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Could smartphone data cap plans hurt Internet radio?

The National Association of Broadcasters is sending around an interesting think piece about Internet/mobile radio. The report was published by the Station Resource Group, a consortium of public media services. It’s titled “The Mobile Internet: A Replacement for Radio?” and is pretty circumspect about the question—pondering the various differences between broadcast and Internet audio streams.

This paragraph caught my eye.

A potentially critical new market variable has entered the picture, with the recent AT&T Wireless announcement that new customers will no longer be offered unlimited flat-rate data service. Although early analysis of the specifics of the new AT&T rate structure shows that most Internet radio users would still fall within the flat-rate zone, the move by AT&T crosses a virtual Rubicon. It is now conceivable that the current rate structure is simply the first step in a gradual throttling down of flat-rate service thresholds, and that if one provider has done so, others may follow. This movement could affect the uptake of wireless Internet radio by future consumers.

AT&T announced its two new data capped plans for the iPhone and other smartphones in June. DataPlus offers 200 megabytes of data for $15 a month. DataPro provides two  gigabytes for $25 a month.

Why might other carriers follow suit?

“Witness the still increasing ‘foreign’ ATM charges that nearly all banks now levy after years of offering such service for free,” the survey notes. “During those years, strong consumer usage patterns were established, and once such behavior was created, the institution of small but incrementally growing fees for continued usage was grudgingly but broadly accepted by consumers.”

It’s an interesting question. AT&T’s DataPro says the plan offers consumers the capacity to watch 200 minutes of streaming video a month, the carrier claims. Streaming audio isn’t mentioned, but obviously that would take up less bandwidth.

Any comments on this out there in Radio Survivor-land? Do data caps make you nervous about tuning into Pandora on your iPhone?

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5 Responses to Could smartphone data cap plans hurt Internet radio?

  1. John Anderson August 30, 2010 at 3:06 pm #

    All I know is this sort of thing is playing hell with my dissertation; i.e., where to situate terrestrial digital radio among the various of “flavors” out there right now.

    Speaking of which: the NAB’s push for FM chips in phones is for *analog* reception, right?

  2. Will_Tucker_FMX August 30, 2010 at 5:42 pm #

    Presuming other wireless carriers follow AT&T and Verizon Wireless’ lead, metered data plans could very well represent a (new) body blow to Internet radio. It will come down to where the data levels are set for the various plans.

    For example, AT&T’s ‘Data Pro’ plan provides 5 GB, which sounds like a lot until you factor in a 2-hour movie by itself eats just about all 5 GBs. If my math is correct, 5 GB of data would deliver approximately 10 hours of streaming audio. With Internet radio’s average TSL currently running at 44+ hours/month (and growing!), it’s kind of obvious the current plans aren’t very conducive to webcasting.

  3. Paul Riismandel August 30, 2010 at 8:32 pm #

    @John, the NAB is only pushing for analog reception.

    @Will I think your bandwidth estimates are a bit high. While a 2 hour movie takes up 5 GB on a DVD, the newer codecs used are more efficient, especially delivering reduced resolution to smartphones. So the estimate is likely closer to 1 GB per hours depending on the source. Still, that’s not a whole lot of video watching for one month.

    For audio I’ve already done the numbers and came up with the estimate of 34 hours of stereo music listening in 2 GB, and as many as 136 hours of mono talk listening. My math assumptions are included in linked post.

    Nevertheless, that doesn’t negate the fact that AT&T is clamping down on wireless data at the same time that mobile streaming is growing, and it’s a real threat.

  4. Will_Tucker_FMX August 31, 2010 at 7:29 am #

    Thanks for the correction, Paul. I left a ‘0’ off my estimate. It should have read ‘100 hours’.

  5. john August 31, 2010 at 9:43 am #

    The relative spottiness of wireless data coverage, and its battery-sucking nature is what makes me avoid streaming content on 3G. Not only does WiFi work better, but when there’s WiFi there’s power.

    Mobile, it’s all local files.

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