Subscriber Capitalism vs. Subscriber Privacy
I have not posted on Medium in a while. I hope to change that. With that said, below is a copy of a post I wrote in my weekly email letter called The Operating Partner. I think you will enjoy it — and if so, subscribe to my OP letter for more content like it. I have recently been writing about Amazon as well.
This post is about AT&T vs. Verizon. Frankly, it could be about any carrier who wants to deposition the others. I hope you enjoy.
I would venture to guess that 100% of the people reading this Operating Partner letter has a mobile device, which connects to either Verizon, AT&T, Sprint, T-Mobile, or some other network.
According to Statista, Verizon Wireless subscription market share in Q1 2017 was 35% and AT&T was 32.1%. Together, 67% of the US subscription market has Verizon or AT&T.
Verizon Wireless is going down a very interesting path. They have they been most expensive to the subscriber over time (I cannot find the exact fact to support but I am sure it is out there) and are looking to additionally monetize the user through data infused advertising. Earlier this week, Verizon discussed their intention of collaborating with T-Mobile, Sprint, and others to leverage their data as well.
Verizon has a mobile device business (Verizon Wireless). Verizon has FIOS for the home — Internet and TV. Verizon knows exactly who a user is on their network and can build a very robust graph of them in the home and out of the home. This is multiplied by all of their hotspots around town as well. If a person is exposed to an ad on TV (FIOS), Verizon theoretically knows if that person visits a store that carries said advertised product (Verizon Wireless) via location tracking. They may need to augment a bit with third party databases but I’m making the point that they have the infrastructure for the centralized identity of a Verizon customer . Correct me if I am wrong but this feels more powerful than Facebook or Google (I guess one can make the case about Android).
The acquisition of Yahoo! & AOL — wrapped up into Oath — speak to bundling this rich data along with media. I imagine the corporate development folks ran numbers to proforma the ability to raise CPMs pre-acquisition against post-acquisition because of this data infusion.
I am a data driven marketer and believe in the use of data. I am also a strategic marketer and see a clear path for AT&T to gain share by doing the complete opposite of Verizon here: allow subscribers to be private and untouched for data and advertising purposes. This may be a little of my Mozilla background speaking but there is a clear path to positioning against Verizon here for AT&T. Make the network about subscriber privacy, not subscriber capitalism. If advertising is the tax on the poor… per Professor Galloway, then AT&T can make a very strategic move here.
I can see a national campaign with local heavy up “AT&T, the only network at scale which does not sell or use your data” (or something of those lines).
The bigger question will be who cares? Do subscribers in the US care enough to either switch from Verizon to another carrier or opt-out of Verizon’s platform (if they allow for that). I imagine that in Germany, subscribers would be up in arms. This could also go in the complete opposite direction: could Verizon find a way to create so much value from this platform that people do not mind it?
As always, these views are my own and not those of my employer. Thank you for your time and attention for reading this!
