Netflix (NASDAQ:NFLX), Hulu (NASDAQMCSA) (NYSEIS) and other web-access users may soon see an increase in their cable bills. Time Warner Cable (NYSE:TWC) and other U.S. pay-TV providers such as Cabelvision (NYSEVC) are discussing charging customers who use the Internet the most, a group largely made up of movie streamers.
Craig Moffett, an analyst with Sanford C. Bernstein & Co. in New York, predicts that at least one major cable company will institute the new “usage-based billing” next year, saying that it would most likely be Charter Communications (NASDAQHTR) or Time Warner Cable. These fees would charge customers for the amount of data that they use versus current charges based on transmission speed.
Bloomberg quoted Time Warner Cable Chief Strategy Officer Peter Stern who said, “We’re basically a broadband provider. As a convenience for our customers, we package and distribute television and provide service around that.”
Cable providers have been considering this usage-based fee structure in the past but were deterred by consumer resistance. The cable industry has been looking for ways to capitalize on the growing movie streaming demand to help counter the increasing cost of programming and slowing company growth. Usage-based pricing would also help to deter customers from using Internet video streaming, which is a source of competition for traditional cable.
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