The number of people willing to pay for television has steadily decreased, putting pressure on the cable industry to find new sources of revenue.
Many companies like Time Warner Cable think they have found a solution by changing how they charge people for broadband internet services. Brian Stelter explains.
Broadband internet tends to be a high margin business, a profitable business to the companies that provide it. And as they feel pressure on their lower margin businesses, like cable television, they seem to be taking the broadband side of the equation and ratcheting it up.
Over time ever since the wired internet becoming more like wireless internet. We’re all used to paying AT&T or Verizon or T Mobile every month depending on how much phone and text and data we consume.
In the future our broadband bills will probably look more like that as well. And using less internet might cost us less, using more internet might cost us more.
his idea’s called usage based billing and it’s catching on among companies because it gives them more flexibility in the way that they price broadband. They can move the price up or down and it also gives them perhaps more income for investment in broadband in the future. But it is to start ups and other companies that want to create really useful, interesting news services on the internet.
There are consumer groups that say this could clamp down on innovation in the future because well, if you know the meter’s running you might try to use less internet every month.
One of the early sites for these tests is in Texas, in San Antonio, where customers are being trained to keep track of what they use every month with a meter they can view online.And that kind of meter is good for consumers because it lets them when they’re getting close to the limit.
But as this idea rolls out in many parts of the country we have to think a little more about how much broadband we’re using, how many YouTube videos we’re watching, how many Netflix films we’re viewing. All the time, logging off the internet might start to feel more like turning off the lights when you’re leaving the house.
Finally the board of Newscorp will review a proposal to break up the company’s entertainment arm from its publishing unit. Amy Chozik is here to discuss the possible changes that Rupert Murdoch’s multi-million dollar empire.
Hi Amy. Hi So we’ve hear for some time about the potential for this happening. The sort of faster growing entertainment assets being cleaved off from the old line newspaper business. And there’s always been these rumors and now finally this might come to fruition?
Yeah, absolutely, I mean even before phone hacking in the UK was a problem, you know, some people within Newscorp had brought proposals to get rid of the paper, spinning them off, selling them, turning them into a trust, various proposals. Of course these were very quickly shot down by Rupert Murdoch who has a love for newspapers and has wanted to keep these.
Under this plan of spinning them off he would still have control of them they would just be a separate, publicly traded company much smaller than the company that would hold the entertainment assets, the cable channels, the movie studios, those things.
Ok. Right now, shareholders clearly like this because the stock went up, I think, almost ten percent yesterday.
But um, tell us about this newspaper company that would be spun off. I guess there’s about a hundred and seventy-five newspapers, which I was surprised by the number and then also the Harper Collins publishing assets but who would want to own that company?
Well, Rupert Murdoch will own that company, so his family will control it but they’re still working on the structure
there’s going to be other assets within that company and one of the things they’re trying to figure out is what other assets could be kind of financially prop up the newspaper.
So Joe Kline came over and started an education group within Newscorp. That could potentially be very lucrative in the future. That would be within the new publishing company.
And your story suggested that Joe Kline might actually have a senior executive post in that newspaper publishing company.
Yeah, exactly. I mean he’s not a newspaperman, I’m not sure he would be picked as CEO but he’ll have a senior role, absolutely.
And Chace Carey who is going to head up the entertainment assets, is he the one behind this? Has he been pushing for getting rid of the old line newspaper assets?
Well. I’d say this is a victory for Chase Carey. He’s been talking at investor conferences how certainly they’ve considered spinning out the papers and it’s kind of well known that he’s never been a fan of the papers the way that Rupert is and he’s much more.
he feels like the cable channels have kind of not been given the value that they deserve, partly because the drag of the finances by the paper. So he would definitely stay at the entertainment side of the company and I’d say he is pretty happy about us moving forward.
And he has one of the all-time great moustaches in corporate America. He has a great moustache which, little known fact I learned this from you! Right, it hides a scar from hockey?
Actually people think it is a rugby scar but actually he was in a terrible car accident in college, went through the windshield and the moustache hides the scar.
So when is the board meeting? The board meeting is today. So they could decide as early as tomorrow whether this will definitely go through. But they did fly in top editors from all over the world, Australia, UK so that would mean they are serious about this.
Wow thanks for coming on Amy. Sure, thanks for having me. That’s all today. Please follow us at nytimes.com for our continuing coverage of these and other stories. I’m Peter Lattman reporting for Business Day Live. Thanks for watching.