Streaming fees may hurt mobile video demand


In the battle over spectrum for wireless broadband, the elephant in the room is the amount necessary to get video from the provider to the consumer on a one-to-one basis. But if providers start assessing streaming charges and/or capping usage before assessing charges, the demand for the service may well drop off, rendering a major spectrum grab unnecessary. A look at the future facing Netflix may be instructive.

A Washington Post report notes that the practice of charging consumers for their bandwidth use is already in place. AT&T and Verizon do it for mobile streaming and Comcast is starting to do it over its wires.

ISPs say that the practice is necessary, since the biggest video streamers slow the system down for everybody.
Observers note that it cannot help but dampen video streaming, as consumers are forced to keep an eye on their usage to avoid paying penalties or increased fees.

Netflix is well known to be one of the biggest bandwidth users in the US, and the problem is only going to get worse as its movie-delivery service shifts rapidly from good old-fashioned snail mail to internet downloading. The company says that three quarters of its new customers are getting internet-only service, and they are about to have a head-on collision with increased streaming fees.

The wire-based caps are not considered to be as much of a problem as those associated with mobile streaming.

RBR-TVBR observation: As a nation, how much are we willing to invest so that some video-addicted consumers can use their smartphone at their convenience to watch a cat fall off a TV? For starters, there will be fewer TVs for the cat to fall from. But really, wouldn’t it be better if the smartphone had a TV and an FM chip so that the consumer can stay connected when there is a civic emergency and the phone part of the smartphone is disabled?