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The days of driving to a movie rental store to pick up a DVD are rapidly coming to an end as Americans are increasingly watching TV and movies on the Internet. Online video usage was up almost 50 percent between 2010 and 2011, according to Nielsen, a company that tracks how many people watch specific television programs.
Netflix has more than 25 million customers in the United States and Canada and recently announced plans to expand its online streaming services to 43 countries across Mexico, the Caribbean and South America.
Data caps increasingly common
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 Data space is eaten up each time you stream music from popular website Pandora. |
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Netflix’s growth pits it against Internet Service Providers, or ISPs, who control the pipes that carry data to and from your home and through wi-fi connections. Both Comcast and AT&T, two of the largest ISPs in the United States, have recently imposed data caps for high-speed Internet subscribers.
The data caps limit the amount of material users can upload and download within a month. The caps don’t limit the amount of time spent on the Internet, just the amount of data exchanged.
For example, someone could read 25 e-mails and not use any of their allotted data cap, but if they download a video e-mail attachment, they would use up data space.
Streaming video from sites like Netflix, Hulu and YouTube, streaming music from Pandora or Grooveshark, playing games online and sharing music, video or photos all eat up the data space allotted under the caps.
Online users and providers squeezed by caps
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A gigabyte is a unit that describes a measurement of data. |
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Data caps are measured in gigabytes (GB), a unit thatdescribes a measurement of data storage space. Streaming an average length high-definition (HD) movie online uses about 3.5 GB.
Internet provider Comcast implemented a data cap of 250 GB per month for its XFINITY Internet service in 2008. AT&T followed suit in 2011, with a cap of 150 GB per month.
Two hour movies on Netflix in HD use around 3.8 total GB, and a 30-minute HD show takes about 1.5 GB. So, streaming about 2 hours of HD television shows every day for a month equals roughly 168 GB of data space.
Therefore, online streaming services like Netflix and Hulu are concerned that data caps may restrict what their customers are able to watch online.
Competing for customers
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Fox is now charging customers to watch new episodes of Glee or The Simpsons online the day after they air on TV. |
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Cable TV and Internet providers, as well as TV networks, are also concerned about the new online landscape. They worry that customers will give up cable service altogether and turn to the Internet for all of their TV viewing, eating away at profits from cable and advertising.
To combat this, some networks are putting up pay walls to force people to pay if they want to watch the previous night’s episode of a show online right away. Fox, for example, just started charging customers to watch new episodes of Glee or The Simpsons online the day after they air on TV.
On the other side of the coin, online streaming services like Netflix and Hulu are developing their own original TV shows to attract customers and strengthen their brand. As the battle for dollars and eyeballs continues, the question is who can convince viewers to pay for content, or convince advertisers to pay for viewers’ time.
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Joplin was able to rise from the ashes because of help from everyone. And I am eternally grateful to anyone who made that possible.
