The cell-phone business has been highly competitive in USA. This new strategy to be used by Virgin Mobile USA will allow customers to get free minutes; they will have to bear with the ads however. Isn't this wonderful? It's like a new job. You can use your free time to earn more minutes for your cell phones. However, this is not the end of the story.
While this might be the result of fierce competition in the communication industry, it is highly unlikely that people will in fact spend so much of their time to earn more minutes unless of course they don't have much work. NY Times reports that a person can earn upto 75 minutes by watching the commercials. However, earning minutes isn't easy. NY Times writes:
The program, called SugarMama, lets people earn one minute of talking time by watching 30-second commercials on a computer or receiving text messages on their phones, then answering questions to prove they were, in fact, paying attention.
So, you cannot get away by watching the ads or receiving text messages either. You will have to answer the questions to prove that you were in fact watching the ads closely. Nonetheless, it gives some options to the people who are running low on minutes.
NY Times reports that Virgin Mobile has signed up 3 advertisers namely Pepsi, Microsoft's Xbox, and a youth antismoking campaign named Truth. However analysts have cast doubts over this new method of operating cell phone business. NY Times writes again:
Telecommunications industry analysts said SugarMama might not hit a sweet spot with consumers or advertisers. Roger Entner, an analyst with Ovum Research, a market research firm, said the kinds of consumers willing to swap their time for airtime were not likely to be big spenders.
"If you're too cheap to buy a minute of air time, how are you going to afford an Xbox?" Mr. Entner said. The people likely to earn minutes for free "are people who want to avoid costs at any cost."
It is true the target group for these sponsor companies may not be those people who would in fact want to earn minutes by spending so much of their time. Hence, after a while, these companies might pull themselves back of the contract.
What do you people think about this? I have doubts over the success of this business. However, you cannot say for sure unless you have done a market research. Customers are likely to get bored and irritated with the ads and the need to answer questions at the end. Only time will tell if the people at the Virgin were truly able to initiate a virgin strategy for success.
(based on Earn Cell phone minutes by watching ads, NY Times,May 30,2006)