August 19, 2019
Some consumers who binge on Netflix shows and other streaming programs in Ultra HD are beginning to feel the financial pinch. The 4K content quickly eats up users’ data caps — and costs them extra money for more high-speed Internet access. The number of such “power users” has reportedly doubled in the past year, and shows no sign of decreasing as more companies are unveiling new streaming video services. Consumers who watch a lot of video content may have few options except to upgrade to an unlimited data plan.
The Los Angeles Times reports that such an upgraded plan “can double the average $52-a-month Internet bill.” In Q1 2019, four percent of Internet subscribers gobbled through at least one terabyte of data, the limit for AT&T, Comcast and Cox.
OpenVault, which tracks Internet usage among cable subscribers, says the number of power users has doubled from a year ago. “The percentage of subscribers exceeding this level will continue to grow rapidly,” said company founder Mark Trudeau.
Data limits in the cable industry are “less understood and more controversial” than those for cellphones. Ten years ago, “Time Warner Cable dropped a plan to limit customers’ Internet use after a public outcry … [and] Charter Communications, which sells Internet under the Spectrum brand, agreed in 2016 not to implement limits for at least seven years.”
Cable executives, who prefer to call them “data plans” rather than “data caps,” find the new revenue stream has “helped counter the loss of pay-TV revenue from cord-cutting.” “Our customers’ demand for speed and data usage keeps increasing,” said Comcast chief executive Brian Roberts. At Altice USA, the top 10 percent of subscribers “consumed close to 1 terabyte of data per month and had an average of 30 devices connected to the Internet.”
MoffettNathanson analyst Craig Moffett noted that all this usage is helping cable executives “convince Wall Street that ultra-fast 5G wireless services on the way from AT&T and Verizon Communications aren’t a threat.” “As long as usage is 20 times higher for the wired connection, people aren’t going to substitute it for wireless,” he added. The number of consumers willing to pay for higher data caps is still minuscule.
At Cable One, which serves 21 states, about 10 percent of total subscribers shells out $40 more each month for unlimited data. Cox reported that two percent of their customers opt for unlimited data.
Comcast “gives customers who go over the limit two months free before charging $10 for added blocks of data … [and] subscribers can also buy unlimited Internet for an extra $50 a month.” Still, Comcast spokesman Charlie Douglas said that only a “very small percentage” top the limit, which was raised to one terabyte from 300 gigabytes in 2016.