Internet VOD and Live Events Could Get Expensive

Associated Press is reporting that Time Warner is trying out metered Internet with overage charges of $1 per Gigabyte.  This mean users of Xbox Live Video Market Place, Amazon Unboxed, and others could end up paying an additional $2 per episode for SD content and $6 for HD Content.

5% of Internet users account for 50% of total bandwidth used. And while this is disproportionate now, as Internet Video matures it is likely 5% of Internet Users using large file services to 25% in the next two years, which would result in a 400% increase in network utilization.

Currently networks can be oversubscribed by quite a bit.  A typical carrier with have 1/80th the Internet capacity of the "on network capacity".

To entice users to Internet service plans, providers are going to have to start looking for value adds which can be provided with out leaving the walled garden, and differentiate themselves from their competition. Google has already started created peering relationships, but other providers are likely to follow.

Similar to the AOL vs Compuserve days the new Internet Model will be about who has what added features or allows for unlimited access to certain domains that doesn’t count against your bandwidth quota.