Telecosm - Ike Elliott

Comcast Wins a BUNGL for Misleading Advertising

It's way too easy to pick on Comcast's marketing department, I know, but sometimes you just have to shine a spotlight on the idiocy.  Comcast is now running ads boasting that they have the "largest fiber optic network", and that their fiber optic network serves "ALL our homes."  Give me a break!

This "We already have a fiber-optic network serving ALL our homes" spiel is SO annoying.  So Comcast runs a fiber optic cable to the node somewhere near your home.  Big whoop.  SO DOES EVERY RESIDENTIAL NETWORK IN AMERICA.

This deserves a BUNGL in the worst way.  Everybody knows that Verizon's FiOS service runs fiber optic cable all the way to your house, and Comcast's service does not, and that Verizon's fiber to the home gives each customer much more potential bandwidth than Comcast's bundle.  That's why Verizon doesn't have to compress their HD channels as much as Comcast does, and why FiOS customers usually get higher Internet bandwidth than Comcast customers.

What burns me about this ad is that it disrespects the customer.  The very existence of the ad shows that Comcast believes their customers aren't smart enough to figure out that they are engaging in a snow job.   

Bottom line: customers are mostly interested in stuff that matters to them, stuff like real available bandwidth, uncompressed HD video, and high availability phone service.  Right now Verizon's FiOS is winning on all three of these measures that matter, and Comcast's only answer is the promise of an upgrade and some lousy FUD advertising about network design.

Congratulations, Comcast.  You are the first two win two BUNGLs!  I can't think of a more deserving winner. 

 

HBO Caves Under Pressure From Telecosm

Time Warner's HBO subsidiary is about to do a deal with Apple to distribute its shows on iTunes.  Of course, this breakthrough was only made possible by the Telecosm blog, which awarded a BUNGL to HBO in January for it's prior online distribution strategy, which allowed you to get HBO shows online only if you were a digital cable subscriber and only if you bought your Internet access from a cable provider.

Now, the immense pressure brought to bear from winning a BUNGL has clearly caused TW and HBO to change strategy. 

"When we got the BUNGL a few months ago, it was a real wake-up call," said Jeff Cusson, HBO's spokesman.  "That's when we knew our marketing strategy was deranged, and needed an overhaul."

HBO's coming deal with Apple still has some catches: the shows distributed through iTunes will have delayed availability, only after the full-season DVD for each show is released.  Still, it's a step in the right direction...thanks to the incredible power of the BUNGL.

Editor's note: this article is an example of what happens when an over-imaginative blogger  gets his tongue stuck in his cheek. In other words, I made it up.

Comcast Wins a BUNGL For HD Compression

The Associated Press is now reporting on the additional compression that cable companies are imposing on High Definition channels, that I reported on earlier this month.   The 3:1 compression creates a visibly inferior experience.  As one user put it:

"I couldn't really tell if what I was seeing was really better than what I saw on regular television"

The point here is that users are being ripped off, paying for high definition channels that they aren't really receiving, and for that achievement, I'm awarding a BUNGL to Comcast. 

This makes two BUNGLs for the cable industry, giving them sole position of first place! 

T-Mobile wins a BUNGL for Talk Forever Mobile Service

The envelope has finally arrived from the Academy, and T-Mobile has one its first BUNGL award!  This on is for the expansively named  "Hotspot @Home Talk Forever Mobile" service.  The service is a fine way to get you to overpay for your VoIP service simply because T-Mobile forces you to use their handset.

Here's how it works:

• If you don't already have a wifi router on your broadband internet access service, you can pay $50 for a wifi router from T-Mobile. 
• Pay $39.99 per month (or more) on a postpaid T-Mobile wireless phone account
• Get a dual-mode GSM/wifi handset.  The Samsung models are subsidized and free, but the subsidy on the Blackberry Curve still leaves you paying $249 out of pocket.
• Pay $10 per month for the privilege of using your T-Mobile handset you bought, with the internet connection you are also buying, to place VoIP calls through the Internet to the T-Mobile network.
• When you are at home, in range of your wifi router, your mobile phone makes calls through your wifi hub and your broadband Internet access service and the minutes don't get charged against your plan's minutes limit.

So, your one-time costs could range from $0 to $300, and your monthly recurring costs will be at least $50 a month. 

To get inbound and outbound VoIP minutes a la carte through Skype, you would pay about $6 per month, versus the $10 per month incremental charge from T-Mobile for the Talk Forever service.

So, T-Mobile charges a 67% premium over Skype, and T-Mobile gets to off-load your traffic from their precious wireless spectrum, onto the "free" Internet, and charge you for the privilege.  Plus, with T-Mobile you have to buy either the Samsung or the Blackberry phone...you don't get to choose a different wireless phone if you want to.  And any data usage or text messaging on the dual-mode phone that happens to use the Internet instead of the T-Mobile network?  It counts against your plan's limits on data usage and text messaging.

Sounds like a good deal for T-Mobile, but not for you!

I Feel a BUNGL Coming

The Academy has just notified me that they have another BUNGL winner, and that I should have the envelope tomorrow.

What's a BUNGL?  This prestigious award is given to companies that engage in any of several forms of "bundling gluttony", which is product bundling that benefits the company more than the consumer.  Past award winners are proudly displayed in a sidebar on this blog. 

In the long, distinguished history of this award, only two BUNGL's have been earned:

• Time Warner, for their bundling of HBO Online with cable high speed Internet and digital cable service.
• Microsoft, for their open source strategy.

Rumors are leaking out of the Academy that tomorrow's BUNGL will be the first awarded in the wireless category. 

As always, the Academy takes nominations for BUNGL award winners, so send them my way as comments to posts on this blog.

Thanks!

Microsoft Wins a BUNGL For Open Source Strategy!

Microsoft has been in the news a lot lately, mostly for trying to join up with a reluctant Yahoo in an effort to buy a search and advertising victory that it couldn't earn.  The proposed acquisition of Yahoo is already being panned in the blogosphere, so awarding a BUNGL to Microsoft may seem like piling on, but if you do the hard work of earning a BUNGL, then I can't withhold it from you, so here goes.

Micrsoft is the February, 2008 winner of the Bundling Gluttony (BUNGL) award, for their inspired open source software strategy.  Mary Jo Foley describes the strategy by saying

Microsoft wants to encourage the coexistence of two software stacks: a Microsoft Windows stack (Windows, Internet Information Services, SQL Server, .Net) and a Linux-free/Windows-centric LAMP (Linux, Apache, MySQL, PHP) stack, minus the Linux – something like a “WAMP.”

(More on Mary Jo's "All about Microsoft" blog here).

Hmm.  So Microsoft wants you to run free software on top of software that you have to buy from Microsoft, instead of running free software on top of other free software.   Is it just me, or does that kind of work against the first instincts of most open source users?

But why is Microsoft's open source strategy worthy of a BUNGL?  After all, Microsoft isn't forcing customers to buy Apache and Windows together. 

Here's the rub: Microsoft is very happy to sell you Windows when you want to run Apache on it, but they refuse to port Microsoft Office to Linux.  Their open source strategy is a thinly-veiled attempt to kill the one true open source operating system competitor, Linux, and they will do anything in their power to make it harder for Linux users to continue to use Linux, including working to make Apache, MySQL, and PHP interoperable with Windows.  The emperor is attempting to dictate to the market which open source applications it can live with.

By contrast, Google has used open source as a very effective weapon against Microsoft, as reported by my friend and blogging inspiration, Mitchell Ashley. 

By having an open source strategy, Microsoft is holding out an open hand of friendship to the open source community, while their other hand is behind their back, holding a knife. 

So, for disrespecting potential customers in the open source community by thinking they could fool them into buying Windows, I award Microsoft the February, 2008 BUNGL.  Congrats, and we're looking forward to more creative attempts at market manipulation in the future. 

The BUNGL Awards!

A few weeks ago I accused Time Warner Cable of committing the sin of bundling gluttony when they made the online version of HBO available only to subscribers of both cable Internet and digital cable services.  So, now I am inventing a new award reserved for those companies that torture their customers with product bundling:  the BUNGL award.  If a company demonstrates that they are a bundling glutton, I will ceremoniously award them with a BUNGL.  Time Warner Cable has the honor of winning the first-ever BUNGL...congratulations, Time Warner!

Now, I know that many companies out there are taking notice and wondering how to win this coveted award, so I think it is only right to publish some guidelines:

1. You have to bundle two or more products or services in a single offer.
2. You get extra points if your offer is coercive, forcing a customer to buy at least one item that they really don't want.
3. It helps your chances if your offer benefits you more than your customer.

I'll take nominations for BUNGL awards, of course, so you can send your nominations to me as comments on any BUNGL-associated blog post.  I'll keep a list of BUNGL award-winners here on the blog, so you will all have easy access to the list. 

I'm looking for some kind of trophy, something that would really capture the BUNGL and all the glory it represents, so please submit your ideas.  We'll put a picture of the winning trophy idea up here on the blog, too.

I'll award a few BUNGLs every year, and then at the the end of the year, I'll select the "BUNGL of the Year" for the highest honor. 

And now, a teaser...I have an envelope in my hand, and inside is the name of the second BUNGL-winner of 2008.   I'll open the envelope on Monday, so stay tuned!

Time Warner Cable Commits The Sin of Bundling Gluttony

When I read how one of the last media properties to resist online distribution of their content, HBO, has now launched a broadband download service, a big red light started flashing in my brain, because it comes with a catch:  you have to be a digital cable subscriber to the HBO cable channel, and you must use your cable provider for Internet access, in order to get the HBO broadband download service.  Of course, HBO is owned by Time Warner Cable, so Time Warner has no interest in unbundling their content from their purpose-built hybrid-fiber-coax headend-based video distribution plant. 

By restricting users of HBO Broadband to digital cable subscribers using a cable-owned Internet access, Time Warner is committing the sin of "bundling gluttony," and their customers will take note and resent it.  Time Warner is just resisting an inevitable unbundling of content and distribution.  There is a ton of content out there that isn't owned by the cable companies, and, as water always finds its way downhill, this "unaffiliated" content will seek out the most efficient and ubiquitous distribution service.  If Internet Protocol isn't already the most efficient or ubiquitous, it will be, someday. 

Any more, when I get a bundling offer from any service provider, my internal "marketing alarm" goes off and I get suspicious that the service provider has a lot more to gain than I do if I take the offer.  And what is the worst kind of bundle?  It's the kind that mixes layers in the network stack, like this latest HBO bundle does.  Okay, so if I want The Sopranos on my PC, I can't get it if I buy my Internet access from Verizon?  And, even if I buy Internet access from Time Warner Cable, then I still can't get The Sopranos on my PC if I don't buy the digital cable package with HBO from Time Warner, too.

It's enough to drive a man to illegal file-sharing.

Please, please, just let me choose my Internet access, and let me make a separate choice about what kind of content I want to buy.