Lessons Of Broadband Net Neutrality For TV Content Owners

Traditional TV distribution systems are closed systems that not every wannabe network can get on. Proposed networks need to prove themselves. They might come from a big network group with a track record; have a killer idea that cable operators realize will bring in big customers; or a concept, like high-profile sporting events, that allows cable operators to sell premium advertising.

But with the Internet, everything is open, in theory. Anyone can start a website or digital area. Then, if they dare, they can pump out lot of high-data video content.

Netflix has been doing this for some time -- perhaps too well. Many analysts say that, during prime times, Netflix can account for 30% of all U.S. broadband usage.

In a groundbreaking pact, Netflix agreed to pay a separate fee for a more direct broadband connection to Comcast.  The deal came about because Netflix customers were getting lots of buffering messages and other interruptions in their video content.



In a recent blog, Netflix CEO Reed Hastings explained why the company wants to make such deals:  “When we do so, we don’t pay for priority access against competitors, just for interconnection. A few weeks ago, we agreed to pay Comcast, and our members are now getting a good experience again.”

In essence, Netflix doesn’t believe it should have the upper hand -- just an even hand. Traditional TV networks already have this even hand through channel position. All they need to do to be successful is to be, um, successful.

Many wannabe TV/video content providers would like equal access in getting on traditional delivery systems. It would be one step towards the democratization of TV/video.

With current TV systems -- cable, satellite, telco, or over-the-air -- no one thinks about the volume of usage for each network.  No one considers that some aggregated amount of programming might equate to a higher data level than for other programming/network blocks.

Does a cable network’s schedule full of reruns versus original programming mean a lower level of data transmitted to viewers? Do higher-cost original dramas and comedies mean a higher level of data then lower-cost reality series? Nope. It’s all equal.

The end result comes down to consumers’ point of view.

When they watch an “Arrested Development” episode on Netflix and it gets interrupted, they do not think that Netflix needs to pay more so that they can get a better experience. When they watching “NCIS” on CBS via their DirecTV service and there is a slight picture breakup, they do not think about the cost of satellite communication glitches.

But, soon, as sophisticated viewers figure out how much they want to consume and purchase premium TV content, they might need to recognize more of these industry intricacies.

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