Video gaining speed, Canadians maybe the first to bleed money.
Video over the internet gaining in popularity; with a huge marketing push of course, just as broadband providers start to implement caps of various kinds. The common argument it that this will ensure that those who use the web the most pay more while those who don’t get a fair deal.
On the surface that makes a lot of sense and if there wasn’t this continual push for people to want their video over the Internet there wouldn’t be much of a problem with the idea of caps. The problem is; and I have been saying this for a long time now, all that video takes bandwidth. It takes bandwidth that you aren’t expecting it to because none of these providers are coming right out and telling you it will.
Instead they use marginally misleading terms like streaming when in fact you are downloading that video. The streaming part comes in because what you are really doing is downloading the video file at such a pace that the software can play it at the same time.
So as great as something like Netflix, or Hulu, or any video service is it is also going to be a subscriber’s biggest hit against bandwidth or download caps. This is going to lead to people suddenly finding themselves being slapped with overage charges and not understanding where they are coming from.
In Canada this is going to be a very expensive proposition for the consumer. We already pay some of the highest wireless rates in the world but along with that we have some of the most anti-consumer caps in place; both for wireless and wired access.
In a recent study by Credit Suisse analyst Spencer Wang, dubbed Project Canada, they wanted to find out what affect “consumption pricing” would have. Now the US doesn’t have this pay for what you use type of pricing with their providers but that is changing so consider this a possible lesson for your future.
For the study Wang tested Netflx Canada streaming service of Rogers, a primary provider in Canada, cable system and this is what they found:
Not surprisingly, our case study finds that an [over-the-top] service like Netflix can lead to a material increase in broadband data usage–in this case roughly 20 gigabytes of data for the month or roughly 1 GB per hour of standard definition online viewing. Based on Rogers Communications’ data pricing structure, this would have resulted in a $12 per month increase in broadband for our test home. To offset this, the household would need to trade down to a lower subscription video package, at the expense of fewer linear channels.
What people are failing to realize is that with all this video that has to be downloaded … err … streamed …. is that these files are extremely big. So when I hear companies extolling the virtue of stream HD to your mobile device, or even your home screen, I laugh because I know the exective at the cable and wireless companies are just rubbing their hands together and high-fiving each other and you her cha-ching, cha-ching going off in the background.
To give you an idea, a very basic and simple idea of just what you are looking at. I do a lot of video work over at WinExtra where a single 15 minute video show can end up being a 500MB file. That is just a 15 minute show of YouTube HD quality. A 30 minute Daily Brief show can end up being a 1.2GB file that ends up getting streamed.
Remember that for a second – 1.2GB for 30 minutes.
I know from experience that a one hour television, which actually works out to about 35 to 40 minutes, of HD quality can range around the 1 GB mark. A movie of 90 minutes can reach sizes of over 3GB to 4GB depending on the quality.
Now let’s just take a look at Rogers’ competition – Bell and their average 25GB per month cap. If you had this type of account you would be limited to less than 25 television shows in a month from Netflix and you haven’t even watched a movie yet or downloaded any music you bought.
Of course all these companies want you to hop on the video bandwagon because they are going to make a bloody fortune, especially once people start seeing overages show up on their bills.
Right now I’m not overly concerned when it comes to my bills because I’m lucky enough to still be on an old unlimited plan but if I ever want to move to fibre when it comes available, or move to cable I’ll be in the same boat as everyone else – watching my bill so I don’t go over.
What a wonderful way to enjoy your Internet.