Imagine if TV distributors started to charge consumers “usage fees” for watching TV shows -- live, time-shifted or whatever.
Comcast levies “data use” caps for some apps, but not for its Xfinity Xbox app. Reed Hastings, chief executive officer of Netflix, says this means Comcast “no longer [is] following net neutrality principles.”
Forget for a moment what Hastings sees as a big inequity: Comcast’s imposition of a “data usage” cap on Netflix’s app.
Imagine if some of this thinking applied to the bigger traditional TV platform. What if you watched 15 shows a week, but your neighbor – who has a lot of time on his hands – logs in 40 shows?
Say you both have the same TV distributor. But that distributor has a usage thing going -- and your neighbor’s shows amount to 40 gigabytes, and your TV time spent comes to 15 gigabytes.
Should both of you pay the same amount? And while you think about that, think about other consumer price points -- like putting gas in your tank.
This is where the proposed so-called “a la carte” cable network purchasing strategy -- which would make consumers pay for only the channels they get -- comes in. But it goes farther. Because in the digital world, channels matter less -- while programs, the specific videos, are key;
Consumers don’t really think about this much apart from iTunes. Like cable, satellite, and telco operators, the Hulus and Netflixes of the world have all-you-can-eat monthly plans – for $7.99, $8.99 or whatever.
If “usage” plans applied to traditional TV, trouble for all kinds of would break loose –-- for ESPN, if say you don’t watch sports; or Food Network, if say you aren’t at all interested in food TV programming.
National advertisers would be in a panic. If cable channels -- or their programs -- no longer had 85% or 95% penetration of U.S. TV homes, if they had say 55% or 45% penetration, this would mightily upset the TV apple cart.
We all know there are bigger financial and economic considerations that make the current traditional TV system work the way it does.
But that system is being pushed around for big change.