Posts Tagged ‘net neutrality’

Media as the conservative heart

Steve Benen wonders why conservatives are so adamantly opposed to codified net neutrality:

I suppose it’s possible that these Republicans are just deeply confused, have absolutely no idea what net neutrality is, and are spewing nonsense just to rile up right-wing activists. It’s also possible these Republicans know the truth, but are shamelessly lying as part of a larger campaign to scare unsuspecting conservatives about a “big government” bogeyman.

But it’s worth appreciating the fact that the rhetoric from prominent GOP voices really is unhinged. Sen. Jim DeMint (R-S.C.) insisted that “unelected, unaccountable Democrat [sic] FCC commissioners are taking over the Internet.” Incoming House Speaker John Boehner (R-Ohio) called the policy “another government takeover.” Sen. Kay Bailey Hutchison (R-Texas) told a national television audience yesterday, “[W]e’re starting to see the FCC say, ‘You have to come to us to get permission to manage your own website.'”

This is complete nonsense, of course, and it’s not even the kind of complete nonsense you might get by taking reality and spinning it. It’s the kind of thing you might get if, in Benen’s formulation, you knew nothing about the policy other than that liberals like it, and that you hate liberals. But it’s also the kind of position you might reach if you see the 1987 abolishment of the Fairness Doctrine as central to the rise of the modern conservative movement. Indeed, a Google search for “net neutrality” and “fairness doctrine” comes up chalk-a-block with right-wingers equating the two policies and warning of the imminent government takeover of online speech — one notable exception, by Art Brodksy, points out that the policies are actually quite opposite.

Those conservatives who see media as the life’s blood of their movement (correctly, I’d say) ultimately trace its origin to talk radio, and conservative talk radio really took off once the Fairness Doctrine was gone. Net neutrality — and broadly speaking, the Internet itself — is a much more complicated concept than broadcast technology and the old equal time rules, and I wouldn’t expect most political operatives to understand what it means or what it does. But if you give any random conservative two heuristics — liberals like it, and it gives government “power” over some communications medium — they’re going to oppose the policy.

Filed: We R in Control || 22:30, December 25 || 1 Comment »

Movies should be free as in markets

Next week, Netflix will be added to the S&P 500, while the New York Times Co. will be dropped, which is being seen as (altogether, now) a sign of the times. But the cozy business model Netflix has set up for itself — backing into a streaming media business that now outweighs its physical disc business, due to industry and consumer ignorance at the time the original deals were struck — may be on the way out. Despite having rebuilt the video rental business in its image, Netflix faces two major challenges in the near future.

The first is that their original licensing deals are about to start expiring in bulk. Studios were willing to sign over streaming rights quite cheaply back when there was no streaming market to speak of; they won’t be so eager now. For one thing, the booming market for streaming content makes those rights much more valuable than they once were. This is particularly true as non-PC media consumption devices — video game systems, netbooks, tablets, phones — become more and more a part of consumers’ TV- and movie-watching habits. But on top of that, Netflix isn’t doing anything with their streaming business that the studios don’t think they could do themselves. Indeed, this is the entire rationale behind Hulu — why let Amazon or Apple take a chunk out of a one-time sale, or Netflix take a chunk out of the subscription fees? Anyone can put bandwidth and storage space together, right? This is a simplistic take, of course, which ignores the ability to build a working business model, to create a functional user experience, etc., but those are in some ways ancillary to simply having a lot of content already on hand. Hulu even manages to start eroding the one major advantage Netflix has over any studio-operated competitor, which is that it doesn’t just have one studio’s content. If any major studios decide to walk away from Netflix, the difference in content availability becomes narrower.

Meanwhile, just as Netflix is using streaming as a way to hedge their bets on the future of postage costs, the future of bandwidth costs is uncertain, as well. When a major ISP decides to seriously challenge the de facto doctrine of net neutrality, Netflix is likely to be an early target. They’re a major user of bandwidth, and unlike some of the other likely targets — YouTube, Hulu, ESPN — they don’t have the backing of a giant company (that is, giant relative to S&P 500-member Netflix) or of a company with an existing relationship with the cable companies that dominate the ISP sector. Similarly, when a major ISP decides to go to metered usage — as many wireless carriers have already done — Netflix is going to suffer. If your $7.99/month “unlimited” streaming plan from Netflix requires you to add $30/month to your cable bill to get all the bandwidth you need, it suddenly becomes a lot less attractive.

The common denominator here is that Netflix has opened up a potentially huge new revenue stream for the movie and TV industries, and the existing power-players have a lot of incentive to shove their way in. They might enter as competitors, they might insert themselves as middlemen, but one way or another, they’re coming.

Filed: aka Syscrusher || 10:05, December 12 || No Comments »

It’s not TV, it’s TCP/IP

A new study by Sandvine indicates that Netflix alone accounts for about 20% of prime-time bandwidth usage in the United States:

That’s just Netflix; all streaming media combined account for 43% of non-mobile Internet traffic. Considering the pushes being made by Hulu and (especially) ESPN, that stands to grow significantly, and it presents a tremendous wrinkle to two big issues on the landscape of corporate media: the decline of the mass television audience and the debate over net neutrality. On the former, the TV networks have suffered eroding viewership since the mass adoption of multi-channel subscription television services (i.e., cable) began in the early 80s. They’ve hedged their bets by investing heavily in niche cable channels (even if the niches are often not so niche, like SyFy and its wrestling shows) and now by launching streaming and download services, most notably Hulu. Apparently people are responding. The business model is still a little unclear, and will almost certainly involve the networks using Hulu to make a power play against Netflix, but Netflix has a huge member base to stand on, as well as relationships with movie studios that have much different incentive structures than its relationships with TV studios. Perhaps its something Netflix can leverage into becoming a less chaotic version of YouTube — subscription-based access to original, independent content that’s organized and reliable could be extremely attractive.

While its got one eye on the TV networks, Netflix also needs to watch out for Big Bandwidth. As long as net neutrality remains unassured — and there’s certainly no legislative guarantee coming any time soon — Netflix is in danger of being extorted for packet delivery. It’s not as big as YouTube (i.e., Google) or as well connected as Hulu (i.e., most of the big media corporations); it’s potentially right in the crosshairs for a neutrality challenge by any of the big cable providers who are also some of America’s biggest ISPs. Coincidentally, these are also some of the companies being affected most of the drop in TV viewership. I wonder what might happen if one of these companies — say, Comcast — were to try to buy one of the big TV networks — say, NBC Universal? That’s an organization that would have a lot of incentive to go after a company like Netflix, and at least two powerful positions from which to do so.

Filed: aka Syscrusher || 20:28, November 8 || No Comments »