Verizon Considers Buying Netflix | Hacker News Reader

Verizon Considers Buying Netflix

foxbusiness.com

35 pointsdekayed27 comments

I won't hesitate to add "I hope not" because of the obvious implications of Verizon absorbing an otherwise useful service.

It seems disingenuous to portrays Netflix as though it were in legitimate trouble as a business. Netflix has certainly had mishaps and a loss of subscribers; but I don't think that's inclination to suspect that they are looking to jump ship. Selling (and tying) themselves to Verizon would just leave a vacuum for another agnostic service to replace it.

Absolutely not. Data carriers should not be able to supply any content over its pipes. There is already precedent restricting vertical integration -- see the United States v. Paramount Pictures (http://en.wikipedia.org/wiki/United_States_v._Paramount_Pict...).

That would also seemingly invalidate most of the cable TV industry, but in that case, you're arguably paying for the TV feed (which just happens to be carried over cable), rather than the cable itself (which is what you pay for with Internet access). Same argument applies to the public switched telephone network. You're paying for voice service, not the infrastructure; that is why 'data' is a separate line item on your cellular bill.

Verizon already provides cable TV service.

And? As I said -- when you pay for cable TV, you're paying for the TV feed. Netflix is VOD carried over IP. The power company doesn't try to sell you energy-guzzling AC units.

Honestly, I don't see the difference between Cable (video not-so-on-demand) over the FiOS wires and Video on Demand over an IP over the FiOS wires.

Ignoring the huge technical differences, it boils down to net neutrality. Other services could be throttled in favor of Verizon's, much as the carriers were screeching over VoIP apps few years ago.

How is that different from throttling all content-over-ip services in favor of their television service? I still don't see how, with regard to the grandparent's post, providing TV and on demand streaming is different.

They already throttle, to some extent. Bandwidth and speed caps, which may or may not apply to a Verizon-owned Netflix. Then things like preferential QoS come into the picture. Also see the peripheral dispute between Level3 and Comcast, due to the bandwidth imposed by Netflix.

I reckon things will get worse before they get better as more people start cutting all cords except for the Internet.

I don't need phone service, I don't need TV. But I need the Internet. I would prefer if my ISP were simply an ISP (then it could compete solely on the merits ISPs should be judged by), but I will not tolerate it if they try to interfere with my access by squeezing more dollars out of me for services I'd rather get elsewhere.

>you're arguably paying for the TV feed (which just happens to be carried over cable), rather than the cable itself (which is what you pay for with Internet access). Same argument applies to the public switched telephone network.

The main thing being that the associated transmission lines is is intended only to transmit a single type of data. Anyway, I hope the DOJ pays attention.

> Data carriers should not be able to supply any content over its pipes.

So is Google not carrying data during its data rollout? or is search not content?

IMO, that would be questionable in the long term. From what I understand, Kansas City is a network testbed, a novelty in Google's business portfolio. There is no reason to invest in a multi-city network unless it directly supplements G's core business (search, ads) in a big way.

So as long as content adds network as novelty, it's ok. How about when network as novelty? Is that also ok?

You might as well face the issue: Google is exploring vertical integration, as are others.

Would that be similar to the fact that AT&T was not able to sell UNIX back in the days? (Some kind of deal with the goverment to retain monopoly, but not go into different markets)

Might as well read: "Verizon Considers Destroying Netflix"

I'm nervous the only thing good enough for me to pay for on the internet will go away. I will have to spend that $7 on coffee again, I guess.

Verizon is a good partner for Netflix. No product overlap and great synergy. Verizon will get a leg up for the next generation of TV which will sell itself with home and mobile data plans while Netflix will get oodles of capital and improved digital delivery costs. The capital is what Netflix really needs if it wants to spin up premium TV shows at $100 million a pop to compete with HBO. [1]

The DVD business probably doesn't do as much for Verizon. Thankfully that's already profitable and Verizon would be getting it for free after Netflix's failed divorce tanked its valuation.

I don't think antitrust will be a real issue. The courts have been fairly permissive such as with NBC and Comcast. If anything, Verizon and Netflix is more like Comcast and Xfinity.

[1] http://mediadecoder.blogs.nytimes.com/2011/12/06/netflixs-ch...

> great synergy

you don't work for verizon by any chance, do you?

What an awful idea. Netflix had to make some bad deals that it now has to live with. They'd also have to deal with the dying DVD business that has nothing to do with Verizon's business model. They'd likely have to find a buyer for that and spin it off. Maybe that's what Netflix was trying to prepare for with quikster.

Netflix owns nothing. Any exclusivity is small and worth very little. There is no value there. If you're a streaming customer, there's nothing keeping you with them once someone comes out with a competing service at a lower price.

Netflix is a distributor that can easily be replaced by any of the big guys: iTunes, Amazon, Microsoft, etc. If Verizon wants to get into this game, they should partner with a big guy who can build the distribution network for them.

> Netflix owns nothing.

Except for customers and a well known brand.

Customers who have no loyalty.

There's nothing keeping a customer from jumping ship if Amazon creates a similar service at the same or lower price. There's no contract, no setup fee, no hardware that becomes useless with a new provider. They own nothing that's worth buying at anywhere near their current valuation.

Amazon has created a similar service for a lower price.

Amazon Prime gives you unlimited access to a large part of their video catalog. For $79 a year instead of Netflix's $7.99 * 12.

Amazon's service will eventually be similar, if not superior, but right now their limited content keeps them from truly competing with Netflix.

I believe Amazon is simply using this as an opportunity to learn the ins and outs while also ramping up their capacity to stream.

"Citing a source close to the matter" - I wonder how much Netflix stock this source had before leaking the story. Don't hedge funds stir rumor for their own gain?

Seems like this news falls squarely in the "someone's got to" area. Verizon might not be the ideal buyer, but Netflix has run into the dual problems of bandwidth and IP restrictions. They could really use a corporate parent to fight their way through.

Verizon could really help on the bandwidth side, but companies like Comcast, Apple, Microsoft, or Amazon could all help on the IP side.

Aren't they already in the movie streaming business via FiOS?

I would guess that lots of FiOS customers also subscribe to Netflix (and maybe don't understand the FiOS streaming interface). So why not give in and try to capture that?

I hope netflix doesn't commit yet another blunder. Though verizon would benefit enormously by this deal, the end users are at risk of locking in with verizon.

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