In a recent Facebook post, Netflix CEO Reed Hastings had some inflammatory things to say about media giant Comcast.
"I spent the weekend enjoying four good internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu," Hastings said.
"When I watch video on my Xbox from three of these four apps, it counts against my Comcast internet cap. When I watch through Comcast’s Xfinity app, however, it does not...The same device, the same IP address, the same wifi, the same internet connection, but totally different cap treatment. In what way is this neutral?"
For those of you who may not know: Comcast residential customers are limited to 250 GB of bandwidth usage per month. Exceed that cap and you might face a temporary ban on your Internet access or a reduction of your available speed until a representative resets it. Violate these terms twice in a six-month period, and the company will suspend you from receiving its services for a full calendar year.
But how could somebody possibly exceed 250 GB in a calendar month?
All major media content is switching to HD--which consumers want, and which occupies an enormous amount of bandwidth to stream. Just one movie or TV show of Blu-ray HD quality (720-1080p) can consume 6 to 12GB depending upon its runtime. Decide to stay in one weekend and catch up on a TV series you missed, and you may gobble up as much as one-third of your monthly Internet usage.
Back to Hastings, who went on to say: "Comcast is no longer following net neutrality principles," and should either "apply [bandwidth] caps equally, or not at all".
Net neutrality is the belief that Internet service providers shouldn't restrict their consumers' digital access based on the content, sites, equipment or methods of communication they use.
Hastings might have a point here. Comcast is rolling out "Streampix," its new, Xfinity-branded digital content delivery system that will solidify its claim to a share of the streaming entertainment market. Unlike Netflix, which is subject to Comcast bandwidth caps, Streampix usage is not applied towards its customers' monthly download limits.
This effectively allows Comcast to provide its own programming content--which has increased considerably after its merger with NBC/Universal--at a better rate of speed, and without usage caps.
Comcast defends this policy by claiming that since its service is brought to customers via its privately owned network, and not the normal public internet bandwidth, the company is well within its rights to limit.
So if a customer is already getting streaming movies and TV shows from his cable provider as an add-on service, why pay the additional money to Netflix? With the recent failure of its Qwikster service (alongside a very poorly-timed rate hike), and now this direct competition from the vendors that provide the pipeline across which its services are carried, the company is looking for other ways to diversify its revenues.
Recently, Netflix has broken into the original programming market, committing to serialized dramas featuring actors like Kevin Spacey and Steve Van Zandt, a horror series from Eli Roth, and even committing to a new season of Arrested Development. Such exclusive content like this might be just what it needs to attract and retain subscribers, particularly if it's the only place to see cult TV shows that were previously cancelled.
All of a sudden the unwiring movement seems a lot less attractive.