4 ms·
Pricing is based on what people are willing to pay (value to consumer) and not at all on what the service might cost to provide. Obviously, competition is a fac
by xyzzy123 14y ago
Pricing is based on what people are willing to pay (value to consumer) and not at all on what the service might cost to provide. Obviously, competition is a factor too.
For light users, sending a hundred SMSs a month probably does provide $5 worth of value. For heavy users there are various plans and bundles which will let you send lots rather more cheaply.
I think the way SMS is priced is more of an indicator of how people can ignore small transaction costs when there is zero payment friction. SMS is probably the most successful micropayment system around. Although of course, all the payments go to the telco ;)
- Firehed 14y ago25¢ to receive a message is not something I'm willing to pay; it's something I literally have no way out of if I want a cell phone and don't want to cough up even more for unlimited SMS. AFAIK there's no way to just turn off SMS entirely, which I'd be more than happy to do as I've completely replaced it with various data-based services that I'm also paying for in my monthly bill (email, IM, iMessage, google voice, etc.) Even if I am able to disable SMS completely (without screwing up the parts of my plan that I actually like, at least), it's problematic because of the handful of people that do text me, they'd have no way of knowing that I never got the message (unless the telco would automatically respond on my behalf saying that number can't receive texts; I doubt this is the case). Some SMS-based services don't work with Google Voice and MMS is completely unsupported by it, and there's absolutely no fallback let alone a graceful one.
- mattmaroon 14y agoI dont think so. Hardly anyone in the US pays for texts a la carte, and when they do, they went over their contract allotment and are pissed about it. I don't think hitting people with an unexpected $300 bill at the end of the month because they didn't realize they could have spent $5 more for unlimited plans is a great model for micropayments.
- xyzzy123 14y agoI always wondered how people managed to send, on average, 1 SMS every 4 minutes, for 12 hours a day, every day. I'm not sure I could do that even if someone paid me to. The surprise $300 bills you are talking about, they're teenagers right?
- w1ntermute 14y agoBecause a lot of these texts are "yes", "no", "lol", "hi", etc. They might send 10 such texts in a 30 second period.
- xyzzy123 14y agoYeah I see what you and mattmaroon mean. Thanks. I used SMS a fair bit when it was 20c/NZ a message - but that never seemed to be a big deal for anyone. Interestingly, although running out of prepaid credit was highly inconvenient, it never really lead to people trying to conserve TXTs. As of today I am slightly ashamed to admit that I actually have no idea what an SMS costs me...
- oxide 14y agoBack in the day had a prepaid phone that cost 25c/US to send and receive. I don't miss it.