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iPad Will Bring Sending Party Pays Model To Content Providers

There has been a lot of discussion online the past few days surrounding the Apple 3G iPad and A&T when it comes to the subject of HD video being delivered or not delivered. Speculation surrounds everything from conspiracy theories to bandwidth limitations and more. While I’ve yet to try out my new 3G iPad, as I’m on the road (no surprise) and it’s home, I do have my WiFi only iPad and a few Novatel Wireless MiFi’s with me, and I can report that I can still watch all the HD video I want to over them, but at a price. That price is I'm on a far different, and capped 5 GB plan at $60.00 per month.

With the 3G iPad at $30 a month, Apple and AT&T are not expecting people to be watching HD video that eliminates the cable bill. That would be foolish for AT&T and well that would end up harming Apple in the long run.

Let’s use FLO TV for comparative purposes.

An unlimited plan with FLO is $199.00 and change for the YEAR. So if we apply Apple/AT&T math that’s almost 7 months of service, but since I’ll apply a liberal split between download email, web surfing and such, I would say that an all TV package at $200 a year would likely cover most normal users. Divide that by 12 months and you’re at roughly $17.00 a month, or roughly six HD episodes of one hour television programming via iTunes.

Now, apply cost of bandwidth, the cheap part, plus the cost of managing all that infrastructure, if you’re AT&T it’s the most expensive part, and you’ll quickly realize that $17.00 a month isn’t enough. For comparison, just look at their regular monthly Laptop Connect plans and the costs for 5 GB of data. More like $60.00 a month. That’s still not a big enough data cap for mobile bandwidth to cover the amount of content that six one hour shows would bring down. Ergo, the need for an add on “programming” delivery fee.

My gut tells me that by the fall TV season there will be “packages” for streaming of services like Hulu, Netflix and others in HD and SD, and that like your cable company or satellite TV provider the pricing for delivery will be tiered. Oh, and yes, I wouldn’t be surprised if Google gets hit with some fees by AT&T for delivery of YouTube videos. The sending party pays model is coming. Just you watch.


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