Even though everybody sort of assumes that in some future time, when consumers can buy video content channel by channel, if not program by program, most consumers will save money. That might not be the case.
Bandwidth consumption that today is bundled into the cost of the entertainment video subscription will become disaggregated. Users will pay separately for Internet access and content. And that might mean users pay more for Internet access, as well as more for their content.
Assume a one-hour TV show streamed to a TV requires 1GB at standard definition, and 2 GB, for an hour of HDTV. Assume you are a typical users and consume five hours of video a day. Assume half your consumption if HDTV and half is standard definition.
That implies 75 hours of standard definition TV consumed per person, per month. At 1 GB per hour, that’s 75 GB of data. The 75 hours of HDTV represent 150 GB of data consumption, for a total of about 225 GB of data consumption a month, for linear entertainment television.
For those of you who believe you could save money someday by buying only the channels you want online, and assuming there is only one person in your household, the cost of watching TV would include the cost of your bandwidth and the cost of your subscription or subscriptions.
That might not be an issue for a single-person household with a monthly usage allowance of 300 GB. Assume the monthly cost is about $70 for such a plan.
The math gets trickier for multiple-person households, especially if many users are watching different programs. But assume 300 GB will do.
Assume a household now pays $120 a month for Internet access and video entertainment service.
Assume the TV service is dropped, in favor of buying online alternatives. If there was a bundled plan discount, and that is lost, assume the household pays $75 a month for Internet access (300 GB), and then buys five channels costing $12 each. That implies $60 for the five channels, plus $75 for the access, for a total of $135 a month.
Surprise, surprise. You wind up paying more than you used for, for just five channels of video and Internet access.
The economics become worse as you add more channels, or if multiple users or higher viewing mean you need to buy more bandwidth, at about $10 per gigabyte.
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