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.

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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.

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