[opendtv] Re: Punching Above Its Weight, Upstart Netflix Pokes at HBO - NYTimes.com

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Sat, 22 Feb 2014 11:04:06 -0500

On Feb 21, 2014, at 7:19 PM, "Manfredi, Albert E" 
<albert.e.manfredi@xxxxxxxxxx> wrote:
> I doubt it. I think the difference would be that TWC would make Netflix easy 
> to get to the TV set attached to their STB. Most likely, using their own 
> proprietary type of VOD service. What you describe, just adding the Netflix 
> fee to your cable bill, seems too trivial a change for even the pundits to 
> mention.

It is already easy to get OTT services to your TV. TW would need to do one of 
two things.

1. Add the ability to access OTT services to their STBs via a broadband 
connection; they do not have the bandwidth on the video side of their business 
to handle the bandwidth requirements of Netflix, nor are their current boxes 
capable of decoding OTT services, which DO NOT use MPEG-2. So logically they 
would do what Comcast is already doing by expanding the capabilities of the 
boxes they lease to customers.

2. Allow third party STBs to attach to their video services, as the rumors 
suggest they were talking to Apple about. This would likely require some form 
of software DRM to access the walled garden 

> Yup. Like Amazon, Hulu (for some content), Hulu Plus, Netflix, ... Point 
> being, you're still in that MVPD-dependence mindset.


Nope!  You do not need a MVPD subscription to access ANY of the OTT sites you 
mentioned. These are all subscription services in their own right, and as such 
they require usernames/passwords to access their service; they DO NOT ask for 
your telco username/password.

What I asked, is if you can uses your Telco  login to access the OTT sites that 
are linked to a MVPD subscription - like Watch ESPN, HBOGo, et. al.

Don't bother answering - you can't.
> The content owners are moving beyond it. You still think that the MVPD 
> username/password is the only way to get the "best" content, because you 
> aren't reading the tea leaves. CBS is *already* accepting Amazon Prime, for 
> instance, when providing some of their online offerings that aren't FOTI.

Amazon Prime is a subscription service. It costs $79/yr. CBS offers many 
programs through Prime, as they do through Netflix.

> What's not the case? Are you saying that MVPDs charge Netflix more than 
> others, so that they can force their subscribers to use HBO instead?

We are not talking about the MVPDs per se here. We are talking about the 
end-to-end paths through which bits travel from servers to ISP customers; the 
MVPDs just happen to be the dominant suppliers of high speed broadband. 
Specifically we were talking about Peering agreements, which ISPs enter into to 
move bits from one service to another at major WAN hubs. Verizon is at an 
impasse with Netflix, and is currently slowing down bits though these hubs.

> What I said is, net neutrality would still be assured, AS LONG AS whatever 
> extra charges are applied to Netflix are applied equally, in a 
> non-discriminatory manner, to any heavy-duty capacity hog. And sure, if this 
> increases the price Netflix has to charge, so be it. At least, there will be 
> competition, as opposed to the way it works now in MVPD tiers.

Net neutrality is not assured. At this very moment Verizon is slowing Netflix 
traffic.  And we cannot predict what the FCC, or the congloms will do moving 
forward...

I whole heatedly agree that fees associated with peering arrangements shoul be 
applied equally to all heavy bandwidth users. Many OTT services are already 
paying "fees" to the CDNs, that provide edge servers that largely eliminate the 
heavy traffic through the WANs.

> Yes, that part is true, as far as it goes. You're saying, the congloms PREFER 
> to keep any more competition away. But that's also hiding one's head in the 
> sand. The Internet exists, plenty of material is becoming available on it, 
> cord cutting is a real phenomenon, there are plenty of households in the US 
> and elsewhere that don't have or want MVPD subscriptions, so it's certainly 
> foolish, long term, to remain stuck in the 1980s, eh?

We've been through this many times. It IS NOT foolish to use the business model 
that maximizes revenues for both the content and distribution congloms. 

You can raise this argument again when less than half of U.S. Homes subscribe 
to a MVPD service and the rate of cord cutting is measured in millions, not 
thousands per year.

> Wow, you do enjoy your circular arguments, eh Craig?

I'm not sure I enjoy arguing with you, although it does serve a good purpose! 
But you are the king of circular arguments; your last post, which I am 
responding yo one is a classic example.

> We already went through that. The content owners are thinking way beyond 
> where you got stuck, Craig!

Yes Bert, the content owners fully understand hoe to game a system in which 
distribution. Technologies have evolved over the past six plus decades. They 
learned their lesson with the Betamax case, and turned what they feared into a 
new business opportunity. They are doing the same with the Internet, and will 
protect their cash cows until they figure out how to make the Internet work for 
them. 

Here is one of many reports about entertainment industry growth:

https://www.techdirt.com/articles/20120129/17272817580/sky-is-rising-entertainment-industry-is-large-growing-not-shrinking.shtml

> Yet, what we find when looking through the research -- from a variety of 
> sources to corroborate and back up any research we found -- is that the 
> overall entertainment ecosystem is in a real renaissance period. The sky 
> truly is rising, not falling: the industry is growing both in terms of 
> revenue and content. We split the report up into video & film, books, music 
> and video games -- and all four segments are showing significant growth (not 
> shrinking) over the last decade. All of them are showing tremendous 
> opportunity. The amount of content that they're all producing is growing at 
> an astounding rate (which again, is the most important thing). But revenue, 
> too, is growing. Equally important is that rather than consumers just wanting 
> to get stuff for free, they have continually spent a greater portion of their 
> income on entertainment -- with the percentage increasing by 15% from 2000 to 
> 2008.

Regards
Craig

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