Commentary

As Cord-Cutters Increase, Web Access Could Become Pricier

For the first time ever, cord-cutters outnumbered new subscribers to paid television in the second quarter of this year, according to SNL Kagan.

Overall, the number of paid-TV subscribers plunged by 216,000 in the quarter, down from a gain of 378,000 last year at this time. Cable saw the biggest drops, with 711,000 defecting subscribers. Satellite providers and telecoms gained subscribers, but not enough to offset the decline in cable households.

The reasons seem fairly obvious. As more video has migrated online, people are less inclined to pay for pricey TV subscriptions. Additionally, nearly all TV shows end up on Netflix, enabling people to view ad-free DVDs as often as they like.

But the growth of cord-cutting isn't necessarily good news for all Web users. That's because cable companies and telecoms will almost certainly want to shift to pay-per-byte billing systems, in hopes of recapturing TV-subscription revenue.

Should Internet service providers institute pay-per-byte billing, people who consume video online instead of via cable subscriptions will probably pay more than they currently do, but so will people who use bandwidth for other purposes, such as uploading videos they've created.

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And, while net neutrality rules could prevent ISPs from discriminating against particular types of content or applications, no laws currently would stop cable companies and telecoms from changing their pricing plans to discourage online video watching.

1 comment about "As Cord-Cutters Increase, Web Access Could Become Pricier".
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  1. Lauren Oldham from PHD Australia, August 25, 2010 at 9:13 p.m.

    As a US citizen living and working in Australia where the pay per byte system exists, it would be an absolute tragedy to have the 'unlimited' pipe of internet in the US choked by a new payment system. The growth of the internet would slow and make people hate ads even more as the rich media and video pre-roll take up their data allocations. Video (catch-up tv) is just launching in Australia, but what I've experienced from lack of powerful download speeds and high cost per byte internet packages, it's not been as quickly adopted as advertisers and media agencies would like to see.

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