On February 26, 2015, the Federal Communications Commission voted to regulate broadband Internet service as a public utility, a milestone in regulating high-speed Internet service into American homes.
What is Net Neutrality? Net neutrality, or Open Internet, is the principle that Internet service providers (ISPs) should give consumers access to all legal content and applications on an equal basis, without favoring some sources or blocking others. It prohibits ISPs from charging content providers for speedier delivery of their content on “fast lanes” and deliberately slowing the content from content providers that may compete with ISPs.
For examples, let’s say you are stuck with the decision to watch past episodes of The Walking Dead on Hulu or House of Cards on Netflix so you decide to switch back and forth between the two. You notice that the connection speed for House of Cards is faster so you decide to stick with that show. This is because ISPs are able to charge each of companies if they wish to have a faster connection. This can deter consumers from certain brands, as well as drive traffic to other sites.
A monopoly of sorts exists across most States for Internet services. Three-quarters of households have the choice of only one broadband provider while only a quarter have at least two to choose from. The figure to the left shows the share of homes with broadband providers available at each speed.
The recent ruling is one step into making net neutrality a reality. Net Neutrality is critical for small business owners, startups and entrepreneurs that rely on the Internet to launch their businesses, advertise their products, and distribute products to customers. Net Neutrality allows small businesses and entrepreneurs to thrive on the Internet by reaching new customers and showcasing their products and services.
Since ISPs serve as gatekeepers to the Internet, and without net neutrality, they will continue to capitalize on the opportunity to profit from this control. No company should be able to interfere with the open market, especially as a monopoly exists in most states for internet services, as the above data shows. As a consumer, I should have the ultimate decision on what I decide to watch. I should not be manipulated into watching or visiting one site because that site paid the ISP for a faster connection versus their competitor.
What do you think net neutrality will mean for consumers?
Without fail, every morning from about 3 – 6 am, my cell phone buzzes. New email alerts. And every morning, on my morning train commute I check my email by scrolling through 50 – 100 emails from various brands that range from sales to promotions, etc. The emails that stand out me the most are the ones that include my name. More and more, marketers are started to personalize their messages to consumers.
This trend has reared its head more recently. Before, companies were more inclined to throw out a net with generic emails to see how many fishes they could catch. This globalization approach to marketing has worked; we see it with ads that range from TV to print that seem to speak to the masses. However, new tools are in place that allow for marketers to track our interests and behaviors online. Analysts predict a growing number of companies to adopt a consumer-centric approach in order to win customers’ hearts, leaving behind indelible impressions. Personalizing the customer experience is instrumental in creating a trustworthy brand that people can repeatedly return to. This helps with creating brand loyalist and shows customer appreciation. It exemplifies that extra touch of writing a “thank you” note and mailing it versus a text or email that expresses similar sentiments.
Personalized services and ads have been around a long time, especially when dealing with small businesses. I remember shopping with my grandma and the pharmacists and local grocers knowing her name and saying “Thanks again and we’ll see you next week, Winnie.” Larger companies and brands are adopting that “small business” mentality to engage and personalize messages to its customers.
Although, shifting from a macro approach to micro approach may not be as well received from a consumer standpoint. Let’s see what consumers are saying about receiving personalized ads and emails:
At a high rate, consumers, myself included, prefer to receive communication that is specific to their trends.
Do you prefer to receive personalized communications from companies?
In the last few years, I’ve noticed my television watching has changed. I no longer watch shows on an actual television. I either watch on my computer or tablet via Netflix, Hulu or on “the go” via my cable provider. With today’s demanding schedule, I have little to no time to watch a show when it actually airs. I prefer this method as it is convenient. Many of my friends feel similarly. Plus, Hulu and Netflix offer great pricing compared to the actual cable bill.
Apparently millions of consumers feel the same way that I do. In 2013, 1.8 million people unsubscribed from cable television. Now, this could be a combination of willing and unwilling customers. However, it is a figure that should be analyzed.
So what is at jeopardy? Ad dollars of course! In 2014, cable TV providers received $12 billion on advertisements aired on TV dramas in 2013. In addition, these gigantic broadcasting companies collected $6 billion advertising dollars from news and sitcom programs. If Netflix and Hulu are taking away customers, they will also take advertisers with them. And this could affect the bottom line for cable providers. Commercial advertisements are how millions of companies communicate to consumers on a daily basis. This could lead to new and more creative methods of advertising; like the smart shirt I discussed in my last post.
But then again, I prefer to watch shows on Netflix and Hulu due to the commercial free segments in most cases. So the advertisers following suit on these mediums could lead to the development of another medium. And with today’s need for new, it is only a matter of time before another competitor enters the ring.