Is Netflix’s App UPGRADE a Cure for Bandwidth Sticker Shock?
The rising cost of mobile bandwidth has now become a limiting factor for Netflix (NASDAQ:NFLX), preventing subscribers from streaming video on their mobile devices as they would were they not at risk of huge overage fees, or not prevented from doing so by throttling.
As the preponderance of net-connected devices such as smartphones and tablets and their demands for bandwidth puts the infrastructure of cellular providers under severe strain, companies including Verizon (NYSE:VZ) and AT&T (NYSE:T) have been doing their best to wean customers off ‘unlimited data’ plans in favor of tiered ‘data buckets.’
The problem is that a subscriber to such a plan may get a nasty shock on receiving his phone bill due to charges for high volume downloads like videos. Even some ‘unlimited’ services limit download speeds to a very low level after the subscriber hits a maximum download threshold. Video content viewing is simply not possible at these adjusted speeds.
Pending formalization of some kind of revenue-sharing arrangement between itself and the carriers, Netflix has done the next best thing in the circumstances to protect its subscribers from sticker shock for bandwidth – turn it off!
The latest update to its iPhone and iPad apps allows a customer to toggle on and off Internet connectivity via 3G or 4G, and use Wi-Fi instead. The customer therefore makes the tradeoff between everywhere-access and painful phone bills.