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Brandon Eshman, Nielsen Online
If you think the internet can support unlimited content and you’ve been enjoying your all-you-can-eat web surfing… just wait. At the same time that consumers are increasing their use of the internet to view content at their convenience, some cable companies and ISPs are setting limits on how much content you can access in any given month – or risk paying a penalty for going over the limit the same way your phone company budgets your anytime minutes.
Comcast has levied a 250-gigabyte cap on its users, (that’s about 120 full-length standard definition movies or 65,000 songs). Time Warner Cable has a program of bandwidth caps that lets customers choose from several levels, ranging from 5GB to 40GB at prices that range from $29.95 to $54.90 a month, with the possibility of a 100GB tier in the future. Verizon’s FiOS service has said it has no immediate plan to cap bandwidth usage.
This boom in video streaming is just getting started. Case in point: the uber-growth of Hulu. Unique viewers to that site alone have increased just over five-fold from February 2008 to February 2009. From September 2008 through February 2009, unique viewers have grown 49%, while the time spent viewing has risen 54% (from 114.7 minutes to 176.9 minutes).
Not only are more consumers viewing video content, but they tend to spend increasingly more time on the numerous outlets (iTunes, Netflix, Xbox 360) consumers have for accessing content. YouTube has also just begun offering full-length TV shows and movies at youtube.com/shows.
Cable companies have a right to control their pipes as they wish, but smaller, more cost-effective caps may have a real effect on how not only individuals consume content, but also families with media-hungry kids and teens. Lower caps increasingly come in to play as the premise of caps move away from individual usage to combined usage as habits of downloading movies, video, music, and so on may change given the fear of overage costs, especially as personal and household budgets tighten.
At this point, it appears consumers are not yet willing to accept bandwidth caps. Responding to consumer and political social media buzz, Time Warner Cable announced that it would halt current expansion plans for caps in additional cities.
How much extra will you as a consumer be willing to pay to see, read, watch or play something over the Internet? Will you change your viewing/consumption habits before you change what you pay for internet access?
Time Warner offers 5GB an month!? That’s not even close to one HD movie download and average internet use would gobble that up in no time. So you mean to tell me, if I had that plan, and downloaded one HD movie off the Playstation Network, I would not just be out of bandwidth, I would be over by almost double!? Are they insane? That’s not even reasonable!
The bandwidth cap is nothing more than a means of stifling competition, If people can watch tv over their internet connection for free they will be less willing to pay the ever increasing and frankly outrageous costs of cable packages. The cable industry’s answer is not of course to lower pricing or offer a-la-cart serivices but simply to increase the cost of their internet offerings to make sure its too expensive to use them for tv.
i agree this last comment. I think their goal is to increase the costs
While I am not a fan of bandwidth caps, if TW is going to do it, the true incremental costs of service must be reflected. This is a *fraction* of the amounts they have published.
All TW is doing when they put these ridiculous ideas out there is giving AT&T another argument for customers to switch to U-Verse.
Rick I agree that extremely low caps will facilitate the process of customers using substitute products or switching to competitive options offering much larger, or no caps at all(FiOS currently). FiOS’ fiber network, though relatively small, is growing in popularity and will increasingly become attractive to customers in cities covered by its expansion footprint.
The internet is affecting content delivery models across the board. Newspapers are/have been dying, video is now increasingly moving from the cable tubes to the internet in the same fashion, and the delivery for gaming is following similar trends.
Yes the internet allows for information and content to be consumed near instantaneously, and by a huge audience, but its the convenience that consumers value. People are busier than ever and the internet allows them to get the content they want, whenever they want.
The growth in online video is just one example of the many online delivery platforms that will continue to grow and affect bandwidth consumption.
A cap on usage, just the idea of it, infuriates me. I am a freelance artist who works from home, all my clients/publishers are many states away. The only way I send finished work to them is through ftp, and often the files get quite large. I can’t afford to start paying premiums on this.
[...] one caught me completely by surprise. This Neilson Report talks about how certain US cable companies have placed bandwidth caps on the total amount of data [...]
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