Download limits and TV

Mark Scott, the Managing Director of the ABC, said something very interesting yesterday at CEDA’s launch of its new collection of paper’s on broadband. He noted that recently, while iinet customers represented about 5 percent of visitors to ABC Online (the ABC’s standard website), they represented 31 percent of users of its iView site that streams video on demand of ABC television.

That is an extraordinary difference but no big mystery. iinet offer a “Media Lounge” to its customers that gives them access to ABC’s iView outside of download limits. Not only that, iTunes Music Store downloads, various radio and sport options and X-box live are all unmetered. Think about what that means? If you watch say 10 TV shows and download 2 movies a month (around 6GB), then you can save yourself $10-$20 a month on iinet with a lower metered cap than other ISPs. Add to that the saving of metering anxiety as you visit those sites and the savings are compelling.

This simple tale has so many implications for the broadband debate in Australia it isn’t funny. First, Australians are big downloaders of illegal TV and movies. iinet’s plans effectively pay people not to download illegally by offering them effective lower internet access charges for doing things legitmately. Ironically, it is iinet who is being singled out by copyright holders accusing them of facilitating illegal downloads.

Second, iinet’s strategy creates a new form of competitive pressure for the largest ISP, BigPond, who have their own unmetered content which is restricted to Windows and, let’s face it, sites that have been far less popular in the market-place.

Third, the ABC site is geared towards streaming and I am told that this is more popular than downloading content and watching them in a buffered mode. As Andrew Odlyzko has recently reminded us, streaming offers very little advantage in consumer experience over downloading but at great cost. This suggests that one implication of higher speed broadband may be to reduce the efficiency by which users consumer high-bandwidth content.

But, finally, when it comes to ABC content, isn’t it extraordinary that despite taxpayers paying for that content, licenses and ABC’s development and web-hosting costs, they have to pay again because for all other ISPs, ABC content is metered? Nowhere in the Government’s discussion of what it is looking for in the National Broadband Tender is there a suggestion that it would be important the government sites and their content be unmetered. When these details become public, it will be interesting to see if any tender has even proposed this. So we may have the amazing situation that we will have a shiny, part-government owned, broadband network who charges its own citizens whenever they want to watch Parliament Question Time online. Hey, I have watched that Question Time recently and I haven’t even seen this been put as a question yet.

This post appeared in Crikey, 4th December 2008.

5 thoughts on “Download limits and TV”

  1. I totally agree. With many plans out there offering rediculously low download limits (1Gb a month and the like) – generally to those individuals new to broadband – it is important that these individuals have equal access to Government online resources.

    Hopefully this is picked up.

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  2. Yes, This is the thin end of the wedge. I believe somewhere in the ABC charter there is a reference to free to air. Using the internet contravenes this as to receive one must purchase a computer, instal a phone line and make monthly payments to one of the many expensive ISPs. All this before one has even contemplated the upload, download costs and streaming factors. This is not my understanding of free to air. More and more content is going this way putting it out of reach of many low income and non techno comfortable people.

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  3. Hi Joshua, great post.

    Hope this isn’t too off-topic, but I have been thinking recently about the increasingly intricate and lenghty video advertisements imbedded in many of the sites browse.

    By watching these ads, are we using a portion of our download limit on a product which we have not requested? Are we, in effect paying, for them?

    Now I understand most broadband users have pretty substantial download quotas, so I guess its more a matter of principle.

    Cheers,
    Alan

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  4. Great to see iiNet unmeter, but unmetering isn’t free for the ISP. They’ve got to either a) be reimbursed by the content supplier they unmeter (eg for a 2gb iTunes movie purchase, iiNet get re-imbursed for 2gb bandwidth use) or b) they’ve got to wear the bandwidth costs themselves.

    My guess is iiNet are wearing the costs themselves. They’re a small ISP and they want a marketing hook. This is it. If they had commercial agreements in place, Optus and Telstra would also have access to those agreements.

    So, they’re absorbing costs until .. it’s no longer economically viable. That is, until they hit a threshold of use that means they can’t provide it anymore. What happens then? I guess it’s leverage to take to the content suppliers to say they’ve no option but to re-cap unless the content suppliers come to the table (ie, we’ve been underwriting your business model of Internet delivery, but now it’s time to turn this into a viable proposition for us).

    So .. it’s great for iiNet to be doing this. But commercial viability of ISPs in a VOD bandwidth era is by no means a given. There’s a lot to be worked out, and once people actually start using VOD services en mass, only then will we see the reality of delivering these services.

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