AT&T Can’t Kill Pandora

Or can it stop consumers from watching YouTube all day.

Or making streaming radio too expensive for most.

When AT&T announced yesterday that it would soon do away with its unlimited data plan for new wireless customers and put caps on usage – albeit it at lower prices – what did you expect?

Data costs money and people on AT&T phone systems in New York and LA would like to not have their mobile phone calls dropped as frequently as is now happening because the system is overloaded.

The conventional wisdom on AT&T’s move is that this big, bad company’s decision is going to adversely affect the growth of iPhones, iPads, smartphones and other mobile data devices.

I don’t buy it.

In fact, I almost could argue the opposite – that the announced elimination of unlimited data plans will not put a crimp in the astronomical growth of mobile viewing, reading and listening.

Radio, that means you’re safe.

People who like to use a cellphone as a radio can still do so. Actually, comparatively few people use a cellphone like a Walkman, but…

Pandora? No problem.

Pandora claims “We actually don't consume as much bandwidth as people think. Less than 0.5% of our listeners would be constrained by the 2GB option”. Pandora told The Wall Street Journal only a small percentage of users would be affected by the new limits being placed on AT&T data plans.

Are you still worried?

AT&T claims two-thirds of its smartphone customers use less than 200 megabytes a month and that 98% use less than 2 gigs offered under the biggest AT&T plan.

The average iPhone customer uses 250 megabytes of data each month.

It could cost users of YouTube, MLB or Netflix more on a monthly basis.

According to The Journal, the new price structure would be:

“In place of a $30 unlimited monthly plan, new AT&T subscribers will be able to choose between paying $15 a month for 200 megabytes of data or $25 a month for 2 gigabytes of usage. Consumers who exceed the monthly limit must pay $15 or $10 additional, respectively”.

So here’s the deal.

Nothing mobile or Internet is going to be free anymore.

As I’ve said before, an increasing number of online content providers that offer unique material will charge micropayments or subscription fees. While there will always be free Internet content, not all Internet content going forward has to be priced at zero.

We are entering a new age of commerce in the mobile Internet space.

Free is one price.

Paid is another.

There will now be a charge to promote conservation.

Long-suffering AT&T customers like us are forced to use the carrier so we can own iPads and iPhones. I wouldn’t pick AT&T out of a lineup as a phone carrier – that’s my opinion.

And here are the pros and cons on the new age of paying for conveyance.

1. You’ll spend on that which you value most – even heavy data habits such as YouTube videos or Atlanta Braves games streamed on You decide how to spend your data “miles”. The meter is now running.

2. For most Pandora listeners, the elimination of AT&T’s unlimited data usage programs is a non-event. It just doesn’t impact most Pandora users to the point of having to pay more, eat canned tuna or go hungry.

3. Satellite radio doesn't benefit vis-à-vis Pandora, streaming radio or any other service. Satellite radio is not free either.

4. Then free radio has to benefit, right? Not necessarily. That’s a different argument. Data users and mobile device holders see these things in a different light than free radio. AT&T can keep raising its prices and free radio will not gain one advantage. It’s apples and oranges.

5. Netflix and Blockbuster won’t be jumping for joy, either. That model of mailing out or picking up a movie works for some but is no longer a growth business. I believe consumers will continue to opt for more paid data usage if what they want is movies delivered right to their mobile devices.

6. Even Spotify’s model that lets consumers (not presently in the U.S.) put thousands of songs on their smartphones for replay off the network will not gain an advantage because of AT&T’s decision. After all, you have to pay Spotify a monthly fee as well to keep listening to the songs.

Verizon will up their rates next.

Others may follow.

Sprint may resist and use that as a positioner against their giant competitors.

But one thing is for sure.

Carriers will charge for data usage that exceeds “normal” rates.

Consumers will pay.

Both industries will continue to grow.

Don’t doubt for one minute that putting a meter on a cellphone or iPad will hinder the growth of the mobile Internet space any more than charging for water has hindered the bottled water business.

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