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May 18, 2006
What value complexity?
Today for some reason I started musing about the market value of complexity. While there is a distinct tendency towards commoditization in certain industries I was also struck by the fact that maybe complexity is introduced to counter-balance falling margins.
Example: Mobile phone plans - the prices for mobile phone calls and data transfers have dropped a lot in the past years - and yet I challenge anyone to completely understand the implications of all the different price plans and rates. New mobile operators with new (and different) price plans seem to be introduced every day. (Actually this thought struck me while walking though the town center of Paderborn today - where there seem to be mobile phone shops on every corner now.)
Example: Cable television - the number of available TV cable channels here in Germany has grown by a large number in the last year. However there are also an increasing number of cable channel options you can now choose from (different pay-channel packages, pay-per-view etc.)
Am I just running a fever or is "complexity" something that comes with increased choice due to increased availability of a particular service or product?
Do industries actually bank on adding complexity in those markets to keep their margins up?
Posted by Matthew at May 18, 2006 07:25 PM
Comments
I think you got that wrong: You're not supposed to call that "complexity", you're supposed to call it "choice". And that's good for the consumer. Allegedly. ;-)
Posted by: Armin at May 18, 2006 09:15 PM
You might enjoy the Google TechTalk The Paradox of Choice":
http://video.google.com/videoplay?docid=6127548813950043200
Posted by: J Aaron Farr at May 19, 2006 12:03 AM
who, me or Matthew? I've read the book, listened to the webcast ages ago, that's why I posted my comment and the smiley at the end.
Posted by: Armin at May 19, 2006 02:45 PM