Time Warner (NYSE: TWX ) wants to charge consumers for the data they download rather than the bandwidth they use, according to an article by Felix Salmon on seekingalpha.com.
Salmon also mentioned something I hadn't considered before:
It's worth remembering that companies in the telecoms and media space have historically made their enormous profits largely by getting their customers to pay a lot of money for stuff that they don't want and won't use.
Cell phone companies sell you minutes that you don't use, cable companies sell you channels that you don't watch, and ISPs sell you unlimited bandwidth and downloads, even if all you're doing is checking your email once in a while.
Wow. That's so true. I pay for many cable channels I never watch. Dell (Nasdaq: DELL ) sold me a computer with plenty of features and capacities I never use. Canon (NYSE: CAJ ) included a fax feature that I never used on my fancy printer.
You might think insurance companies operate in a similar way -- you pay all that money and rarely need to file a claim -- but you'd be wrong. With insurance, you're buying protection, and even if you don't have to file a claim, you are protected.
Interesting, but does it have any implications for us? Absolutely. As consumers, we can reconsider some of the things we pay for.
If your cell phone is laden with features of no interest to you, next time you need to buy a cell phone, find out about a less fancy one -- if you can save money in the process. Look at your cable TV bill. If you only watch two or three of 100 channels you get in a bundle, ask yourself whether those two or three are really worth it.
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