Media companies, carriers aim to pick your pocket

Multifront war on Netflix will cost customers plenty, for little benefit

By  

Using Netflix as an excuse, carriers are lobbying hard for tiered pricing and new content controls that will increase their revenues, protect them from competition and hurt customers in both business and consumer markets.

Now content companies are planning to squeeze more money out of Netflix and other disintermediators in an effort to get a little of their own back, at the expense of customers who will pay higher fees to each of the parties involved.

According to the carriers and, to a lesser extent content companies like Time Warner and Starz, multimedia streaming providers like Netflix, YouTube, Skype and others are ruining the Internet.

Not only are they clogging the Internet's pipes with the kind of content that doesn't make carriers money, they're distributing content in ways that don't bring the kinds of profits content companies would like.

The FCC vote will come Dec. 21. The agreement is expected to pass.

Comcast's overt effort to throttle Netflix traffic flowing through its network is a good example of how carriers respond to resource-intensive services their end-user customers want -- punitively.

On the other end of Netflix' content stream, content providers like Time Warner, Starz, Soney and Disney are reevaluating Netflix as a partner and reportedly planning drastic increases in the amount they charge it for content that, for the most part, has been produced, paid for and partly amortized before Netflix viewers ever see it.

The result on the content side will be huge increases in Netflix' costs, which it will pass on to customers by raising subscription rates.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question