Why You'll Pay For Netflix — Even If You Don't Subscribe To Netflix

Velcroman1 writes "At the 2013 Consumer Electronics Show, Netflix announced Super HD, an immersive theatrical video format that looks more lifelike than any Web stream, even competing with Blu-Ray discs. But there's a costly catch. To watch the high-definition, 1080p movies when they debut later this year, you'll need a specific Internet Service Provider. Those on Cablevision or Google Fiber are in; those served by Time Warner or a host of smaller providers will be out of luck. But regardless of whether you subscribe to Netflix, you may end up paying for it, said Fred Campbell, a former FCC legal adviser who now heads The Communications Liberty & Innovation Project think tank. 'Instead of raising the price of its own service to cover the additional costs, Netflix wants to offload its additional costs onto all Internet consumers,' Campbell said. 'That's good for Netflix and bad for everyone else in the Internet economy.'"

Comments

Shill (deliberately?) misunderstanding CDNs..

[nweaver]

The 1080p Netflix service is only available when the ISP allows Netflix to deploy CDN (Content Delivery Network) nodes in the ISP's network.

Now true this is unfair to those ISPs who don't allow Netflix to deploy CDN nodes, but in general, CDNs save both the content provider and the ISP money: instead of traffic traversing the ISP's Internet connections, its served locally from the CDN nodes. So it acts to save the ISP money, not cost them. If 1080p videos are twice as large, but things are cached in the local network 75% of the time, the ISP sees substantial savings.

The only reason a major ISP would not want a Netflix node is that they are worried about Netflix competing with their (non Internet) TV services.

Overall, the Fox "article" is clear propaganda, written by and interviewing those who either, through ignorance or will, misunderstanding how CDNs operate.

Re:Shill (deliberately?) misunderstanding CDNs..

[Anonymous Coward]

Netflix is a rival to Fox (i.e. Murdoch). It takes eyeballs away from their trashy output. Don't forget Netflix is also available overseas, so people in Europe can cut the satellite too (see Sky network). People here are cutting the cable in droves, and the younger me-me-now-generation aren't even bothering with it in the first place. People are content to fill their voids with cheap anime, old BBC programming, and the odd US series, especially the kids.

What will happen though, is Netflix raising their prices over the next few years, and they won't be inflation, they'll be much much higher, until they're up at basic cable levels.

ESPN already does this

[Attila Dimedici]

ESPN already does this. You can only view the ESPN360 website if your ISP pays ESPN a fee for every one of its subscribers. It is a small fee and most ISPs have concluded that passing that fee along to all of their subscribers is worth it to keep those who would jump to another provider in order to get access to the ESPN360 website. ESPN claims that ESPN360 is a free website, since they get to hide the charge in your Internet bill (the ISP is not going to break it out because then the people who have no interest in ESPN would scream, but since it is so small most of them are completely unaware of it).

Ya no kidding

[Sycraft-fu]

Akamai has done this kind of thing forever. When I worked at Network Operations for the university I work at, Akamai approached us. They wanted to install cache engines in our data center. They would provide us all the hardware, 3 fairly high end servers and a switch, as well as support for setting them up. All we had to do was put them in.

Net result? About an immediate 5 mbps average drop in our traffic, more at peak times. This was back in like 2002, and we only had like 100 mbps of Internet total.

It was all kinds of great. We had less network traffic, people got much faster videos, MS updates, and so on (Akamai is used by a lot of companies), and of course Akamai saves on bandwidth on their end. Everyone won, it was better service/less cost for all parties.

Re:Ya no kidding

[cdrudge]

It's the same with Netflix. They give you one or more 4U servers with about 100TB of storage. The ISP just has to provide the 10g network connection and the electricity.

And if you don't want to host their equipment, you can also get some of the benefit by using one of the dozen or so peering exchanges where they have equipment already setup.

The thinktank opposes Net Neutrality

[Nimey]

Per Ars Technica, this thinktank's got a history of opposing Net Neutrality.

Actually, read the Ars article. It's better quality than this paid hit piece. Did anyone notice that the final link in the summary goes to Fox Propaganda?

You already identified the savings.

[DragonWriter]

So It's not that the ISP is building out infastructure, the ISP is having to spend money to provide a better experience for Netflix. It

As I understand, Netflix's CDN, while access to "SuperHD" content is used as the lever to get ISPs to buy in, isn't SuperHD-specific. So, buy buying in, the ISP improves the experience for Netflix users while simultaneously reducing the load Netflix places on the ISP's bandwidth -- resulting in better performance for all of the ISPs users.

It would seem that this would lower the amount of bandwidth the ISP needs to the internet but when we looked Netflix required 5 Gb of throughput to their caching server....so where's the savings?

Right there -- 5Gb of throughput is probably a lot less that any but an extremely small boutique ISP is already having consumed by connections to Netflix at peak. Last I saw stats, Netflix was estimated to be the source of around a third of the peak downstream internet traffic.

Re:Non-Event. Just silly...

[b4dc0d3r]

I lived on my street, in the next to last house built, with no option for cable at all. DSL sure, but there was no cable on my side, and no plans to build it.

I called, I chatted, I mail-bombed the board and executives with a copy/paste chat session which went so horribly wrong I would not have bought the company's services if it had been available the next day.

I saw a cable truck on my side of the street, 4 years after the last house was built. Nothing but satellite dishes on this side. I got DSL, which was re-branded AT&T two months in, and I was furious, but I trusted satellite less.

I got the $20/no naked DSL for 4 years, and finally upgraded to a faster speed. The cable co can go fuck themselves, which is exactly what they have been doing. They didn't call me to let me know it was available - they sent the same flier they have been sending for 4 years, when it has not been available.

I gave the co. my phone number, a very pleasant woman called me after my mail-bomb and apologized that they didn't have service here, and sorry that the representative took 30 minutes to not figure that out. So they have me as a lead. A simple call and some negotiation on price as someone who raised awareness of failures in their process, and I'd be a happy customer.

Still on DSL. Cable co can't be bothered with me, apparently. Or with informing customers that a cable has been laid and service is available.

Doing nothing for their non-customers, and would-be customers, despite having it pointed out to them.

Zero incentive indeed, even after having put in the cost. Sending someone out to knock on my door would have given them years of continuous service upgrades. Guess they don't care.