The internet price gap, and what it means

22:21, Oct 06 2011

I was standing in Aro Video in May awkwardly juggling six DVD cases when I had an odd epiphany.

It felt strange standing in a video store, the plastic edges of the cases digging against my elbows, and thinking about how quickly the DVD had become irrelevant. I can remember being struck by the endless futuristic capability of our first family DVD player. It had surround-sound speakers. Now, I was struck only by how unusual and large this physical space was housing all of this data. It seemed... pointless?

I was standing in the middle of the store, I felt awkward and clumsy. I felt watched, my choice seeming increasingly impossible. I left empty-handed.

I generally detest all patronising references to New Zealand as a South Pacific backwater that lags behind the rest of the world in technology. But for the first time I saw a clear and glaring gap with America in how we receive our information.

Standing in the middle of Aro Video it dawned on me that living abroad, I hadn't been in a video store for months.

Scratch that: I haven't even seen a video store in Boston. The Boston Globe was running "the death of video store" articles two years ago.


I pay $16 a month to Netflix to rent and stream movies and television to my heart's content. The selection of titles available for streaming is uneven, but between Netflix, Hulu, individual network websites and some legally nefarious downloading, I will not want for a video store again.

Video stores in the USA survive only in small towns. LP and I rent movies when we're staying at her parentS' house in Grass Valley, a town of 15,000 a few hours northeast of San Francisco in California.

When the quality of broadband Internet dips outside of the cities, video stores seem to become noticeable again.

Now, what media people use to legally consume information is of little social significance. It is a first world problem. (I guess the demise of the video store does take one job off the "enviable student occupations" list.)

But it got me thinking about how much the cost of bandwidth in New Zealand was holding people back in new media innovation and technology.

In Boston I pay less than 50 New Zealand dollars a month for unlimited broadband bandwidth and an unlimited data plan on my phone.

Poking around online, I see that the top Telecom plan, offering 60GB of bandwidth, costs $105. On Vodafone's top $150 iPhone plan, customers are offered only 500MB of data.

It's a huge disparity.

Netflix would break the New Zealand Internet. American studies have estimated that Netflix streaming takes up 20 per cent of primetime bandwidth use. Watching high-definition television on Netflix chews up about 1GB of bandwidth an hour.

American media innovation has realigned socially how people receive information and my expectations had shifted accordingly. While home in May, these differences all jumped out at me.

From my iPhone I send email, listen to NPR and all of my favorite podcasts (WTF FTW!), I read the New York Times, the Economist and pick up all of my RSS news feeds, as well as streaming a range of video.

My computer is now my television, video store, music player, shopping portal and telephone.

With such a price on bandwidth in New Zealand, the level of media innovation has been microscopic in comparison.

Until high-speed broadband upgrades take hold and broadband caps are removed, New Zealand will always be behind the cutting edge.


The discussion about tipping was great and prompted much discussion in our apartment.

I'm not going back to the well, but I was surprised, fascinated even, by the huge tough streak running through the remarks. 

I personally, and in no real disrespect to anyone who disagrees, think it is a bit misguided to be so cruel towards wait staff. The "I work in IT and nobody tips me for doing my job" argument is invalid. Nobody makes $2 an hour in IT.

Owners could also start paying their staff a full wage, but they wouldn't absorb those costs, you would.

I just wanted to come and say: don't hate the player, hate the game, and when someday some waitress tells me about how miserly her New Zealand customers are, I think I have a sense of now of how deep our national resentment of tipping runs!

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