Influx

Everywhere you turn there seems to be yet another subscription service launching and demanding a monthly fee. Just look at the television; with fees for cable, Netflix, Tivo, online gaming services, and HD services. Then there are personal devices; wireless PDAs and phones with service charges and monthly fees, not forgetting the On-Star service. And with the recent Internet boom, news organizations and publishers are also looking for fees.

There has to be a threshold for how much the consumer or their parents, are willing to pay to keep all the electronic goodies charged with content, especially when interest rates are predicted to rise.

This is significant because the livelihood of two relatively new industries, satellite radio and wireless depends on their ability to convince consumers that their subscription services are worth paying for. These are sensitive times for both industries as they ramp up to reach critical mass. Wall Street certainly believes satellite radio has potential and has recently been talking up the business.

stern boosts satellite’s prospects

For wireless, it’s still early days, but signs of what’s to come are already visible in Europe, where Vodafone has just launched its 3g service. The strategy here is to look more like a media company, than a wireless one, by signing up lots of exclusive content.

vodafone bets heavily on 3g

For wireless, there are two obvious scenarios.

scenario a: brave new world-consumers embrace new services

Here for teens and young adults, mobile phones will continue to represent fashion and credibility. The new media services just add to that. The financial impact will be felt in related industries, where wireless spending will continue to eat into fashion brand and retailers profitability. There could also be a knock on impact for automotive spending, eating out, drinking and other forms of entertainment.

scenario b- wireless becomes the railroad

With revenues dwindling because of wi-fi expansion, companies have to sell multi-media services to generate profits. However, there are no takers, as consumers decide they only want phones as communication devices and any non-communication related feature is rejected.

Clearly, wireless companies will need to invest more heavily in brand based marketing efforts, rather than the traditional price promotions. They must do this to convince the young consumer, that it’s worth cutting their fashion and entertainment budgets, to spend on multi-media services.

Of course, there are many other industries who want these young consumer’s wallets standing by on the sidelines and hoping that the wireless companies fail.