Have you been feeling a bit overwhelmed recently with a feature-rich mobile smartphone? You’re not alone. As media consumption on mobile devices increases, you derive less pleasure. It’s an economics law called diminishing marginal utility.
Basically, the law claims that people become more dissatisfied as they consume more of a product or service. Investopedia uses an “all you can eat” buffet restaurant” as an example:
“… say you go to a buffet and the first plate of food you eat is very good. On a scale of ten you would give it a ten. Now your hunger has been somewhat tamed, but you get another full plate of food. Since you’re not as hungry, your enjoyment rates at a seven at best. Most people would stop before their utility drops even more, but say you go back to eat a third full plate of food and your utility drops even more to a three. If you kept eating, you would eventually reach a point at which your eating makes you sick, providing dissatisfaction, or ’dis-utility.’”
The same is true of mobile smartphone media consumption.
Media Consumption Rises – Satisfaction Falls
As mobile smartphone owners gobble up more content, their perceived utility (or quality) of the content drops. While quality is partially based on mobile device type, media content quantity determines utility or satisfaction.
Surprised? Remember watching your first YouTube video on a mobile phone. You probably enjoyed it. Now think about the last few YouTube videos you’ve seen. Were you as satisfied? Probably not because you over-consumed. You came back for seconds and thirds like the buffet restaurant customers. That’s why in the early days of YouTube, it was easier for someone’s video to go viral. Now everyone’s expectations of quality has risen because we’ve over-consumed.
When the carriers began offering unlimited data plans, especially after release of the iPhone, few understood iPhone user behavior. Then AT&T realized that iPhone mobile smartphone customers were consuming 40% of total network bandwidth. iPhone folks became the third and fourth plate buffet restaurant customers, surfing the Web, watching YouTube videos and streaming Pandora Internet Radio.
Now that Android phone penetration exceeds the iPhone, all four major U.S. carriers are experiencing rapid increases in network usage, primarily due to consumer demand for streaming multimedia. In other words, the Android folks are also enjoying returning for seconds and thirds at the buffet restaurant. Diminishing marginal utility.
Mobile Smartphone App Growth Explodes
When mobile phones only offered basic software for making phone calls, texting and accessing WAP sites, data overhead and media consumption were very low. Now Mobile smartphone users launch apps–news and information, social networking, games and utilities–which use enormous amounts of data. They’re now 250,000 Apple, 95,000 Android and 10,000 BlackBerry apps. Yet the average phone user only installs and keeps between 25-30.
Similar to the YouTube example, however, diminishing marginal utility (quality) applies to smartphone app users too. The Android market is a good example. Many feature phone customers have recently switched to the new OS and started downloading dozens of mobile apps. As consumption (quantity) rises, perceived value drops. Android phone users are eating at the same buffet restaurant and returning for third and fourth plates.
So the raging “more apps, the better” is clearly wrong. If it were true, every mobile smartphone user would load and keep dozens of apps and marginal utility would rise.
To prevent diminished marginal utility, mobile users should reduce overall media consumption.