Reply To: 15 Feb 14 – How do you feel about the Comcast-Time Warner Cable merger?
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I agree with all the other comments.
It’s not that Netflix itself is getting something for free, rather Netflix users don’t fit the assumptions their internet providers made about data usage. Even though we’ve never explicitly paid for data, there was always a hidden assumption that we’d use the full speed of our connections for less than a tenth of a percent of the time. That allowed internet providers to squeeze thousands of users onto a modest upstream connection.
Since streaming is more of a continuous usage, internet providers must pay for a much faster upstream connection (more data) to handle the consolidated traffic. Since their costs have increased, it’s the internet providers’ responsibility to figure out how to pass those costs onto customers. One fair way to do that is to charge per usage.
As someone else mentioned though, any time you change the pricing method it’s a prime opportunity for a price increase. Those of you who frequent the Wegmans chicken wing bar might remember when it was priced per quantity. When we switched to per weight, the price jumped because we knew it would be difficult for customers to compare with the old price.