Damming The Stream

Benjamin Lennett sees trouble on the horizon for streaming services like Netflix and Pandora:

First, they came for unlimited data on our smartphones. Now capped plans and usage-based pricing are likely coming to a cable provider near you (and indeed, they’re already here for some). The cable industry claims the move is about fairness: a fair return on their investment and fair pricing. But the egalitarian rhetoric is designed to obscure their more self-interested aims: increasing profits and thwarting competition from online video. …

The large cable companies are determined to prevent mass movement to cord-cutting, in which users give up their cable TV subscriptions and substitute with services like Netflix. How do you prevent this from happening? Data caps and usage-based pricing.

He puts the proposed caps in perspective:

How many hours of online video per month could a user watch with Time Warner’s 5 GB capped plan? About five for a high-quality stream, barely two for HD. By comparison, Nielsen estimated that in 2010, the average household watched 143 hours of television a month. Cord cutting families might be in for some very interesting dinner table conversations regarding dividing up the cable data plan.