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(SFGate.com) The days of watching movies on the cheap via the Web may soon be over.
Time Warner Cable and U.S. pay-TV companies, weighing how to profit from surging Internet demand spurred by Netflix and Hulu, are on the verge of instituting new fees on Web-access customers who use the most data.
At least one major cable operator will institute usage-based billing next year, predicts Craig Moffett, an analyst with Sanford C. Bernstein & Co. in New York. He said Cox Communications, Charter Communications or Time Warner Cable may be first to charge Web-access customers for the amount of data they consume, not just transmission speed.
"As more video shifts to the Web, the cable operators will inevitably align their pricing models," Moffett said. "With the right usage-based pricing plan, they can embrace the transition instead of resisting it."
U.S. providers have weighed usage-based plans for years as a way to squeeze more profit from Web access, and to counter slowing growth and rising program costs in the TV business. While customer complaints hampered earlier attempts, pay-TV companies are testing usage caps and price structures that point to the advent of permanent fees.
According to media researcher SNL Kagan, about 12.1 million U.S. households will receive TV shows and movies from Internet services rather than a traditional pay TV provider by 2015, up from 2.5 million homes at the end of 2010.
Cable's best option is to find ways to profit from the online shift, said Moffett. If the companies were to lose all of their video customers, the revenue decline would be more than offset by a lower programming fees and set-top box spending.
"In the end, it will be the best thing that ever happened to the cable industry," Moffett said. Read full story at SFGate.com...
