Wouldn't the ideal Netflix customer watch 0 hours (thus consuming none of the company's resources) while still paying their monthly subscription? :) OTOH active viewers probably refer more friends and family to become new Netflix customers.
The cost of actually delivering the video was so tiny it didn't matter. To put it another way, you could watch for the entire month continuously and it would make no difference to the bottom line.
The videos were fixed cost licenses, not per view, so it didn't matter who watched it or for how long. The actual cost of sending bits over the wire was trivial.
Truly amazing times we live in!
Actually they do. Just a whole lot of MPEG-PS, several of which multiplexed into a single frequency channel (sometime called transponder channel, even in the context of cable, although the term comes from satcom), and then on the order of hundreds of frequency channels between 100MHz to 1000MHz (roughly speaking, it depends on the regulatory domain, frequency allocations, and doesn't stretch all the way to the limits of the range).
The idea that ISPs bear the cost of Internet traffic which benefits tech companies is at the centre of their agreement against net neutrality, and it's a fallacious argument.
The ISP is free to decide the price and the quality of the service offered. That's how they recoup their costs, by charging their customers the correct price for the service.
What customers pay is an averaged out bandwidth usage from my understanding.
They can, and should, respond by modifying their plans accordingly. Once the consumer's contract is up, renew them with a more modern usage model. Until then, you eat the cost for not doing your only job.
The theory that "we didn't build in a margin of error and therefore someone else is responsible" is dangerous to society.
ISPs SHOULD see losses. Their investors aren't entitled to guaranteed profits.
In Europe, as usage goes up, prices stays flat, because ISPs there know that the cost of a marginal bit of data is almost nothing, and they actually have to compete with each other on customer service and price.
Until you get to that last bit that your wires and equipment can handle. Then it costs a bunch of money to upgrade those to handle the extra traffic.
Cell phone plans have data tiers and pay-per-use. There's no reason cable companies can't do this either, except it prevents them from fudging costs.
I probably use as much bandwidth as anybody else, and I'd prefer to be accurately charged for it rather than have my provider pull shady net neutrality things or try to become an ad network or buy a media company to "bundle" their services or sell my data to third parties to juice their income.
I see both sides. Honestly, I think there was a better argument for it when the heavy users were a small percentage of users downloading a bunch of "Linux distributions" on bittorrent. Today, it's more likely to be a family that uses Netflix a lot.
Metering would change usage for better or worse and the fact is that a lot of domestic phone plans don't have caps, or at least meaningful ones any longer, although they may throttle data at some point.
https://openconnect.netflix.com/en/
It's a smart move really. Netflix saves bandwidth and ISPs save transit capacity.
Might also be the reason Netflix is so good at detecting if you're connecting from a "residential" IP block.
Can an ISP subsidize access to Netflix because they save on transit?
So, are there CDNs without their own racks anywhere?
See "Edge nodes": https://peering.google.com/#/infrastructure
Obviously anyone streaming video, it's different.
I wonder if BBC iPlayer (major streaming service in UK) collocate with ISPs.
Will those servers have a local (to the ISP) IP, or do the Akamai IPs get physically routed to the AS?
Fascinating stuff.
They could also have offer their Encoding System as Services. I upload a video file, sets a few requirements and I get Netflix Quality encoding in return without me fiddling anything.
The Market for CDN and Online Video Encoding that Netflix could get are properly in the sub annual $1B range, may be too small for Netflix to even consider.
I just thought the more traffic passing through those FreeBSD Server the better.
The only thing that matters is peak usage because then you have to buy faster network equipment. If I buy 100MBit internet from my ISP, they basically need to spend, once, whatever 100Mbit of a port looks like, 1/10th of a gigabit port, 1/100th of a 10G port etc. They only have to do that once, yet I pay them every month, they're fine.
ISPs also need a way to get your packets off their network and across to other people’s networks, which are possibly on the other side of the globe. A lot of this is done via peering agreements with other providers, where both parties will agree to connect their networks at a common data centre without charging for data going across that link, but there will still be some data that needs to go across transit providers - these are the companies providing things like transatlantic fibre, or interconnects between different parts of the US. They charge for a pre-agreed amount of bandwidth, and when you burst above that it gets expensive.
These agreements are the core of the net neutrality debate. Traditionally peering agreements would see both parties having a roughly equal amount of traffic going back and forth, however in a world with services like Netflix what you see is a huge amount of bandwidth being used on side of the link. This is why ISPs think Netflix and co should have to pick up the cost of those links.
I don’t agree with that stance since the reason ISPs have customers is often the ability to access those services. However, it’s not quite as clear cut as people make out.
That's price led though, not cost led.
If you want more bandwidth, it's "free" as long as there is room available, otherwise the whole chain needs to upgrade so as not to degrade the service of other customers. On a competitive market, the margins available and the prices should tend to go as tight as possible and the economics will lead to pay for usage.
It would be nice if it was configurable, though. In fact, it might well configurable; I've never really checked, because the current setting is fine by me.
By one accounting standard, yes. By another, if you include the costs of producing Netflix's (actually really great) original content, no.
In other words this was about the marginal costs of delivering content to additional viewers, not fixed production costs.
If that's the case, is there any particular reason Netflix is charging more for access to 4K content, or is it just an artificial increase?
It takes more storage on the CDN box, and also takes more bandwidth on the outbound network port. That means you need more CDN boxes and more hard drives, which means renting more space and power and cooling. Also, you need to be closer to the customer for the 4K video since it's so high bandwidth, so that means more CDN deployments.
You also have to get the 4K video to the CDN, which is more costly because of the extra copies and the large files.
You also have to create all the 4K video files for all the devices, which takes a lot more processing time in the video pipeline.
You also need higher res files from the studio, so of course they charge more for that since it costs them more to move the large files around, store them, and create them in the first place with better camera equipment and editing equipment.
I don't want to get off topic but isn't this the ISP argument __against__ net neutrality? That is, they (and their collective) customers are bearing the cost of delivery, not (e.g.) Netflix.
Net neutrality is about being able to charge both ways.
Regardless, Netflix doesn't bear the cost of delivery. Imagine if USPS couldn't charge Amazon for delivery.
Imagine if USPS charged both Amazon and its customers for delivering the same package.
"Zero tax dollars used. The Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations."[1]
"The USPS in its current form runs like a business, relies on postage for revenue and, for the most part, has not used taxpayer money since 1982, when postage stamps became “products” instead of forms of taxation. Taxpayer money is only used in some cases to pay for mailing voter materials to disabled and overseas Americans"[2]
1. https://facts.usps.com/top-facts/
2. http://www.pbs.org/wnet/need-to-know/five-things/the-u-s-pos...
Replace "USPS" with UPS or FedEx and it comes out to the same thing - either sender pays, or receiver pays, but never both.
There's also the phrase "for the most part."
Finally, USPS is a gov sanctioned monopoly. So there's the cost of that.
I understand what USPS is or is said to (hooefully) be. But all things considered, the taxpayer is paying in some way.
> "for the most part."
This was explained. The government pays to mail voting materials to some people. How is that different from any branch of government buying some stamps to mail some letters and packages?
Their "monopoly" gives them the exclusive right to put things in mailboxes. In return, they are legally required to serve every single part of the country equally, at the same price. They also can't set their own prices.
I have no earthly idea how much this "monopoly" costs taxpayers and it hasn't stopped UPS, Fedex et al from providing plenty of competition. I think taxpayers, especially in remote and rural communities, are coming out ahead in this bargain but again, I'm not an expert.
In any case, none of this has anything to do with net neutrality which is where this discussion began. Pretend USPS doesn't exist - does UPS or Fedex charge the sender and receiver for shipping the same package?
This is about the telcos wanting to double dip.
Are there still people who don't know Netflix? ;)
Do you know if this is common practise or even has a name? Would be interested in reading more discussion around it.