Telus recently started offering porn on their cell-phones. [I wrote about it in a post that went up only this morning. I confess, I did write the post a few days ago, knowing this was a busy week. Sigh... ]
Telus expected some push-back from customers about the announcement, but thought it would go away. They clearly intended to ride it out. It didn't go away.
After enduring a few weeks of customer complaints on the topic, as well as a church-led boycott threat, the company has now said that it will back away from this revenue stream.
"Faced with snowballing complaints from both consumers and corporate subscribers, along with a very public rebuke from the Roman Catholic archbishop of Vancouver, Telus chief executive officer Darren Entwistle bowed to the pressure on Monday. In an hour-long call, a handful of Telus executives, including Ms. Yale and Mr. Entwistle, discussed the logistics, including timing and a communications plan." (Globe & Mail, see references)
Not everyone thinks backing away was a good idea. Russell Smith, for example, a columnist for the Globe & Mail, said
"So Telus caved. It chickened out. It succumbed to the dumbest kind of knee-jerk provincial sanctimony about the transmission of sexual images on cellphones, a piety that was ill-informed at best. On Tuesday it announced that it was backing down from its plan to sell tame soft-core pictures and movies through its cellphones. I have no idea what the fuss was about to start with."
Smith makes the point that there is lots of porn on the web already (and already available by cellphone with a web browser), on TV, on satellite, and in hotels. In fact, it appears that Telus saw the opportunity to be a content provider because they could see the trend of their customers downloading porn to the cell-phones from other content providers. So why not Telus as well, right?
Nevertheless, the company backed off because of customer concerns.
My take:
Telus understood this a business decision that was not about brand. That was a mistake. They have a brand people care about and LIKE. People like the cuddly animals, they like the advertising, they like the slogan "The future is friendly". [Note, they are not my client, this is my opinion only]
I believe people felt this action was inconsistent with the brand, as well as being less than what they expect from a major national corporation. The porn thing also seems to be at odds with their corporate social responsibility vision statement, assuming that the difference they want to make is a positive one:
"We are committed to becoming Canada's premier corporate citizen by making a difference in the communities where we live, work and serve."
What IS really surprising is that they got caught by surprise. Janet Yale, EVP of Corporate Affairs was quoted in the Globe saying the reaction was unexpected.
"It was a business decision that was taken in an informed and careful way," she said, conceding that it was "the nature of the reaction that we didn't anticipate." (Globe, see reference below)
This was an innovation that did not work. I'm impressed that they responded to the problem pretty quickly. I'm a bit surprised that they didn't conduct brand-impact research -- or if they did, surprised that it did not generate a response of concern among their customers.
Doing innovative things does mean taking risks. You can reduce these risks if you are careful. But you can't really eliminate the possibility that things may go wrong. They did well to recognize that they'd goofed, and to quickly respond.
References:
"Why Telus ditched its plans to profit from porn" by Catherine McLean, Globe & Mail, Feb 22, 2007 (free for 7 days only)
"No porn on cells? Talk about hypocrisy" by Russell Smith, Globe & Mail, Feb 22, 2007 (not accessible online without a subscription)
