
Netflix and the Future of Television - jfaat
http://www.newyorker.com/magazine/2014/02/03/outside-the-box-2
======
themartorana
Sports - that's the ticket. Comcast remains relevant for two reasons in my
mind - they provide high-speed Internet in a quasi-monopolistic fashion, and
local sports broadcasting. (I live in Philly, the stranglehold on sports here
is palpable.)

That said, even sports apps are starting to show up on Apple TV and the like -
it's just that right now, sports are attached to cable deals, much like HBO Go
is attached to cable networks.

I feel like the "a la carte" unbundling discussion is almost moot. It was an
important idea before, paying for just the channels you want. But now each
channel can have it's own streaming app, and I can pay for and stream them
whenever.

So now I guess it's just a matter of time before someone offers bundled groups
of on-demand app access. Netflix + NFL Network + ABC/CBS + HBO Go... And toss
in Comedy Central for good measure. Add in a $99 Apple TV, and who needs
Comcast and Time Warner?

Oh right. They own the Internet access. I'd really like some net neutrality
soon, please.

~~~
baddox
We're already seeing the beginnings of one possible solution to the "sports on
TV" problem: e-sports and video game streaming. Right now there are several
hundred thousand viewers on Twitch.tv, unless their viewer numbers are
extremely inflated. Video game streams overwhelmingly tend to be free (with
subscriptions to remove ads, unlock the highest video quality, or access
previous video on demand). Many tournaments have top notch video productions,
and are probably produced on a shoestring budget compared to national sports
television productions.

There's no technical reason why non-electronic sports couldn't also be
streamed like this.

~~~
eropple
No technical reason, but it'd probably be a pretty big drop in revenue.

~~~
nknighthb
Why? How much revenue do the teams and leagues get from TV per-viewer now? Why
couldn't they get more by cutting out the middlemen (cable companies and TV
networks) and just get subscription fees directly from viewers, and ad revenue
directly from advertisers?

~~~
nmjohn
In aggregate, billions. It would be impossible to calculate per-viewer. [0]
The thing is, at present they are paid by every cable subscriber, not just the
ones who actually watch the channel. So by switching to the model you suggest,
there are two options, charge the user directly what they were currently
charging the cable company and lose hundreds of millions in revenue because
only a portion of your current viewers will pay you or more likely they will
raise the price significantly.

The other thing is it would mean they would have to build a billing and
customer service infrastructure. At present they only really have a handful of
customers [1] - the cable companies - so it's really easy for them to deal
with that side of things. When you have 300 million subscribers, one of the
biggest problems will be billing and customer service, so prices would further
increase because of that.

I would love to see sport leagues do this. But things need to change somewhat
before there will be any major incentive for it to happen.

[0]: Every league, team, sport is different, probably with different contracts
with every cable company. The average wouldn't be useful at all because you
would have more extreme data points than you would average data points.

[1]: Sure, some networks have online streaming options, but the kind of
customer who has no problem paying the extra few hundred dollars a year for
access are not the ones that will require the major customer support.

------
davedx
I work for one of the big cable companies, and the internal culture seems to
be "innovate, but slowly and carefully". Everybody is fully aware of the
threat Netflix et al pose to the incumbents, but progress is slow. So many of
our resources are spent just trying to minimise costs and maximise revenues,
without really changing the game.

Comcast, for all their flaws, do seem to really care about innovation. I
watched a video about the development of Xfinity X2, and their R&D department
looks like it has insane resources.

It's a very interesting space to be in, on all sides.

~~~
lotsofpulp
What incentive does a cable provider have to progress and become a dumb pipe?
The only value Comcast brings is owning the license to rent a wire that brings
Internet signals to your house. After that, the content creators/curators can
take care of the rest. Of course, being a dump pipe means less profitability,
but it should have already been treated like a utility in the first place,
like in Chattanooga, Tennessee.

It's a huge, profitable, conflict of interest to have your content provider
also be the internet signal provider to your home, and I don't see them
wanting to innovate that away. If anything, their R&D is probably in figuring
out how to box out movie studios and other content providers like
Netflix/Amazon Prime to make their own offerings more attractive.

~~~
VLM
"Of course, being a dumb pipe means less profitability"

If you have a strong, legally enforced monopoly, I'm not seeing this.

Is walmart really less profitable than mom -n- pop main street? If they
aren't, why did mom -n- pop main street all go out of business when walmart
moved in? The future seems to be big dumb profitable pipes and much less
profitable content sources.

~~~
Touche
Walmart isn't a dumb-pipe, for one. A dumb pipe would be electric and water
companies, are those as profitable as cable companies?

~~~
Zigurd
For things like detergent, motor oil, and some categories of food, Wal-mart
offers zero differentiation and lower prices. i really can't think of one
thing where I think "Oh, I have to go to Wal-mart for that." The only reason
is efficiency, and hence price.

~~~
Touche
None of those things constitute a "dumb pipe".

~~~
Zigurd
I don't understand your assertion. Bodega vs. Stop & Shop vs. Wal-Mart to buy
Tide detergent. Wal-Mart adds nothing to the product, but delivers it more
efficiently. That is the definition of a "dumb pipe." Can you explain how
that's not a dumb pipe?

~~~
Touche
Using massive scale and buying power to influence the price of a produce _is_
adding something to the product. Can your electric company do that? No, they
only delivery the product at it's market value.

Also, a pipe doesn't care what travels through it; does Wal-Mart sell every
retail product in existence?

~~~
VLM
"Also, a pipe doesn't care what travels through it; does Wal-Mart sell every
retail product in existence?"

None of the employees you'll ever interact with, with the possible exception
of the pharmacist and optician, will know anything at all about the boxes they
put on the shelves. Thats a dumb pipe.

None of the consumers know or care about how smart the HVAC thermostat is, or
how JIT the truck drivers drop off the next pallet of kitty litter 3 hours
before the store runs out of stock.

Its not an applied technology question. Pipe manufacturing can be fairly
technologically advanced, perhaps for aerospace work or car brake systems.
Xray inspection of welds and fittings, seamless exotic metal alloys. Highly
trained and experienced installers and quality assurance teams. Advanced 3-d
cad to bend and place the pipe just so. None the less, its still fundamentally
just a dumb pipe, stuff pours in one end of the pipe, then it comes out the
other end of the pipe.

------
shmerl
The future should be DRM-free. Netflix are not going in the right direction.
GOG try to break that wall on the other hand.

See
[https://www.gog.com/forum/general/introducing_gogcom_drmfree...](https://www.gog.com/forum/general/introducing_gogcom_drmfree_movies/post499)

~~~
timothya
I doubt that Netflix really wants to be doing DRM. But the simple fact is that
the rights-holders demand it. If Netflix didn't do DRM, then it wouldn't have
any good content on it.

As soon as rights-holders can be convinced that DRM is unnecessary, then we'll
see the internet streamers like Netflix drop it. I'd bet that by the time we
see A-List movies on GOG, we'll be seeing them on Netflix too.

~~~
shmerl
_> I doubt that Netflix really wants to be doing DRM. But the simple fact is
that the rights-holders demand it._

Where is their own content DRM-free?

 _> As soon as rights-holders can be convinced that DRM is unnecessary, then
we'll see the internet streamers like Netflix drop it._

Without someone pushing for it, it will never happen. Netflix clearly don't
care to push for it in the least. So kudos to GOG for actually trying.

~~~
nemothekid
> Where is their own content DRM-free?

What does Netflix gain at this point for instrumenting DRM free streaming for
a small subset of their content rather than just piggybacking off their
current infrastructure? Why add even more to the cost of in-house content for
DRM?

> Without someone pushing for it, it will never happen.

That someone is consumers, not Netflix. And given that the overwhelming
majority of consumers don't care about DRM, Netflix has little incentive to
care about it also - they have enough to worry about with their content well
drying up, and I doubt they are keen on exacerbating that problem by telling
their partners to license their content DRM free. Short of either the
government stepping in and mandating the end of DRM, I don't think will ever
see DRM go away (not to say it won't be hopelessly broken).

All that still doesn't change the fact if Netflix could, they would most
likely drop DRM, if not for all the technical reasons - it would allow them to
distribute on Linux and most likely simplify parts of the content delivery
chain. For Netflix they have no reason to be against DRM free content, but a
ton of reasons to not be _actively_ against DRM.

~~~
shmerl
_> What does Netflix gain at this point for instrumenting DRM free streaming
for a small subset of their content rather than just piggybacking off their
current infrastructure?_

They gain more trust by showing that it's not their intention to use DRM.
Since they don't, they are viewed as liars when they claim that they don't
want to use it. And they very well can be liars. Let them prove their
intentions with actions rather than with empty words.

 _> That someone is consumers, not Netflix._

No, that's false logic. Users of course should push for it too. But you can't
compare the scale. Individuals voting with their wallets are less visible to
publishers than distributors voting with theirs. GOG already demonstrated it.
And that actually feeds the cycle. Once some distributor breaks the wall of
stupidity by making some DRM-free deals with publishers, then more users start
supporting them from those who care about buying it DRM-free.

The bottom line, Neflix are not interesting in fighting that fight. They
oblige insane publishers willingly and their claims that they "have no choice"
don't sound sincere.

 _> Netflix has little incentive to care about it also_

That's exactly the point. So they can't claim that they don't like it. In the
best case they don't care, and in the worst they prefer using it even for
their own content and push for that garbage into HTML standard. Incentive for
caring about it should not come from estimating how many users care about it.

 _> ll that still doesn't change the fact if Netflix could, they would most
likely drop DRM, if not for all the technical reasons_

That's what they say, but no one is inclined to believe them when they don't
do it for their own content as above. There is no technical reason for them to
use DRM where publishers don't demand it. And when they are the publishers
themselves it means they demand it themselves too.

------
paul9290
I miss Aereo and the ability to watch live local broadcast channels on my Mac
Mini.

Copyright recently has killed a few venues online where I was paying to watch
their content. I'd still pay them directly for an Aereo service if they
provided it. I will never pay for Cable TV again .. bloated, over priced junk
in which you have to deal with horrible customer service! No thanks!

I do see Dish is coming out with an over the top cable like service. It's sure
to hobbled at first, but maybe in the long term it will provide a solid
experience.

------
iramiller
I would not be surprised if eventually Netflix is forced to charge different
rates to customers based on their ISP and the amount of shakedown they are
forced to pay for interconnect agreements. It is easy to imagine a base rate
of $8 for Netflix and a $4 Comcast network fee.

After all if Netflix must raise rates to cover these new costs it seems it
would be in their best interests to educate their customers in hopes of
driving lobbying efforts to force common carrier legislation on ISPs.

------
dobbsbob
Surprised "social tv" hasn't taken off more, though I guess people commenting
using twitter during broadcasts kind of killed that idea I liked the pirated
streams that had open chatrooms with just enough moderation to kill spam and
wild political ranting where you could joke about what you're watching, kind
of how taima.tv and JustinTV used to operate.

------
platz
I wonder how long physical media and things like redbox will live on for.. it
seems tempting to say it will die out soon, but at least in the US, we do not
have ubiquitous high-quality bandwidth.

------
vermooten
Netflix has little chance in the UK so long as they have such a dismal choice
of content.

~~~
robert_tweed
This hasn't been the case for a long time, although for some reason it remains
a common misperception. I think it's mainly a marketing problem because people
are always reading comments like this online, or hearing about such-and-such
series that "is on Netflix" but disappointingly isn't currently available in
the UK, while simultaneously being unaware of all the content that is
available in the UK but not in the US.

For example, Netflix UK has the first 2 Hobbit movies, Pixar's Up, the
original Danish versions of The Killing and The Bridge, all of Stargate
SG-1/Atlantis, 24 and The Shield - none of which are currently available in
the US. There's a load more I can't remember off the top of my head. The UK
also got Breaking Bad a few hours after it was aired in the US, whereas US
customers had to wait several months, presumably due to an exclusivity deal
with AMC.

Obviously the UK also gets all the Netflix original content. Occasionally a
new season will launch a few months ahead in the US, but that's not really a
big deal. I can only assume this is done for same marketing reasons that
blockbuster movie launches are typically staggered worldwide.

There are a small number of US shows like 30 Rock and Better Off Ted that I
wish were on the UK service, and Star Trek DS9 is conspicuously absent, but
that list is much smaller than it was 2 years ago.

------
warrenmiller
No mention of torrents or popcorntime?

~~~
m4xm4n
Likely due to the fact that as of yet, no one has found a particularly good
way of monetizing torrents without alienating downloaders. Monetization is a
necessity for industry adoption, so it's hard to tie the future of television
to something like torrenting, unless there's a way for content creators &
licensors to get paid.

~~~
dublinben
Broadcast television has been given away for free since it's inception, and
monetized with advertisements. I don't see why officially-sanctioned torrents
couldn't do the same. Make them high quality, and backed by fast seedboxes,
and you'll outcompete the crappy scene releases that trickle down to public
trackers.

~~~
VLM
"Make them high quality, and backed by fast seedboxes,"

Another option: directors cut type content. So you get 2 minutes extra content
of dubious quality, but there's a 10 second diet coke ad at the start. Well,
you could try to find a torrent of the extra content without the ad, but its
got slower seeds, so you're better off with the diet coke ad...

~~~
drdaeman
> but its got slower seeds

I'm not sure this would be true.

This may work for rarer content, but certainly wouldn't work for hot torrents.
A fast webseeds CDN or whole datacenter of seedboxes is still on par with a
large community-only swarm - that is, except for minor issues (possibly slower
start) they both can well saturate one's downstream channel.

That is, unless one wants the download to start at full-speed right at the
release second and not an hour or two later when swarm gets enough seeds. But
I'm not sure most users care whenever their favorite series get an update at,
say, 18:00 or 20:00.

