Unlimited online video add-ons coming to Internet packages, for a fee, report says

U.S. Internet service providers (ISPs) will soon begin charging for more creative “service add-ons” like unlimited video streaming to deal with consumers’ increasing demand for bandwidth, with Canadian providers following suit shortly after, said Stephane Bourque, the president and CEO of Vancouver-based Incognito Software Inc. In a report titled "The Growth of OTT Content: Opportunities and Threats for Service Providers," released Wednesday, Incognito said a survey of ISPs globally found that one-third of North American providers are “planning to adopt the use of service add-ons” in the next 12 months, to respond to consumers’ increasing use of online video services, and the corresponding rise in bandwidth consumption. The report, which did not include responses from any Canadian providers, said add-ons like unlimited video streaming are being deployed in other parts of the world, though they haven’t yet happened in the North American market. “I think the idea here is to find some creative ways in order to alleviate the concerns of the subscriber in terms of, ‘What is going to be counted into my actual monthly package,’” Bourque, the company’s founder, said in a telephone interview. Over-the-top video services like Netflix Inc. have gained in popularity in recent years, driving up bandwidth consumption as more consumers use Internet connections to watch videos. The phenomenon has also led to speculation that an increasing number of consumers will cancel their traditional paid television services in favour of cheaper online alternatives, driving bandwidth consumption further and negatively impacting the revenues of the majority of ISPs that also offer a traditional television service. In addition to responding to consumer needs, Bourque said Internet service add-ons will help ISPs monetize customers’ additional use of bandwidth. He said popular add-ons could include unlimited video consumption, or temporary boosts to download speeds, and could cost between $3 and $20 per month. Once available in the U.S., he said, Canadian ISPs will “absolutely” roll out similar packages in short order, he said. “From our personal experience locally with all the providers we talk to—our customers and those who are not customers—what we see is they seem to be following hand-in-hand what the Americans are doing,” he said. “I would say that they would follow suit relatively at the same time. If it was something not too controversial, they would try it out, yes.” Currently, incumbent service providers including BCE Inc., and Rogers Communications Inc. offer general Internet upgrades such as allowing subscribers to add an unlimited monthly bandwidth option. The cost of that option is typically about $30 month. Bell customers who subscribe to three of the company’s services can add the unlimited bandwidth upgrade for $10 per month, the company’s website says. Independent Canadian ISPs such as TekSavvy Solutions Inc. and Distributel Communications Inc. also offer unlimited Internet packages. Marc Gaudrault, TekSavvy’s CEO, said in a telephone interview Wednesday that unlimited video add-ons could benefit Canadian consumers if all providers are capable of offering them competitively. “To the degree that these things are good for the consumer, I welcome that,” he said. “However, it’s important to make sure that competitors have a similar ability to offer these sort of things.” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Unlimited online video add-ons coming to Internet packages, for a fee, report says

News | 07/31/2013 8:44 pm EDT

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