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Netflix CEO Keeps Whining About Comcast

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
4/16/2012
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Here's what's pushing cable's buttons this morning.

  • Netflix Inc. (Nasdaq: NFLX) CEO Reed Hastings took to Facebook again to air his grievances about Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s streaming video policy on the Xbox 360, arguing that it violates network neutrality rules. He's upset that anything streamed via the Xfinity TV app on the gaming console doesn't count against a user's monthly 250-gigabyte data cap, while streaming of Netflix or the standalone HBO GO app on the device does.

    "Comcast [is] no longer following net neutrality principles. Comcast should apply caps equally, or not at all," Hastings wrote. Comcast has maintained that video streamed via its Xfinity TV app on the Xbox doesn't apply toward caps because it's delivered over its private IP network, but later changed that language in its FAQ to say that the "Xbox 360 running our Xfinity TV app essentially acts as an additional cable box for your existing cable service." (See Comcast Won't Cap Xbox 360 Streaming .)

  • Roku Inc. has entered the Canadian market by accepting orders for two streaming players -- the Roku 2 XD and the Roku 2 XS. The Roku 2 XS (C$109.99; US$109.97) is the company's top-of-the-line streaming player, offering resolution up to 1080p HD. Roku said its app menu for the Canadian market, which today includes popular ones like Netflix and Crackle, will broaden at a pace similar to the U.S., where it already offers more than 450 "channels." (See O, Canada! Netflix Streaming Gets a Reprieve.)

  • The Comcast Media Center (CMC) has inked a deal to provide live coverage of the United Launch Alliance (ULA)'s rocket launches, which are delivered via its streaming media service. The CMC is delivering feeds via fiber for closed-circuit viewing at ULA's 11 U.S. venues, including Cape Canaveral. The ULA designs, builds and launches birds for NASA and the U.S. Department of Defense.

  • DirecTV Group Inc. (NYSE: DTV)'s new distribution deal with Starz Entertainment LLC adds in TV Everywhere features that will let DirecTV subs watch the premium programmer's content on a range of mobile devices.

  • Cisco Systems Inc. (Nasdaq: CSCO) and Harmonic Inc. (Nasdaq: HLIT) will both help NBCUniversal LLC with its multi-screen coverage of the 2012 Summer Olympics in London. Cisco's will pitch in pieces of Videoscape for NBC's IP video production, content management and network distribution, while Harmonic adds in its MediaGrid shared storage systems and ProMedia Carbon transcoding software.

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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    msilbey
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    msilbey,
    User Rank: Blogger
    12/5/2012 | 5:36:24 PM
    re: Netflix CEO Keeps Whining About Comcast


    Maybe the cable providers should sell access to their managed IP networks in the last mile to Netflix. (Gee, like a CDN model) Then Netflix could foot the bill and take caps off the table for subscribers. Of course that would mean subscription rates would have to go up. Actually, ideally consumers should get a choice- $8 subscriptions with caps, or higher-priced subscriptions without caps. Actually, that's kind of what we have now - Netflix or cable. And the circle goes round.

    paolo.franzoi
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    paolo.franzoi,
    User Rank: Light Beer
    12/5/2012 | 5:36:23 PM
    re: Netflix CEO Keeps Whining About Comcast


     


    If you take what might be coming to the logical extreme and cable does SDV using IP Video it will become quite clear that all this mumbo jumbo is rather tied up in nonsense.  The definitions and allocation of bandwidth is arbitrary and at the whim of the access provider (whether its cable or telco).


     


    seven

    Telco
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    Telco,
    User Rank: Light Beer
    12/5/2012 | 5:36:23 PM
    re: Netflix CEO Keeps Whining About Comcast


    I want to say the solution is in the network tools to allow some content to be in the Advertiser+Revenue Share+Subscriber DATA Plan of a Carrier Portal while other providers push Subscriber subscription+Advertiser+Carrier network management purchase.  But the shift is really headed towards Advertiser+Revenue Share+Subscriber DATA Plan of a Carrier Portal and everyone else gets best effort; kind of like WiFi HotSpot provided by AT&T for AT&T subscribers at Starbucks and the balance of Free Wi-Fi from Starbucks is a dribble for the balance of users.


    I am a carrier revenue advocate and I am a Net Neutrality proponent so this schytophrentic behavior is quite normal for me.  I cannot think of an App I use in any of my carriers' portals, instead I go to the destinations off the radar such as IEEE, Purdue.edu, Light Reading.   I have never been to Netflix and it is perhaps 1 or twice a year I go to U-Tube.


    The Carriers, Content/App Developers and the consumer have some hard choices.

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:36:23 PM
    re: Netflix CEO Keeps Whining About Comcast


     


    That ultimately might be where this ends up shifting... if you want better than best effort, you're going to have to pay for it... but will even that sort of idea get the network neutrality advocates' dander up?  I suspect it will, and I don't think this debate is going to end anytime soon.


    And, you're right, AT&T does set aside some of its capacity for its managed IP video service. But as we've discussed before, this will also cause confusion for consumers, who likely don't know which app on the xbox counts against the cap and which one doesn't. Many customers who don't read the policies and the FAQs might not even be aware that a cap even exists. JB


     


     

    paolo.franzoi
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    paolo.franzoi,
    User Rank: Light Beer
    12/5/2012 | 5:36:22 PM
    re: Netflix CEO Keeps Whining About Comcast


     


    yarn,


    Easy and illegal.


    seven


     

    yarn
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    yarn,
    User Rank: Light Sabre
    12/5/2012 | 5:36:22 PM
    re: Netflix CEO Keeps Whining About Comcast


    I don't think Netflix is really interested in opportunities to foot the bill for last mile delivery as that would be an extra cost and hurt their profits. However, for a service provider it's quite easy to zero-rate specific application types or web destinations.

    paolo.franzoi
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    paolo.franzoi,
    User Rank: Light Beer
    12/5/2012 | 5:36:19 PM
    re: Netflix CEO Keeps Whining About Comcast


     


    I believe Netflix DOES pay for its bandwidth.  I doubt anybody runs connections to their servers for 0.


    So unless you plan to start charging all content providers (like Light Reading here) and guarantee the performance of your network in all cases then you best start thinking about something else.  Do you plan to compensate Netflix if you have a network outage?


    seven


     

    gtchavan
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    gtchavan,
    User Rank: Light Beer
    12/5/2012 | 5:36:19 PM
    re: Netflix CEO Keeps Whining About Comcast
    Net neutrality is dead, networks don't come free. Everyone has to pay for their store front.
    dude_1_1_1
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    dude_1_1_1,
    User Rank: Light Beer
    12/5/2012 | 5:36:19 PM
    re: Netflix CEO Keeps Whining About Comcast


    Time to start calling for help.  Hard to see how they will escape unbruised.

    RBR
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    RBR,
    User Rank: Light Beer
    12/5/2012 | 5:36:17 PM
    re: Netflix CEO Keeps Whining About Comcast


    CDN’s are the fulcrum.  They get paid by content providers for eyeballs served for which they have a vested interest in premium access to service provider networks.  Usage caps on terrestrial service providers are driven by the wholesale cost for Internet access which they then mark up for retail; their local networks most often have ample capacity.  It is in the market’s interest that the role of Internet Service Provider shift from the local service providers to CDN’s with local access focused on being “smart” data pipes.  Broadband Access as a retail service (not the wholesale SLA type, direct retail to end user) where customers can then choose which CDN they want as their ISP.  CDN’s provide for their own capacity and interconnect facility with the local service provider (role reversal) just as LD providers had to enable their PICC selection with local telco’s.  See Comcast Level 3 Peering Dispute (http://www.lightreading.com/document.asp?doc_id=201412&site=lr_cable).  The same forces drive OTT Video and Telephone services.  Netflix, CDN, Net Neuts and SP’s all win; albeit some need to revalue where their core business is.

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