Why You Cost Netflix Money

Netflix Comcast DealComcast extorts money from Netflix. There is no other way to put it. The moment Netflix agreed to Comcast's demands to pay additional fees to avoid delays they gave into a monopolistic extortionist. That may be overstating it because Comcast is not breaking the law in any way. To suggest they are violating the antitrust laws to protect against monopolies would also suggest that the Department of Justice is compliant in the crime. As they are the Department of Justice and in a sense decide what crimes are prosecuted they can't possibly be complicit. If they were they just say they weren't and then they wouldn't be. Yes read that sentence a few more times before you move on.

Add to that the fact that Comcast has just agreed to buy Time Warner cable and you get a situation where Netflix can either pay additional monies or get their streaming videos throttled to the point where they simply cannot be watched. If you think that is an exaggeration is not. So are these prices, or price gouging if you will, going to be passed along to the customer? The answer from Netflix is no. While this may change in the future it appears as if Netflix is going to stick by their clients and make sure that this terrible deal doesn't affect them.

This Comcast-Netflix deal is going to revolutionize business relationships on the Internet. In the original model in users would purchase bandwidth from providers who would in turn send them data. The greater the amount of data, or more specifically the amount of time a user was connected to the Internet, would affect how much they would pay at the end of the month. In the late 1990s this began to change as providers began to sell "all you can eat" Internet packages where users could pay a flat rate for unlimited Internet access. This was fantastic for the end-users, and at the time good for providers. Unfortunately the providers had no idea how quickly data consumption would grow over the coming decade. Cisco Systems claims that the Internet in 1997 carried 100 GB per hour in total. By 2007 this had increased to 2000 GB per second. Currently there is no accurate estimate to have a data is being transferred throughout the Internet, however that number is so great as to make any measurement useless.

Cisco Systems also claims that 57% of all consumer traffic in 2012 was strictly video. This is expected to increase to 69% by 2017. Right now the Internet traffic of today is dominated by video for two reasons. It is in extremely high demand and difficult to deliver by way of comparison of other day. Ever see a little spinning will when you clicked on a YouTube video? This is a combination of extreme congestion, traffic over the same video, and quite possibly your Internet service provider throttling down on the service. Which is no big deal because you don't pay for you to. It's a pain but is not paying your paying for. Netflix is a different issue altogether.

Internet providers do indeed have the capacity to serve YouTube and Netflix traffic in the amount required. This is for one simple reason, they actually paid to build this infrastructure. In the past they would've simply pass the cost on to the end user by charging per megabit or per hour connected. Now with every access account being unlimited access this is no longer possible.

If in the future providers charged for traffic or time, the end-user would be faced with even more data plans and services that they would need to choose from. It would be unclear which one would be required, and in the and people would be paying for more expensive plans and in need. Especially if it is subscribed to Netflix or watch video on the web.