Netflix Streaming Arrives, Pocketbooks Will Burn

Netflix this morning announced that they’ve developed an app that will allow both iPod Touch and iPhone users to stream video selections from their instant queue. You’ll need to be a Netflix customer on a $8.99 or higher to use the free application, which will work over both Wi-Fi and AT&T’s 3G network (just in time to run smack into AT&T’s new 200 MB and 2 GB caps).

It’s not easy to explain why mobile data caps, which in AT&T’s case appear to cost users $5 to $10 less a month, are actually bad for consumers. So consider the case of Netflix streaming.

As mentioned above, Netflix will soon allow users to stream movies over 3G connections on their iPhones.

I previously crunched the numbers here, and discovered that someone streaming, say, The Blind Side would blow through more than 200MB of data in one sitting — reaching the cap for AT&T’s $15/month plan. This user would be charged $15 per additional 200MB, or $15 a movie, which should be streaming for free (if you pay $8.99 a month to Netflix).

People can always upgrade to the 2GB a month plan, but given our increasing data consumption, it’s only a matter of time before we blow through that cap too.

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