Who are we kidding? Of course it’s Netflix vs. cable (Dinosaur Media DeathWatch™)

Gigaom ^ | June 14, 2011 | Janko Roettgers

[abb]

Ask Netflix about cord cutting, and it’ll tell you: “It’s not happening, it’s not anything we are causing, cable and Netflix are complementary.” Then take a look at the actions of service operators, cable networks, consumers and even Netflix itself, and you’re going to see a decidedly different picture: Cable and Netflix are competing for the same eyeballs, the same money and the same TV real estate, and the fight is getting tougher by the day.

Not convinced yet? Then consider this evidence:

Consumers are ready to jump ship. Netflix users that stream the company’s videos to connected devices are twice as likely to at least downgrade, if not outright cancel their cable TV subscription than they were just a year ago, according to a new study from The Diffusion Group (TDG). Thirty-two percent of these Netflix users are thinking about calling their cable company. “Despite its rhetorical positioning, both Netflix and Pay TV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing, but antithetical to Pay TV subscription levels,” said TDG’s Michael Greeson. In other words: In the long run, Netflix will inevitably lead to cord cutting.

Content licensing is getting more competitive. Netflix Chief Content Officer Ted Sarandos revealed recently that Netflix is now at the table for pretty much any TV licensing deal. So why aren’t Netflix customers buying more content? Because some of the networks simply don’t like to share. Netflix would prefer cheaper, non-exclusive licensing deals, which would make it possible to get more bang for its buck. However, HBO and increasingly Showtime are insisting on exclusive content to prevent subscribers from jumping ship.

Many observers thought Netflix wanted in on this game when the company bought the rights to its first-ever exclusive show House of Cards this spring. Sarandos, however, said that it was exactly the other way around: Netflix was getting concerned that it would get shut out of too many deals for attractive serialized content, which is increasingly going exclusively to programmers like HBO, so it saw itself forced to act.

Cable companies castrate their TiVos. A number of cable companies now offer their customers TiVo-branded DVRs that offer access to all kinds of additional online content. But TiVo users who buy their devices at retail will be able to watch videos from Netflix and Hulu Plus with these machines, while customers who rent the same DVR from their cable company won’t have access to these two services. The logic? Netflix could get people to ditch their premium channels and ignore cable VOD.

Netflix is dominating every screen. Network operators are trying to bring TV everywhere, but they often must feel like the hare racing the porcupine: Wherever they look, Netflix is already there. The company’s service is now available on more than 250 devices, and Netflix is getting more aggressive about dominating every single screen. The latest ploy is a dedicated Netflix button on your remote control, which puts it in direct competition with your cable guide. That raises the question: Do you want to browse through thousands of channels, or simply access Netflix?

Incumbents are putting a cap on it. If you’re a network operator, how do you keep your customers from canceling premium pay TV services to watch everything online? Canadian ISPs seem to think that bandwidth caps are the answer, and they’ve been enforcing strict data diets for years. ISPs that charge consumers up to $2.50 per GB once they exceed caps as little as 2 GB per month have been a real problem for Netflix north of the border, forcing the company to default to SD-quality streaming for all Canadian customers.

There’s been some movement with regards to bandwidth pricing in Canada in recent months, but the conditions are telling: Shaw recently introduced generous 1TB caps and even unlimited data plans, but those are reserved for customers who have a pay TV subscription as well. Bandwidth caps in the U.S. are generally higher, but not really that generous either, especially if you’re a heavy Netflix user.

[discostu]

Actually cable ISPs are perfectly happy with the customers dumping the TV part of cable, so long as they keep on the ISP part. The TV part of cable is quickly becoming the loss leader, with channels constantly increasing the price they’re charging the cable company which then either forces the cable company to increase what they charge which alienates customers or let the increase eat into their profit. The internet portion of their business is free of that, they just need to keep the throughput up, which is easier the more people that aren’t watching TV.

The problem with net neutrality is it puts the government in charge. ISPs are easier to replace than the government.

[abb]

I suggest that Netflix already is “another traditional cable company” that allows on-demand viewing and simply uses broadband fiber as the carrier instead of 75 ohm coax.

[perfect_rovian_storm]

On a conservative website? REALLY??

A ‘net neutral’ world? You mean a world where the government is brought in to regulate the internet? Of course, this is the benevolent version of the government who never oversteps its power and ALWAYS is out to HELP the consumer, right? Yeah, let’s totally let the government who told us that the income tax would never be more than 10% regulate the internet. Let’s let the government who promised us that Medicare would NEVER cost more than $9B regulate the internet. Let’s let the government who told us that they’d only withhold taxes from our paychecks until WW2 was over regulate the internet! That’s the ticket! YEAH!

Netflix is charging you for a service that is increasingly monopolizing the ISPs networks. Either the ISPs can work a deal with Netflix, which will cause Netflix users to pay more for Netflix, OR the government can step in with ‘neutrality’ and the ISPs shift the cost to the end users, so EVERYONE WITH AN INTERNET CONNECTION WILL PAY FOR YOUR DAMN NETFLIX!!!!!!!

You can shift it around any way you like, but that cost is going to have to be paid by someone. It would be a much wiser decision to let the private companies work it out rather than having Daddy Government come in and start ‘regulating’.

I don’t use Netflix. I don’t plan on using Netflix and I don’t feel I should have to pay for your Netflix.

If Papa John’s was pawning the cost of delivering a pizza onto the phone company, you can damn well bank on it that the phone company would want to charge them more for the effort. Then every idiot and his retarded cousin would be on forums demanding ‘Phone Neutrality’ because some leftist Soros funded group told them it was ‘necessary’.

[HiTech RedNeck]

The fiber lends itself well to delayed viewing, but the coax is designed for real time.

[abb]

http://www.reuters.com/article/2011/06/14/us-google-idUSTRE75D5C920110614
Google hones search for mobile and speed

http://www.bloomberg.com/news/2011-06-14/comcast-to-start-testing-remote-storage-video-recording-service.html
Comcast to Start Testing Remote-Storage Video Recording Service

http://www.videonuze.com/blogs/?2011-06-14/New-Research-Shows-Netflix-Is-A-Catalyst-for-Cord-Cutting-and-Cord-Shaving/&id=3101
New Research Shows Netflix Is A Catalyst for Cord-Cutting and Cord-Shaving

http://news.cnet.com/8301-30686_3-20071138-266/cable-fights-to-stay-relevant-in-online-world/
Cable fights to stay relevant in online world

[HiTech RedNeck]

And oh woe, what if some phone company wants to partner with Netflix and arrange for an optional, extra cost feed that’s local so its infrastructure burden is minimal? Wouldn’t the neutralites’ heads explode?

[AFreeBird]

Netflix has seriously screwed the pooch on their “New and Improved” UI. Announced on their blog; there are 5,000 comments (ALL NEGATIVE), and no more can be accepted.

Epic fail.

I’m about ready to call and cancel.

[OriginalChristian]

Dropped Dish Network last year for Netflix over the Wii console. Just this month, dropped my ATT landline for DSL only. Just configured it last night. Switched to Vonage VOIP for landline. Please note that when you drop your landline, if you have DSL as well on the account from ATT it drops too and is less likely to be expedited for reconnect. We had 13 days without DSL.

We use internet for news, it even comes across on the Wii, all except local and we get that from the internet.

So far, no regrets. I hope to get Vonage connected tonight.

[yldstrk]

I have seen a tip for saving money that says drop cable and use Netficks, so yeah, cable and dish buh bye, you can’t rip off people anymore.

[AnotherUnixGeek]

This is what "net neutrality" is about. Cable ISP's are desperate to keep Netflix from poaching their TV cable customers, so they want to make Netflix streaming more difficult/more costly.

In a net neutral world, they would not be able to do so, any more than the phone company can charge you more to call Domino's rather than Papa John's, or the water company can charge you more per gallon for filling your pool than for washing your car.

Yup - net neutrality is concerned with ISPs discriminating between different data protocols, services and content. The problem is whether letting the FCC/government have the mandate to define "neutrality" and when exceptions can be made is going to do more harm than good. Staving off ISP data discrimination by accepting FCC-approved data discrimination at the behest of political pressure groups like the RIAA or the PTC may be a net loss.

[HiTech RedNeck]

I’m told that new models of cell phones have similar teething problems, even the technicians don’t have them down flat yet, and still the public is clamoring for them.

C’est la vie de technologie.

[Notary Sojac]

Actually, I think that I should have to "pay for my own Netflix".

I think everyone should pay for all the bandwidth they use, at the same price per unit of bandwidth regardless of what's being served up at the other end.

If a customer gets to watch all the HBO he wants for a flat rate per month, then the same deal should apply to Netflix.

[thecabal]

Here’s one family who cut the cord and went to Netflix. We’re saving a buttload of money going down the drain for 100s of channels of crap.

[Notary Sojac]

That’s a fair point and worth noting.

[D-fendr]

A netflix HD movie uses about 3 gB. If cable companies want they can decrease the BW limits. AT&T DSL started in May with a 150 gB limit. Not too much of a problem. I believe some ISPs limit at 60 gB which could be a problem.

In an ideal world, there would be ISP choices everywhere, but...

[HiTech RedNeck]

Don’t confuse burst rates of transfer with sustained rates of transfer or with gross quantity of downloaded data demanded by the customer. Optimizing each one calls for different strategies.

[Notary Sojac]

Actually cable ISPs are perfectly happy with the customers dumping the TV part of cable, so long as they keep on the ISP part.

So how come so many of them are capping/throttling their ISP services rather than the TV services?

How come no cable company has said "from now on your monthly payment only entitles you to 120 hours of TV a month"?

[y6162]

I love Netflix and plan to downgrade cable.

[Hodar]

I can watch boring old shows that I choose for $9/month; or I can watch boring old shows that someone else choses for me for $80/month.

What’s the question again?

[tall_tex]

I love Roku...

I too have had it for about 3 years. Last night I wanted to watch a streaming movie. When I fired up it would not let me on because my wife was watching one on another tv.

This is the first time this has happened. Has somthing changed?