business models change daily!
--
Burn a tire, but make sure you buy that carbon offset!
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Ahrenl @ 7th Sep 03:35PM:
Re: Good for them

I suppose we could just wait for them to follow through on what they've stated they would do, until the whole public outcry thing blackboxed it again. Don't forget it will be a slow squeezing gradual degredation. More profitable that way as you can capture some of your soon-to-be-X competitors revenue's with zero effort.

In 5-10 years when you're going to Embarq.net (or whoever) to search, check your email, do your banking, read your news, and buy anything online, please give yourself a smack in the forehead for me, and maybe a nice loud "doh!".
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BF69 @ 7th Sep 06:40PM:
They still don't get it.

"Most ISPs are terrified of becoming "dumb pipe" providers,"

Yes this is what we want from you. Nothing else. Stop all the other crap.
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Mactron @ 7th Sep 08:40PM:
Re: They still don't get it.

said by BF69 :

Yes this is what we want from you. Nothing else. Stop all the other crap.

When VZ can no longer reliably provide, or overly increases the cost of the "Dumb Pipe", I'll move on. Their add on Fluff makes no difference to me.
--
If only the Verizon CSRs worked this well. ;)
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inteller @ 8th Sep 09:48AM:
Re: Making money off of dumb.

said by S_engineer :

Now I know this isn't the current intention of the ISP, but business models change daily!

The road to Hell is paved with good intentions. The HOV lane is paved with evil ones.
--
"WHEN THE LAUGH TRACK STARTS THEN THE FUN STARTS!"
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