Higher bandwidth charges could discourage online video and help Hollywood

Hollywood’s hope for Hulu and other legit online video services is that they grow fast, but not too fast. Unless and until the media companies can figure out how to make as much money for content on the Web as they do via traditional means, they’re essentially using online businesses to experiment and play defense against piracy. But if too many people make the switch too fast, the broadcast/cable business model falls apart and, well, the networks and studios are pretty much screwed.

That’s why it’s probably good news for Hollywood, if not necessarily consumers, that cable providers like Time Warner are starting to charge extra for heavy Internet usage. The easiest way to eat up a lot of bandwidth, after all, is to stream or download video. It makes no difference whether it’s illegal piracy or legal viewing from a legit source.

This new pricing move, therefore, is a discouragement to heavy usage of Internet video. Those hurt most are the small but growing group of people who cancel cable or satellite and connect their TV directly to the Internet to access programs.

While networks and studios would rather consumers do that than engage in piracy, they’d still prefer that we subscribe to our cable and watch the greater number of ads they insert into shows on those platforms than on the Web. If ISPs start giving consumers an incentive to do just that, well then all the better.

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