What If Usage Fees Applied To Traditional Show Watching?

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.





2 comments about "What If Usage Fees Applied To Traditional Show Watching? ".
Check to receive email when comments are posted.
  1. Michael Kaplan from Blue Sky Creative, April 17, 2012 at 6:13 p.m.

    Can't WAIT for a la carte pricing! If a lot of second- and third-tier networks can't sustain themselves because no one is watching, then give the bandwidth to another channel.

    Niche channels will then have to charge more than mainstream channels -- but the hard-core audience will gladly pay for it. This, incidentally, is how magazines have long been published.

    Back in the 1980s, I worked for an obscure film magazine (Cinefantastique) that used to charge $4 an issue at a time when virtually every other magazine cost no more than a buck or so. We didn't have that many readers, but the magazine sustained itself. Today, Communication Arts charges upwards of $40 a year for a subscription. Trade magazines and financial newsletters can charge hundreds of dollars a year, and up.

    Personally, I'm tired of spending $5 a month or more for sports channels that I don't watch. Ever. Frankly, I'm tired of having to subsidize what I feel are outrageous pro sports salaries. On the contrary, I wouldn't mind spending $99 a year on the Joss Whedon channel if it meant another season of Buffy, Angel, Firefly, or Dollhouse.

    For that matter, I'd spend $25-$50 for a season-long "subscription" to shows I love, but that have too limited appeal (or too high an IQ) for the networks. The subscription might come with a free DVD of the season's shows at the end, so you'd be investing in the show as much as anything.

    It would drastically shake up television as we know it. But don't you think it needs a little shaking up?

    P.S. The Food Network and ESPN will do just fine under this system...

  2. Carolyn Hansen from Hacker Group, April 18, 2012 at 10:42 a.m.

    I'm with Michael Kaplan -- in fact, I'm already there. I use the Internet for my TV and I buy the shows I watch from Amazon, willingly. I got tired of having to watch the same two commercials five times per show with Hulu.

Next story loading loading..