Prepaid boom bodes well for news media

By Clyde Bentley on May 6, 2010 2 Comments

Clyde Bentley, 2009-2010 Fellow

The mobile buzz this week is about the rise of pre-paid phones and Nokia's blossoming partnership with Microsoft.  While on the surface both seem distanced from the news business, both could in fact push us all the faster into the mobile era.

After it's latest financials showed prepaid cell phones saved its corporate bacon, the company announced major upgrades in its non-contract mobile phone business.  It launched a new division to complement its Virgin brand and slashed prices for its top-off cards.  The key item to read in that price cut is that Virgin now offers unlimited Web access, e-mail and text for as little as $25 per month.

Prepaid phones?  Like those cheapies that TV mobsters buy at the newstand to signal a hit?

Actually, Sprint and T-Mobile offer Blackberries with no-contract, pre-paid plans.  AT&T has a $55 3G phone from LG.  And all have souped-up feature phones that will access the Web for about a half-cent a minute.

If the prepaid boom sparks a cell phone price war, as predicted, this could dramatically speed up the adoption of Web-enabled phones in the United States.  A recent Nielsen report confirmed my own research that a significant number of people are driven away from high-tech phones by the prospect of a 2-year contract.  They either have poor credit or simply don't like the hassle.

The news media cannot survive only on the well-salaried, college-educated demographic that so far has flocked to iPhones, Blackberries and Droids.  But if a timeclock-puncher can choose to pay for Web service just a few times a month to access a newspaper's food section or just turn on the data plan during the World Series, we have an foot in the door to their information world.

Consider the possibilities: Offer top-up data minutes in circulation contests.  Slap a logo decal on a pre-paid phone and giving it away with a print subscription.   Post a daily, quick download news summary that costs the user just a couple of cents.

Prepaid is the norm almost everywhere in the world except the U.S.  Here it may come from the same customer revolt that drove newspaper subscribers to digital alternatives.  Much like newspapers, the phone companies offered take-it-or-leave-it pricing and service.  And like the Web for newspapers, the prepaid boom is making that last option much easier.  Maybe this time we will be the ones positioned to catch the fallout.

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Comments

I would say that the prepaid

I would say that the prepaid war has been in progress for quite some time now as prepaid vendors are gaining popularity in the US. Nowadays, you can get unlmited minutes for $45 with Prepaid. Although that would be too much for me who consider myself a moderate user and opted for Net10...quite happy paying $15 for my cell phone usage and liking the coverage and the no string attach policy.

Traditional newsmedia like

Traditional newsmedia like newspapers are finding new ways to get their information across. Many offer electronic version that can be accessed via computers and cell phones and with the latest gadget in cellphone technology, I think the traditional "paper" is becoming more and more obsolete. They're more relevant for our parent's generation.

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