Netflix Predicts Unlimited Video Streaming Plans From Telcos; But How Will They Make Money Then?

During the on-going Mobile World Congress in Barcelona, Netflix co-founder Reed Hastings has made a very daring prediction: Soon, every telecom operator across the world will provide unlimited video streaming services via data plans.

As per Reed, such is the tremendous demand for videos right now, that telecom operators will have no other choice except to offer unlimited video for all their users.

As per Reed, telecom operators will devise innovative plans, which will offer unlimited streaming of videos, albeit at a slower internet speed.

He said, “What we are going to see I think is a number of companies pioneering new ways of offering services to the consumers where it is unlimited video data but it is limited to say one megabit speed. So it is a slower speed but you get unlimited data on that and that turns out to be very efficient on network so an operator can offer unlimited viewing.”

He also said that within 20 years, Internet will be the only location where videos are being viewed, and mobile phones would be the most preferred location.

Why This Claim Makes Sense For Netflix

Netflix, which streams on-demand videos, which can be viewed on mobile phones, tablets, laptops and desktops would certainly want this prediction to become true.

In India, Netflix has already 2-3 lakh paying customers within a year of their launch, and globally, they have 9.4 crore customers, with 47% of them being out of USA.

In case telecom operators start offering data plans with unlimited video streaming service, then Netflix and other on-demand video service providers would be the one with maximum benefits.

But this opens up an interesting question: How will telecom operators make money then?

Videos Are The Goldmine For Telcos!

As per various studies by industry veterans, it has been proved that video watching is the most data-consuming activity for any mobile user.

As per studies and researches by Ericsson & Cisco, it has been found that videos will consume 70-75% of data usage for any smartphone user, on an average by 2020. Right now, this figure is hovering at 50-60% share, at any given time.

Now, if a data plan starts providing unlimited video streaming, then it will mean that upto 70% of monetization by telcos will simply vanish, leaving a huge hole in the profitability of telecom operators.

Having said that, the Jio phenomenon has clearly demonstrated that in future, telecom operators would mainly mint money by selling information – customized, exclusive TV shows, exclusive movie launches, operator-specific games and music access.

Information is the new Gold, and mobile internet is the medium using which this gold would be extracted, and sold to content-hungry consumers.

Netflix founder’s prediction has certainly opened up a new dimension for further discussions in this regard, and certainly a valid point as far as customers are concerned.

But will telecom operators leave aside their differences, and launch unlimited video streaming plans? Do share your views by commenting right here!