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VC firm Andreessen Horowitz just invested $15.5M in ItsOn, a startup hoping to change how...
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Tuesday, October 30, 2012, 11:50 AM ETVC firm Andreessen Horowitz just invested $15.5M in ItsOn, a startup hoping to change how carriers such as AT&T (T) and Verizon (VZ) charge for mobile data. Instead of charging users monthly for a bucket of data good for any app, consumers, carriers, and developers would be able to pay/bill for specific apps over various periods of time. Getting carriers to change is never easy, but the fact AT&T and others have already talked about per-app billing suggests ItsOn's approach could find some takers.
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This news story has 2 comments:
1) If it allows carriers to target cost-sensitive users who don't want to pay for expensive smartphone data plans by allowing them to buy access to a handful of popular apps, such as Facebook, Twitter, Gmail, Maps, etc.
2) If it allows carriers to profit from developers of data-hungry apps paying them to keep user consumption from counting against existing data plans. For example, Netflix, Pandora, or YouTube could offer $1/month to keep their apps from counting. They might decide it's worth it to maximize subscription or ad revenue.
One thing's for sure: carriers won't do it until they first take a hard look at the bottom-line impact, and decide the revenue opportunities more than offset cannibalization of existing services.