Commentary

Cable Operators Should Be Consistent About Pay-Per-Use Plans

by Wayne Friedman , Staff Writer, June 3, 2009

If Time Warner wants to charge for the bandwidth I use from the Internet -- eliminating the all-you-can-eat monthly price -- why not consider this arrangement for traditional TV monthly packages as well?

Cable/Internet services are trying to figure out ways to pay for future expanded operations by proposing charging a higher price tag for those Internet hogs who spend tens of gigabytes downloading movies per month.

Why doesn't Time Warner then apply this theory to one of its main entertainment/communication products? If I spend only three hours a week in total watching TV, why should I be charged the same price as the hoarder TV user who's fixated on the screen for 20 hours a week?

Sure, TV delivery operations doesn't work exactly the same way as Internet delivery operations. The problem is, Time Warner can't have it both ways. Whatever time the average consumer uses for each entertainment/communication device, charge them as such.

Time Warner's proposed Internet plans don't make sense against consumers' arguments for a la carte cable programming packages: Why should I have to pay for 600 channels when I only watch seven networks?

This comes at a time many TV network/publishers are considering altering their initial free, advertising-supported Internet ventures to one where consumers have to pay for content..

Hulu has already launched a subscription service for its growing array of TV shows. Traditional newspaper publishers are also considering subscription services, believing real journalism will be worth more on the Net amidst an ever increasing sea of less-valuable blogging info.

Cable operators -- who are also Internet operators -- should be consistent. If they don't want to be the all-you-can-eat-restaurants anymore, that tactic should apply to the appetizers and desserts as well as the main courses.

5 comments about "Cable Operators Should Be Consistent About Pay-Per-Use Plans ".

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Douglas Ferguson from College of Charleston, June 3, 2009 at 1:46 p.m.
Perfect. I agree wholeheartedly.
While we're at it, why are text messages (which consume far less bandwidth than a voice call) considered a premium cell phone service? Answer: Because most are willing to pay for them.
Media companies are only trying to maximize revenue.
As for a la carte, I agree it's more fair to Grandma, who involuntarily pays about $2.50 per month for ESPN which she never watches. But how much MORE will cable cost all you male viewers out there if the [immense] ESPN cost is divided among fewer people? Don't be so sure you'll save money with a la carte.
Reply

Jeff Pugel from Essex Digital Platform, June 3, 2009 at 1:54 p.m.

The reason is simple, because charging on an as-consumed basis for broadcast would be be convenient for their revenue stream. Charging on an as-consumed basis for broadband is convenient for their revenue stream.

As I always say, just follow the money trail and you'll get the true answer.

Dean Collins from Cognation Inc, June 3, 2009 at 1:59 p.m.

ha ha classic. I love this argument, thanks for this post.

Paula Lynn from Who Else Unlimited, June 3, 2009 at 2:17 p.m.

I, too, would like not to have to pay for channels I never ever watch. However, I cannot see an economic bonus for the consumer in the near future. But I can see more billing nightmares.

Kevin Barry, June 3, 2009 at 3:08 p.m.

One of the commenters above says charging on an as-consumed basis is convenient for their revenue stream. That ISN'T the reason. High bandwidth consumers of Internet use more of a system's capacity at the time they are downloading big files. However, no matter how much linear TV you're watching, the program streams of tv channels are zipping down the cable system at the same rate for all consumers at the same time. CNN "passes" my set top box 24/7, whether or not I tune in. However, if I choose to download a hi-def video file, I will be using more bandwidth (a finite resource) than my neighbor.
I'm not defending the bandwidth cap. I think it's a dumb, consumer-hostile idea. However, your argument here, no matter how popular with people who don't really understand system architecture, is facile.