This Week in Internet

Here are a few Internet-related items from this week’s news:

  • Every single candidate or incumbent who signed a net neutrality pledge (nearly 100) lost on Tuesday.
  • Cable TV operators, who are also big ISPs, are losing TV subscribers at a record pace.
  • Netflix streaming video is 20% of home Internet traffic between the hours of 8-10 PM, yet only 1.8% of Netflix subscribers use the streaming service.

I wouldn’t be surprised if Netflix were blocked by a big ISP at some point in the near future.

33 replies
  1. 1
    Roivas says:

    Looks like this is a battle we’ve lost.

  2. 2
    doubleosoul says:

    Wouldn’t put too much stock in the Netflix stat, considering the study was commissioned by the company that throttles (or “shapes”, if you’re being diplomatic) Comcast’s traffic.

    They also could as easily “shape” statistics.

  3. 3
    wes g says:

    or similar to iphone users (who use 40% of AT&T’s resources but are only 3% of the users, atleast in 09/09), ISPs might limit the amount of bandwidth a person can use per month. Hell, Comcast already did that.

  4. 4
    debit says:

    Interesting that it’s speculated in the article that cable is losing tv subscribers because of lack of/low income. People can’t afford or justify paying $100 a month for tv (I know I couldn’t), yet the cable companies claim they cannot lower their rates. Following this line of thinking means the only option for profit is to raise the rates again and keep raising them as the customer base continues to shrink.

  5. 5
    Cat Lady says:

    You’d think cable tv would try to deliver more viewing options for the half of the country that isn’t angry and stupid. A handful of hours on MSNBC isn’t enough. I’ve cut down to sports, cooking shows and a very small handful of series like Mad Men and Project Runway that I could watch through Hulu. If it weren’t for sports and one of my local news stations, I’d cut out cable all together. The cable providers can blame the economy all they want, but they really need to look at their content. OTOH, the people who sit and watch TV for hours at a time are angry and stupid, so it’s a bit of a chicken and egg problem for them.

  6. 6

    We still have the slowest and most expensive internet service in the “developed” world. Nothing quite like being fisted by the invisible hand.

  7. 7
    Will says:

    Cable TV operators, who are also big ISPs, are losing TV subscribers at a record pace.

    Maybe they should try firing more popular hosts of lynchpin programs.

  8. 8

    As someone who’s been living without a TV for several years, I agree the problem is not the economy, it’s the outrageous price for cable which is as the Boss said, “57 channels and nothing on.” Why pay for an upgrade to watch half the channels that are even worth watching when I can watch what I damned well please (mostly) via the Internet?

  9. 9
    aimai says:

    Gave up cable and broadcast tv years ago and never looked back. If something is good I wait a year or two and watch it on DVD. We’ve tried Hulu but it doesn’t work well for us–we’ve always blamed comcast (our internet provider). I miss things like Jon Stewart or Colbert but I don’t want to be fitting my life around a TV show anymore, too busy.


  10. 10
    Karmakin says:

    Net Neutrality is a destructive way to deal with a real problem. Ideally, internet providers would be able to prioritize one type of traffic over another, so latency-sensitive applications (VoIP, Gaming) would get priority over non-latency sensitive applications (Browsing, Downloads).

    The problem is that companies would for sure abuse this to pad their own pockets and distort all sorts of markets for their own gain. And this is very bad.

    The funny (sad funny, not ha ha funny) thing here is that it’s a perfect example of exactly where and how the libertarian/ultra-conservative economy breaks down. The effects of monopoly and gatekeeper control can actually create more destructive market distortions than reasonable government regulation.

  11. 11
    KCinDC says:

    Wait a minute, obviously this election was not a good thing for net neutrality, but you’ve taken what was already corporate spin and pushed it even further. Those 95 candidates were challengers trying to pick up blue seats. Where did you get the idea that all NN-supporting incumbents lost?

    Since there were only 3 Democratic pickups in this election, *any* list of Democratic challengers trying to take Republican seats, on *any* issue, would have ended up all or almost all losers. There’s no reason to believe that the public hates net neutrality specifically, and the Ars Technica article you link says as much.

  12. 12
    JPL says:

    If Comcast blocks Netflix, you’ll have a lot of people jumping on the net neutrality bandwagon.

  13. 13
    tammanycall says:

    OT: But Gawker has video on Bill Maher’s critique on the Rally to Restore Sanity.

  14. 14
    Three-nineteen says:

    @aimai: Full episodes of The Daily Show and The Colbert Report are available on Comedy Central’s website.

    (Edited to get rid of weird italics thing)

  15. 15

    Fortunately, both TDS and TCR are available full stream on Comedy Central, usually around 6 a.m. the next day. I still miss quite a few episodes, but I can also go back through and watch interviews or Lewis Black segments from the early 2000s. Funny to relive Stewart interviewing Jonah Goldblargh or Always Wrong Safire.

    ETA: I see I type too slow.

  16. 16
    aimai says:

    Yeah, I know. I should have said that I do watch clips occasionally online of TDS and Colbert. In the summer, when I’m at my parents house, we get into watching them nightly and that’s a whole different investment in timeliness. I find that if I wait past their “due date” I just don’t want to bother and I tend to just watch the clips that other people have posted because they are “too good to miss.” Since I waste similar hours just blogging around the net I can’t say its a sensible trade off. could just as well be watching the whole thing online.


  17. 17

    When I’m watching online, I’m usually also reading a blog in another window. BTW, if anyone is an art lover, you should check out Chuck Close’s interview with Steven Colbert from August. Fascinating description of a medical condition I had never heard of before, and why Close does what he does.

  18. 18
    Paris says:

    We’re getting a Wii for Xmas so we can subscribe to Netflix. If the lack of TV subscriptions continues, I wouldn’t be surprised to see one of the big cable operators buy Netflix some how in the next couple of years.

  19. 19
    AhabTRuler says:

    I have been cable free for about 4 years now, and TV free since the digital switchover, and I don’t miss it at all. I will use internet for political broadcast stuff (I watch CSPAN and let you all describe what the morans are mouthfarting on the other channels; good for the BP), but I haven’t quite gotten in the habit of streaming other things yet.

    Mainly I just listen to music and read books. And, of course, cruise Balloon Juice for Moby Dicks.

    ETA: The motivator for pitching cable was cost, as high-speed internet was more valuable to me than 100 channels of shit. Now, it’s mainly the opportunity cost that keeps me away.

  20. 20
    Dennis SGMM says:

    Netflix streaming video is 20% of home Internet traffic between the hours of 8-10 PM, yet only 1.8% of Netflix subscribers use the streaming service.

    Wow! If Netflix gets much more of their subscriber base to start streaming then many of us are going to be nostalgic for the lightning speed of a 300baud phone modem.

    The ISPs are going to ditch all-you-can-eat pricing sooner rather than later. When less than 2% of a subset of users (Netflix claims 16million total subscribers) can account for one-fifth of the home traffic for a couple of hours every night the ISPs are going to be forced to go to metered usage or some other pricing scheme or they’ll be forced to pass on their costs to all of the subscribers.

  21. 21
    AhabTRuler says:

    And I would theoretically have no problem with metered or pay-go usage of internet, if it were regulated so that it isn’t just another angle on screwing the consumer. I am not confidant that such a state of affairs would obtain, though.

  22. 22

    Yes, the problem isn’t that people might be willing to pay more, but that the price would quickly reach the same price as the cable costs.

    Also, I am not so sure ISPs will ditch the all-you-can-eat model. It’s extremely popular with subscribers. And how much more cost are they eating? The real issue is between the content creators and the distributors. And that will get ugly (as it already has with Fox/Comcast).

  23. 23
    AhabTRuler says:

    @arguingwithsignposts: I am on comcast, and I haven’t come within close to hitting the monthly cap. The time I came closest was when I was streaming the video feeds from the Deepwater ROVs for 10-12 hrs a day, and even then my headroom at the end of the month was significant. So in that respect, I can’t complain too much.

    OTOH, I don’t stream much content or torrent or pretty much anything else that would use large data files. Occasionally I download software, and those files can get pretty large, but even then it is rare enough.

    In the end, I take the best deal I can from the ISP and expect to get screwed one way or the other, without a great deal of power to play one provider against the other. I will grant that Comcast services are generally reliable, but I live in a high-density urban/suburban area where delivering HSI is relatively cheap and easy.

    Also, too, like every other non-regulated utility service, the bill has gone up over the ears (ETA: or possibly years, YMMV) faster than the rate of inflation, which is just a punch in the balls as a whole.

  24. 24
    jakethesnake says:

    I ditched cable and hooked up a PC to my big screen. Works great, but no football. If you try to stream espn3 it actually asks who your cable TV provider is. If you don’t subscribe to a package that gives you the espn3 channel, you can’t stream it on the Internet either.

  25. 25
    Corner Stone says:

    It’s a bit of a fallacy to conclude the people who lost had NN hanging round their necks making them targets.

    Ahh, just read the article and they make similar and more cogent points to where I was going.

  26. 26
    Ditch Digger says:

    I was pretty stoked to finally get Netflix up in Canuckistan here, and at $8.00/month it seemed like a steal. Maybe we have totally different options from it up here, but it is ridiculous what is available to stream, I’d say its about 96% ‘straight to DVD’ type movies, and a whole bunch of A & E programming.

  27. 27

    @Ditch Digger:
    I’m guessing you have a much more limited selection than down here, but it ebbs and flows.

  28. 28
    The Main Gauche of Mild Reason says:

    I’m not sure I believe that statistic on Netflix user who stream. I think the own company’s surveys suggest that 60% of their users use the streaming service. And, umm, I would tend to believe the company’s own statistics more than wherever those came from.

  29. 29
    Eric k says:

    Ditch Digger,

    Down here the latest studio blockbusters generally aren’t available to stream, but tons of TV shows are, lots of foreign movies, classic movies and Independant stuff, and even some studio movies are starting to show up, when it first started there were almost none.

    The other thing I’ve noticed is stuff will come and go, the studios seem to out up their back catalog for a set amount of time, then take them off and eventually bring them back, kind of how Disney does DVD releases

  30. 30
    Mnemosyne says:

    Okay, not being very techie, I’m probably going to screw this up, but isn’t our “bandwidth problem” actually an infrastructure problem? They use a whole heck of a lot more bandwidth in other countries, but they have the infrastructure to handle it. When you look at the internet speed in, say, Australia, we look pretty goddamned pathetic in comparison.

    Of course, getting better internet infrastructure would require private companies to actually invest in it, so it ain’t gonna happen. They’d rather raise our rates and make us keep fighting for the crumbs than actually improve the delivery system.

  31. 31
    Martin says:

    I think this is going to change next year. Sides are drawing up:

    Hulu users would wait a lot longer to catch up on their favorite shows, if Dish Network VP of Online Content Development and Strategy Bruce Eisen had his way. “If I can watch Glee tomorrow morning and I don’t have to pay a pay TV service –- I think that’s bad,” Eisen said during a panel about cord cutting at the Streaming Media West conference this morning.

    And a big clue gets dropped:

    At the D8 Conference, Jobs said, “The problem with innovation in the TV industry is the go-to-market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us … ask Google in a few months. The television industry fundamentally has a subsidized business model that gives everyone a set-top box, and that pretty much undermines innovation in the sector. The only way this is going to change is if you start from scratch, tear up the box, redesign and get it to the consumer in a way that they want to buy it. But right now, there’s no way to do that … . The TV is going to lose until there’s a viable go-to-market strategy. That’s the fundamental problem with the industry. It’s not a problem with the technology, it’s a problem with the go-to-market strategy … . I’m sure smarter people than us will figure this out, but that’s why we say Apple TV is a hobby.”

    Apple is opening up ad offices in many major cities. The go-to-market is the iPad/iPhone/AppleTV. Revenues will come from video ad-inserts.

    Netflix in its current form has a limited future. Unlimited streaming at $9/mo doesn’t generate enough revenue to produce new shows. The cost to produce new content is pretty high, and someone has to pay. The cable market worked well for a while, but as people unplug for other options (like Hulu) it’s collapsing. That’s part of the reason that cable news has gotten so bad – they’re having to chase specific demographics and offer more non-news programming (more opinion shows) to get viewers and ad revenue.

    I think by next year the cable revenues will have collapsed enough that online, on-demand, ad-supported broadcasting will work. And enough people will have iPhones and iPads or be willing to drop $99 for an AppleTV (in exchange for dumping their cable bill) that Apple will be able to sell the networks on it. I don’t see any other solution for the networks.

  32. 32
    Martin says:

    @Mnemosyne: Well, the question is always how it gets paid for. Most of the early bandwidth came from the phone carriers, but there’s only so much you need for audio, and once they had that, they stopped building. Cable picked up from there because video needs a lot more bandwidth, and they’re carrying most of the load now. Your cable rates are what pays for that infrastructure, but the last mile problem is a big one – getting that bandwidth into every house is really expensive, particularly in rural areas.

    Wireless is likely to take over that problem. China and parts of Africa simply skipped the ground bandwidth problem and went straight to wireless. Lay fiber to a central location for a community and then beam the rest of the way. The new spectrum rules from the FCC promise to catch us up on this front, but competition is what’s been killing the US market. You’ve got Verizon and AT&T out there building fully redundant wireless networks. We spend 2x as much as we need to, and the technical benefits of one over the other aren’t that great.

    What the government should do is mandate a single wireless standard and have a competition for what it should be. Let all the players bring their new technology in, run tests on bandwidth, speed, range, power, cost. Declare a winner, and then use a bidding process to have companies build this out, and then lease bandwidth (regulated) to the market. Competition isn’t lost, but duplicated costs are, and service is improved. The teatards would go crazy over that, however, but it’d help the carriers with their build-out costs, which I would think they’d welcome. The government could also take care of the NIMBY problem that they all face – where communities keep rejecting towers. They could hand that entirely down to state/local governments, but it’d no longer be a zoning/land use kind of issue.

  33. 33
    blink says:

    Just out of curiousity, would it even be legal for an ISP to block Netflix? It’s a subscription service. Denying access to it would basically be stealing from customers, wouldn’t it?

Comments are closed.