The Vogeler

It's All About Technology

Game of “Convergonopoly” December 6, 2009

So the article your Television is Ringing discusses how companies are moving more towards convergence in order to reduce costs by pooling their resources under one brand or name.  We have all played the game of Monopoly before  (and if you haven’t you should definitely give it a try- but basically you try to acquire as many properties so that you can eventually charge more when other players land on them. The players have no choice later but to pay you the higher price regardless of what the services cost previously.

Do Customers really want Convergonolopy?

What is interesting though when these companies are combining their services to make bundled plans is that they assume that customers want all these services: land line, cable TV, cell phone, and internet. For me though, with the added  internet capabilities of watching content online, and being able to call people via skype, I am moving away as a consumer from landlines and cable TV. These bundle deals are just a dying attempt by landline companies to retain their customers who move to mobile cell phones. The future is internet and cell phones – or just cell phones if Wifi is everywhere. The only way I would buy a bundle deal is if it was the equivalent to what I would spend on my cell phone and internet. 

Who will Succeed?

The companies which are hesitant to cushion the fall of the landline and cable companies by joining forces are the ones that will survive. The article mentioned specifically that Vodaphone was hesitant if not resistant to the joining of forces. Internet providers and cell phone provides will sell the new innovations that people can’t wait to have, not just the old technologies that are sold to them in a bundle.

I am not arguing that convergence should never happen. I have enjoyed bundled plans in the past. But for the future – the companies that will be more successful are the ones that stand apart and introduce new innovations, and not cling onto the past. The companies that retain control of pricing for their customers and enable highest choice of products while still keeping the price levels down. Basically, good companies will not only converge but will also diverge to maintain their autonomy and individuality in their brand in order to do things different for the customers sake – not just their own.

Inevitability

The game of “convergonopoly” can be brutal for the consumers. Even though right now they claim that their prices are cheaper by getting a bundle. Consumers soon will not need the “extra” services they offer. Vodaphone knows this…hopefully others will observe this inevitablity as well.  

Questions:

1) What companies do you think are most successful at converging? There are obvious gains but what do companies lose when they converge?

2) What companies other than Vodaphone would you assume would be more autonomous (perhaps divergent) paths in the future? Why?