Most of us know what an MVNO is. For those who don’t, an MVNO is a Mobile Virtual Network Operator – a company that doesn’t known any mobile phone network of it’s own, but piggybacks on someone else’s network and simply puts their own branding on top of it. US MVNOs that I am aware of are FreedomPop, Boost Mobile and Cricket Wireless. They all resell AT&T or Sprint’s network under their own labels. This is a good business because it fosters competition while still providing best-in-class facilities to consumers. Of course, the profits of the MVNOs go in part to the parent Network Operator, because they are essentially leasing out their network to these smaller companies.
We’ve looked at online music streaming companies as libraries of music. In our minds, Spotify, Rdio, Pandora and Google Play are subscription services where users pay a monthly fee to listen to any music in the entire collection, instead of buying the music personally. Of course, the trade-off is that you never own the music, no matter how long you pay for the service. Thus, the ‘library’ analogy works and we tend to think of these services as places to ‘borrow’ music. Obviously, since we’re ‘borrowing’ music, we’re not paying full price for it and so the music industry has this big complaint that streaming doesn’t pay the bills. That makes sense. Where they were selling CDs at ridiculous profit margins and the only ‘free music’ people ever heard was on the radio, record labels are now contending with super cheap single-song sales and even cheaper streaming services.