Time Warner Cable is changing the way some people pay for cable. On Thursday Time Warner will start to test a service that charges customers of high-speed Internet service based on their usage.
Subscribers in Beaumont, Texas, will be charged $1 per gigabyte above monthly allowances, a company spokesman told Reuters. Consumers in the test region will be offered several levels of service, and if they stay in it, they stay within the contract, no additional charges (similar to cell phone plans).
A $29.95 per month plan for 768 kilobits per second and a 5 gigabyte limit would let users send and receive about 349,525 e-mails, play 170 hours of online games, or download 1,383 digital songs per month. Or there is a $54.90 monthly fee for a 15-megabit-per-second service and a 40 gigabyte monthly limit would allow subscribers to watch 124 hours of standard-definition videos or download 11,070 songs.
The new policy is intended to address the top 5 percent of users, who have spent a “disproportionate” amount of time on Time Warner Cable’s network, a company spokesman said. These people are “taxing the infrastructure,” the spokesman continued. “In order to make investments in the infrastructure, we have to find the revenue to pay for it.”
Now, I understand that business models change. But, how do you roll this out? We constantly find ourselves looking for ways to make more money and squeeze more out of the customers we already have, but this will be interesting to see how many customers Time Warner loses because of the restrictions implemented.
We find similar problems throughout the Internet, and for me, especially in regards to online publishing. Many users feel that everything online should be free, especially if it started free. If you were required to pay $1 to read each news article written online, most people would leave before even seeing its content. But with skyrocketing paper, printing and mailing costs, magazine publishers are searching for additional ways to make money.
The one catch I foresee is that people will not pay for it.
Good luck Time Warner. (Oh, I should have mentioned this earlier. Look what happened to AOL. They used to hand out these discs with hours of Internet access on them.)
*This blog was written by guest and former student Ryan Kline
><(("> Scott Baxley
Scott is a ><(("> Team member at Catch Your Limit, a management firm with offices in Tallahassee, FL and Richmond, VA. To learn more, visit www.catchyourlimit.com.