Doug Garnett’s Blog


The Unspoken Costs of TV Over the Internet…

The following article in the NY Times suggests that so-called “free” internet services are anything but free (click here). Why? Because there’s always a cost. And on the internet, what we get for “free” often costs significant time and frustration. And this is what the author finds as he views all his TV shows online.

In fact, this is a great area to sit and think. Because so many activities on the web consume time. How many hours does it take to schedule business trips online? A lot. Would I be better off paying an agent to just make the reservations? Not necessarily. I travel so much that I am quite picky about flights. But it’s worth remembering that a $25 or $35 fee to an agent is small compared with my losing an hour or more finding flights. And I have generally found that agents have access to some very low cost alternatives that I don’t have. (Of course, I continue to make my own reservations.)

There is another hidden cost that affects online consumers – opportunity cost. That time we spend wading laboriously through online services also costs us lost opportunity. We could be using that time for more productive things – perhaps even thinking about how to better spend our time.

I also think this idea helps clarify one important marketing area. Consider the technology chasm that kills so many products (that jump between the narrow market of early enthusiasts and the first wave of mass purchasers). Time, frustration, and lost opportunity can be perceived as insignificant by the early enthusiasts. But those same costs quickly overwhelm the mass market consumer – leading them to pine (in the case of internet TV) for the simpler days of cable TV’s instant and easy access.

Technology marketers need to become aware of when their early success happens despite these hidden costs. Because early adopters put up with hassle that early majority consumers simply won’t stand. I don’t see many companies who “get” this truth.

Incidentally, this thinking may be important when considering smart phones. Millions and millions sold. But, it’s a lurking long term problem that in another interesting recent NYTimes story we find that the large majority of SmartPhone users aren’t, well, using it much as a Smartphone. Is it possible they don’t get enough benefit in return for the hassle or complication of trying to learn to use them as Smartphones?

In our love for our own advanced technology, it is always wise to take some time to sit back and think more deeply about the unintended results of our work. Because there’s a cost to everything. Its just that not all costs are monetary. But it’s those other costs that may draw the line between market success and failure.

Copyright 2010 – Doug Garnett

Categories:   Big Data and Technology, Business and Strategy, Communication, Digital/On-line, Direct Response, Human Tech, Technology Advertising


  • Posted: July 14, 2010 14:29

    Marcus Turner

    Excellent points. Although I could pay someone to book a business trip, I have never found any agent that could book one as inexpensively as I could. I will admit that wasn't always the case as I have much experience now finding low fares and great hotels at cheap rates.
    • Posted: July 14, 2010 15:12

      Doug Garnett

      Thanks for the thoughts. I like the travel example because it shows the trade off that just happens - because we make our choices instinctively. In fact, I've had agents who had access to bulk purchased seats that were dramatically better than anything I can get online. But for me, as a savvy traveler, I prefer to spend a bit more to get exactly what I want. Some people have observed to me that the choice is how much time to spend vs. how much they're saving. If it takes an extra hour to search for a 10% savings, is that worth it? Regards, Doug