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Streaming Wars: Netflix Traffic Gets Throttled By Broadband Companies, Leading To "Unwatchable" Results
For years, the Netflix streaming business has been growing like a parasite, happy to piggyback on established broadband infrastructures, where the broadband companies themselves have becomes competitors to Netflix for both distribution and content. Until now. Emboldened by the recent Net Neutrality ruling, which has put bandwidth hogs like Netflix which at last check was responsible for over 30% of all downstream US internet traffic...
... broadband providers are finally making their move, and in a preliminary salvo whose ultimate compromise will be NFLX paying lots of money, have started to throttle Netflix traffic. The WSJ reports that the war between the broadband-ers and the video streaming company has finally emerged from the "cold" phase and is fully hot.
Netflix Inc. subscribers have seen a lot more spinning wheels lately as they wait for videos to load, thanks to a standoff deep in the Internet.
The online-video service has been at odds with Verizon Communications Inc. VZ and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees.
Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon's fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14% last month. The slowdown comes as Netflix is rolling out the new season of its Emmy-winning series "House of Cards."
Not surprisingly, Netflix wants broadband companies to hook up to its new video-distribution network without paying them fees for carrying its traffic. But the biggest U.S. providers—Verizon, Comcast, Time Warner Cable and AT&T Inc. —have resisted, insisting on compensation.
And while there is no legal basis with which Netflix can be pushed to pay for traffic, backbone companies are quietly putting the squeeze on the House of Cards maker where it hurts most: watching enjoyment.
Until the standoff gets resolved, the bulk of Netflix's traffic continues to flow across Internet intermediaries, including low-cost carrier Cogent Communications Group Inc. People familiar with Cogent's and Netflix's thinking say the cable and telephone companies are delaying upgrading existing connections. Executives at major broadband providers, meanwhile, privately blame the traffic jam on Netflix's refusal to distribute its traffic more efficiently.
Netflix said it carefully plans its routing to make sure customers have the best experience possible. Verizon said it treats all Internet traffic equally. Neither side is budging, people familiar with the matter said, leading to growing congestion.
The result is that the speed of NFLX traffic is crashing, something which will make watching its High Definition content increasingly more unpleasant as buffering times mean more time sitting watching spinning circle, and less time watching content.
The end result: "unwatchable programming":
The bottleneck has made Netflix unwatchable for Jen Zellinger, an information-technology manager from Carney, Md., who signed up for the service last month. She couldn't play an episode of "Breaking Bad" without it stopping, she said, even after her family upgraded their FiOS Internet service to a faster, more expensive package.
"We tried a couple other shows, and it didn't seem to make any difference," she said. Mrs. Zellinger said she plans to drop her Netflix service soon if the picture doesn't improve, though she will likely hold on to her upgraded FiOS subscription.
She and her husband thought about watching "House of Cards," but she said they probably will skip it. "We'd be interested in getting to that if we could actually pull up the show," she said.
Netflix acknowledges the sluggish performance, though spokesman Joris Evers said that "generally our members are able to watch Netflix, albeit perhaps at a lower quality and with potentially some startup delays at the busiest times of day."
Verizon has a policy of requiring payments from networks that dump more data into its pipes than they carry in return. "When one party's getting all the benefit and the other's carrying all the cost, issues will arise," said Craig Silliman, Verizon's head of public policy and government affairs.
Ironically, as described above, it is the broadband companies that end up the winners from the NFLX throttling, even as subscribers give the streaming company a chance, then promptly cast it away after a month or so of unwatchable results.
What happens next is that subscribers, unhappy with the throttled distribution whose download speeds will keep declining over time, switch over to competing services - there certainly is an overabundance of those. And in a world in which Amazon can burn through endless cash and be rewarded by the idiot market, it is only a matter of time before broadband companies preferentially reward Jeff Bezos at the expense of putting Netflix ultimately out of business. At which point they can redirect their attention to Amazon Prime of course, and repeat the entire process once more, unless of course Amazon itself hasn't become the dominant (and money-losing of course) broadband provider by then.
As for Netflix' relentless parabolic stock price action: good luck with that particular house of cards.
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Net Neutrality is the last domino between us and corporate supported dictatorship.
When a disproportionate amount of the market capitalization of the 'industry' is vested in firms that haven't put even as much as a dime of infrastructure into the ground, and just run a few glorified FTP servers, its no surprise that infrastructure isn't being upgraded at the pace that the Netflixes of the world would like. This situation will not be resolved until the telecom's see their fortunes (and prices) go up substantially.
Until an ISP can guarantee the bandwidth a customer is paying for , Net Neutrality will be the only solution. The whole idea of Net Neutrality came about because ISP's claimed the "nature of the technology" prevented them from guranteeing the internet speed sold to subscribers.
What you mention is only the excuse of the monopolistic ISPs. The real problem is that these ISPs want to control what is flowing in their network, to gain more control over what their customers can see and untimately extort more money from content suppliers and customers who have no real alternative.
Right now they want to charge two times for the same service: Their customers already pay them for using their network. So the customers who have a NetFlix subscription has already paid their ISP for access to Netflix. But these ISPs now want Netflix to pay again for the same network usage.
But this is only the start. If we allow ISPs to block or limit access to specific content providers we are going down a wery dangerous road. If we go down this road, nothing can stop these ISPs from for example blocking access to ZeroHedge, if this blog tries to warn investors that the ISP's stock is overvalued. The first victims of this will probably be websites calling for network neutrality, just like almost all websites critical of blocking/filtering software tend to be blocked by vendors of blocking/filtering software.
And from there is can only get worse. It would be obvious to block access to "unauthorized" political speech, or even established political speech. How would you feel if you tried to call your congress member, and your heard an automated message "This is your phone company. The congress member you tried to reach is REPUBLICAN, and we only allow calls to DEMOCRATIC congress members. This is not unconstutional, as you can always write a letter to your REPUBLICAN congress member, or try to find a phone company that allows calls to REBUBLICANS"?
Apple TV has the same challenge. I get broadband for free so not an issue for me but I don't see why the broadband providers shouldn't be able to control the pipes- they own them.
Is this not just the Copper Rule: he who owns the copper makes the rules.
You want cheap Netflix? Get Netflix to build their own network.
We pay for cable internet, why does netflix have to give internet providers any compensation?
Ok so you want to pay more for your internet then, so Netflix users can hog down all the downstream bandwidth? Dish out the cash buddy.... I think it's amusing that people think that internet is unlimited like mana from heaven. The reason why internet companies throttle is because there is too much bandwidth usage. You must think they throttle simply because they are assholes..... Sounds like a typical socialist mentality. Clearly you don't know how the internet works, or how bandwidth is produced, yet you comment on such subjects as if you know what you are talking about.
Dip shit, cable is a monopoly and We the People own the infrastructure.
Stop being a industry tool. Better yet, just go move to Somalia so you can experience the Free Market in full action.
You have no idea how the internet works. Go read up on it. Do you even know what throttling is? Throttling is to slow your bandwidth speed so you don't download as much in a given period. Net Neutrality prevents pay for content, so internet companies will throttle or put caps on download speed, or even shut down the bandwidth temporarily. If there was abundance of internet that was costless, then nobody wouldn't be charging for internet at all. You even lack logic. All you have is name calling, bashing the free market, and pointing out monopolies are bad. That alone shows you are clueless on the the subject at hand...
When I pay for "internet access", I want internet access according to the plan I pay for. It would be unacceptable for me to denied access to certain sites just because my ISP wants to charge the site I try to access for the privilege of being able to send me the information I request.
If you feel different, feel free to enter a different contract with your ISP. But do not be surprised if some day you will be unable to access ZeroHedge because this free blog cannot pay your ISP.
The question of network neutrality pops up all around the world from time to time. But only in places where the ISPs have a near-monopoly. You may ask why? Well, what would you do, if you could freely choose between many ISPs competing in a free market, and one of these started blocking or limiting access to sites you want access to?
This is no different from a phone company telling you that you cannot call some phone numbers because the people with those phone numbers will not pay your phone company.
Then again you simply neglecting the costs. Net Neutrality does not prevent monopolies. I have no idea where you got that from. If you read the article, internet companies are indeed preventing people from viewing Netflix, so your point is pointless. Obviously you have a disconnect between costs and providing the service.
Then again you simply neglecting the costs. Net Neutrality does not prevent monopolies. I have no idea where you got that from. If you read the article, internet companies are indeed preventing people from viewing Netflix, so your point is pointless. Obviously you have a disconnect between costs and providing the service.
Opps Zerohedge server problems sorry for the multiple posts. They reposted because of refreshing the page... Sorry about the mulitple posts.
Then again you simply neglecting the costs. Net Neutrality does not prevent monopolies. I have no idea where you got that from. If you read the article, internet companies are indeed preventing people from viewing Netflix, so your point is pointless. Obviously you have a disconnect between costs and providing the service.
Bill Burr? Is that you ???
http://market-ticker.org/akcs-www?post=228658
the real story here up on that graph is that bittorrent is responsible for over 1/3 of all uploaded bandwidth on the internet.
distributed sharing , while not 'profiteable' is shaping behavior because it's powerful. people want it and it's 'rent' free.
sharing--is caring. and that is the future of the internet's business models. long after netflix dies a horrible death, people and businesses will be using advanced distributed protocols for sharing many types of datafeeds and torrent files on the net. THAT is the story. it's happening as we speak.
How to destroy Netflix, Hulu, Amazon Demand etc and return people to cable TV usage in one fell swope:
Require Al a Carte programming on cable.
You don't like sports? No ESPN. Only ESPN viewers pay for ESPN. Not black? No more BET. Only BET viewers pay for BET.
No more paying for 250 - 500 channels you don't like nor watch in order to get one you do like.
Rinse and repeat. Watch how many channels die, how many startups with quaility programming appear.
Cable TV packages are socialization for Hollywood.
Let us force them to produce quailty in the marketplace in order to be paid.
they have a "prepared" script regarding Ala Carte: "Its just not possible" fucking lying greedy bastards....btw does the cable company BUY/lease channels or do the channels pay the cable company to show them? if you want to watch 20 out of 80 channels-you should be able to.....and the rates still rise
The users of Netflix are the bandwidth hogs, but the cable companies would face terrible PR if they tried to charge their customers for heavy use. Therefore, cable companies try to charge Netflix which in turn charges higher fees for its movies and passes those higher fees on to its customers. Cable companies indirectly get what they want. Higher $ from their customers.
I don't do cable, I do Netflix via PS3 over Internet wireless. Works pretty good most of the time.
This is why I don't stream. When I used to, I was at the mercy of Cockmast and whenever they feel like throttling my connection. Even SD streams sometimes were unwatchable because of the constant buffering, even though other times HD streams worked fine. That unpredictable behavior pissed me off just a little too much. It was fine a few years ago when most sites had a visible buffer bar and you could wait for the whole video to download, but they have since gotten rid of that...
These days I just download everything, and watch it without any buffering later.
I don't watch tv at all including netflix. I spend the money I save clubbing!
http://news.cnet.com/8301-1035_3-57619072-94/is-pcell-the-holy-grail-of-...
meh. Bittorrent. Encrypted transfers. So far they sneak through.
Watch your COMCAST rates skyrocket after they are allowed to buy Time-Warner Cable.....Anonymous -we need you!