Friday, April 17, 2009

Peer Pressure Works! Time Warner Cable Drops Plans to Penalize Heavy Internet Usage with Tiered Pricing

Wow, within days of announcing its plans to charge up to $150 for heavy broadband usage (as part of a new tiered pricing strategy essentially penalizing such usage), Time Warner Cable has dropped those plans (at least for now)!  

Why?  Ever since the announcement, the company's proposed "consumption" model of pricing has been slammed by consumer advocates, net neutrality advocates, and all the way to the halls of Congress.  I too recently chimed in on the subject, offering my perspective about Time Warner's underlying core motivation for its now failed plans -- i.e., to preserve a "walled garden/fixed channel" world of TV programming on the Internet (IPTV) in the face of the growing reality of open choice-driven Internet TV (and the growing threat Internet TV, such as Hulu and YouTube, pose to cable's business model).

Peer pressure is alive and well ... and sometimes achieves the right result.

(Speaking of Hulu and YouTube, I specifically mention Hulu first in this post, because YouTube -- the GIANT in the industry with billions of users served -- wants to be more like Hulu now (quite incredibly really, after no one gave Hulu a chance when it first launched a little over one year ago).  YouTube, as huge as it is, hasn't found a way yet to make money from its singing dog videos.  Hulu, on the other hand, garners significantly higher ad rates due to its exclusive focus on premiere TV programming.  Well, YouTube wants to be like Hulu now - at least in part for that precise reason.  Today, YouTube unveils its new Hulu-like "broadcast TV" section.  Read more about it here.  But, the TV content providers are the folks behind Hulu -- NBC Universal, News Corp. and soon Disney as well.  YouTube has no such luck -- and always has been seen as a threat to those that produce TV.  In other words, there is no love lost there.  Advantage Hulu ... major advantage Hulu.  YouTube will have a much tougher time negotiating rights to distribute a compelling selection of TV programming.)