Get Ready for Metered Wi-Fi

Photo Credit: Chris Gash, New York Times

There’s a story in today’s New York Times on the impact the iPad is having on hotel Wi-Fi networks. Conclusion: Expect hotels to implement volume-sensitive pricing for Internet access via Wi-Fi. The typical plan will give you enough data for e-mail and basic web surfing, but video streaming is going to cost you.

Here’s part of the article, by Joe Sharkey, IPads Change Economics, and Speed, of Hotel Wi-Fi-On the Road:

IF, like me, you have been complaining about unusually poor Internet service in hotel rooms lately, the hotels have a good explanation.

Largely because of the broad use of iPads and other mobile tablets, which are heavy users of video streaming, the guest room Wi-Fi networks that most hotels thought they had brought up to standard just a few years ago are now often groaning under user demands.

“The iPad is the fastest-selling device in consumer electronics history, and because of it the demand placed on any public place Wi-Fi system has gone up exponentially in the last year and a half,” said David W. Garrison, the chief executive of iBAHN, a provider of systems for the hotel and meetings industries.

This means more hotel customers are unhappy with their Internet connections. Hotel owners, meanwhile, who are digging out from a two-year slump caused by the recession, will probably have to invest more money to provide more bandwidth.

For travelers, it may mean still another fee, since hotels will be paying their own Internet bills. Some hotel Internet service providers are proposing a solution that offers tiered Wi-Fi service. The lowest level, suitable for basic Internet requirements like checking e-mail, would be free, but other levels would be priced depending on bandwidth requirements. According to iBAHN, iPads consume four times more Wi-Fi data per month than the average smartphone.

The iPad represents the “final nail in the coffin” for the idea that all Internet is free, Mr. Garrison said.

It’s all about the iPad, despite the fact that good old-fashioned laptops can also do video streaming (as can clunky smartphones such as the Samsung Galaxy S, for that matter.)

What is it about the iPad that makes people want to stream movies so much more than laptops do? From a purely technical standpoint, the only significant differences between the two platforms are the laptops’ larger screens, potentially better sound, and superior storage compared to iPads. Doesn’t every traveler have a laptop? Apparently not.

Business travelers have a large number of laptops, but more and more they seem to carry iPads as well. It’s not unusual for frequent fliers like myself to see our whole row using iPads at the same time, and my informal survey suggests that about half the iPad users in Economy Plus, Business, and First Class are also carrying laptops.

There are still a number of things you can’t do very well on an iPad, particularly the mundane business of word processing and presentation creation, so the laptop is still a necessity. It’s also still the case that some of us like to carry a fairly large document inventory when we travel, and cloud-based storage is much more expensive than a fat hard drive.

If you are using the cloud for your documents, you’re slamming your hotel’s Wi-Fi, although not as hard as you do with video streaming. Just as video streaming is the dominant Internet application in terms of volume overall, so is it dominant on hotel networks.

Getting back to our question about why the iPad makes people want to stream video, the best answer comes from a panel at TelcoTV2011 today: Matt O’Grady (EVP, Media Audience Measurement, The Nielsen Group) says consumers see the iPad as a “mobile TV set.” You watch streaming video on it because that’s what it’s for. Sure, you can do email, web surfing, and gaming on it too, but the killer app for tablets in general and iPads in particular is video. That’s why people pay the extra money and tolerate the extra weight that iPads bring in comparison to smartphones.

This effect – people carrying a portable TV wherever they travel – is slamming hotel networks, and pricing changes are the result. Pricing will be an efficient solution, because consumers actually do have the choice of loading video on their iPads before they travel (and while traveling if they also carry a laptop.) It’s less convenient, but if there’s money in it, people will do it.

  • George Ou

    “Doesn’t every traveler have a laptop? Apparently not.”

    Almost every iPad owner I know carries a laptop. I see these people at the airport all the time with their laptop in their back and an iPad on the table on a stand. One guy who sat next to me had a nice Macbook Pro with 15.6″ widescreen display but chose to watch videos on his iPad.

    I think there are two reasons main for this. First, the iPad has 11 hours of video playback time and laptops are limited to somewhere between 3 hours to 8 hours (but more likely on the shorter end of the spectrum). People want to save the battery life on their laptop for work, and there isn’t much battery life to begin with. This will change in 2013 with Intel Haswell, but for now ARM based tablets dominate in battery life especially ARM processors from Apple. The second reason might be more superficial. The iPad is a status symbol and having one on the table at the airport shows off one’s status.

    As for “clunky” Samsung smartphones, I think the facts may speak otherwise. The Galaxy Nexus has a massive 4.65″ 1280×720 display (2.1 times viewing size for widescreen videos) and a larger battery, but it is lighter and thinner than the iPhone 4S.

  • George Ou
    125.3 x 66.1 x 8.49 mm
    115.2 x 58.6 x 9.3 mm

    Not really much size difference, though the S II is thinner and has a much bigger display for widescreen videos.

    Also, the iPhone needs extra bumper protection at the edges which add considerable bulk (when in the pockets) considering its high sensitivity to cracking in the front and back.

  • Richard Bennett

    Two comments and they’re both defending the honor of the Samsung Galaxy S against my charge of “clunkiness?” That’s letting the tail wag the dog. The point is simply that people don’t find watching long form videos on a “massive” 4.65 inch screen very satisfying, according not only to my personal intuition but also according to the data collected by IBAHN on hotel usage.

    So the phenomenon of tablets leading to a substantial increase in wireless usage is very real, and it’s distinct from the usage that takes place from smartphones and laptops. This is what the relevant data says.

  • George Ou

    The IBAHN quote said 4 times more than the “average smartphone”. Isn’t it possible (in fact probable) that some of those smartphones use substantially less than than a quarter of the data of an average tablet? On the flip side isn’t it possible that other smartphones use substantially more than the quarter of the data of an average tablet? That would seem to be a logical hypothesis if we make an educated guess that not all smartphones are alike and that there is a vast difference in screen resolution, screen size, and video playback capability in both hardware and software.

    But let’s peg the ratio of average smartphone data usage to average tablet data usage at 4:1. Smartphones will play a significant role in data consumption because the ratios of smartphones to tablets is higher than 4:1. And if the line between smartphones and tablets is close and tablet consumption is capped the same as smartphone consumption, it is possible that the ratio will narrow.

    I don’t think there is that much disagreement between us if we set aside from some finer details because both smartphones and tablets consume a lot of data. The Apple centric view is that there is a bigger difference between smartphones and tablets. The Android centric view is is a smaller difference. They’re both relevant viewpoints and they both have relevant market shares.

  • Richard Bennett

    Is there a “a vast difference in screen resolution, screen size, and video playback capability in both hardware and software” within the smartphone category?


    There are minor differences from the low end to the high end in comparison with the gap between the high end of smartphones and the iPad. The key variables are screen size, perceived display quality, and battery life.

    While roughly half of travelers who take iPads also take laptops, (practically) all of them carry smartphones and they aren’t using their phones for video streaming. It’s one thing to watch a YouTube clip of 3 or 4 minutes on a phone, but watching entire movies on handhelds with 4 inch screens would just be painful.

  • Steve Crowley

    I’d like to see the data behind iBAHN’s claim that “demand placed on any public place Wi-Fi system has gone up exponentially in the last year and a half.” I doubt it.

  • Richard Bennett

    It doesn’t take very many people streaming Netflix to give local data volume a big bump, and by every measure there’s a lot of Netflix going on.

  • Steve Crowley

    I agree. That does not mean growth is exponential.

  • Richard Bennett

    Video streaming has a significant multiplier over web browsing, doesn’t it?

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