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Tech Needs TV

Nickled and Dimed into Hating the Cloud

Posted by Doug Garnett August - 9 - 2011 - Tuesday

The “cloud” has invaded computing, fortunately using a name that offers incredible marketing honesty. Because what is the reality of the cloud? Mostly that it makes hazy and unclear the costs we are signing up for and, as shown by many recent outages, delivers service as reliable as weather forecasting.

I’m no longer technologist enough to offer a thorough analysis of cloud foibles. These thoughts come, instead, from my experiences as a consumer of cloud based services.

A little here, a little there… As a parent, it infuriates me the way corporations leverage the vagueness of the cloud to drive up the costs of computer games for children. In one horrendous example, Lego charged over $30 for their Lego Universe game (which worked merely sporadically on the Mac) then required (yes – required) an additional monthly “cloud” charge ($10 if I remember correctly). In other words, for one game a full year of play was $150. (In the ultimate Lego hubris, the game was very similar to another already popular online kids game.)

And more here, and more there… As a head of household, I’m stunned by the constant trickle of fees for cloud based TV. A monthly fee for Netflix streaming. But since this has, oh, perhaps only one in 20 of the things we want to watch, we then trickle our $3.99 and $4.99 charges to Comcast on-demand and Apple for iTunes rentals. And then there would be a Hulu subscription (another $10 or more per month), traditional rentals, plus our cable bill – because traditional TV is the source of most of a family’s viewing despite all these clever additions.

And it can get much, much worse. What’s particularly scary is that these are the only places I’m willing to pay for the cloud. There’s thousands of other opportunities facing us where the monies can keep stacking up.

Economic Cloud Truth. Why worry about $4.99 movie charge? Because over time, these fees add up. And soon, a full-service cable bill of $150 for both cable and internet begins to look pretty cheap. Eventually, consumers will figure this out and their willingness to pay cloud fees will drop.

Is everything I described here really a cloud service? I can’t tell. As a consumer, all I know is the shift from selling me programs and hard services into soft services is driving up what I’m asked to spend. Besides, the truth about clouds is they aren’t well defined and have fuzzy edges.

(As an aside, my tech historian friends point out that the cloud is nothing new – just a new application of the mainframe computers we all started with.)

Buried in the economics of the cloud is a very critical lesson: cloud service providers find they have to keep their prices low. Why? Because they don’t deliver enough value to get anyone to pay more. And that suggests that the nickle and dime-ing won’t go on forever.

Aristophanes wrote “The Birds” about an idealized state called Cloud Cuckoo Land. Perhaps he gave us an accurate analogy for the place tech companies (and their very silly advertising) are taking us. Cloud hoo-ha these days sounds quite lost – high up in the ozone where birds think they own the universe (happy birds – not the angry ones).

But don’t give up hope. After all, the sun will come out – some time if not tomorrow. And once again we’ll be able to reliably predict outages AND what things cost – because the clouds will go away and reveal the full light of day.

Copyright 2011 – Doug Garnett. All Rights Reserved


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Doug Garnett, DRTV and Technology Industry Expert

Doug Garnett is founder and CEO of DRTV agency Atomic Direct and a leading expert on innovative uses of DRTV, infomercials and other in-depth TV and non-TV messages to build brand and drive sales.

Doug has been working in and around the technology field for 27 years. After starting in aerospace, he spent 5 years selling and marketing supercomputers. Since shifting to advertising, his clients have included AT&T, IBM, Apple, Disney Mobile, Ugobe, Presto, and Netpliance.

Doug sits on the editorial board of Response Magazine, is an adjunct professor of general advertising at Portland State University, and is a member of the Jordan-Whitney Greensheet Panel.

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