Posted on 11/25/2010 4:24:51 AM PST by abb
In a matter of months, the movie delivery company Netflix has gone from being the fastest-growing first-class mail customer of the United States Postal Service to the biggest source of streaming Web traffic in North America during peak evening hours.
That transformation from a mail-order business to a technology company is revolutionizing the way millions of people watch television, but its also proving to be a big headache for TV providers and movie studios, which increasingly see Netflix as a competitive threat, even as they sell Netflix their content.
The dilemma for Hollywood was neatly spelled out in a Netflix announcement Monday of a new subscription service: $7.99 a month for unlimited downloads of movies and television shows, compared with $19.99 a month for a plan that allows the subscriber to have three discs out at a time, sent through the mail, plus unlimited downloads. For studios that a few years ago were selling new DVDs for $30, that represents a huge drop in profits.
Right now, Netflix is a distribution platform, and has very little competition, but thats changing, said Warren N. Lieberfarb, a consultant who played a critical role in creating the DVD while at Warner Brothers.
For the first time, the company will spend more over the holidays to stream movies than to ship DVDs in its familiar red envelopes (although it is still spending more than half a billion dollars on postage this year). And that shift coincides with an ominous development for cable companies, which long controlled home entertainment: for the first time in their history, cable television subscriptions fell in the United States in the last two quarters a trend some attribute to the rise of Netflix, which allows consumers to bypass their cable box to stream movies and shows.
snip
(Excerpt) Read more at nytimes.com ...
Not to mention that some new exploit appears every week which allows traffic to be hijacked through routers in China, DNS queries to be spoofed...some of the choke points aren’t even intentional.
BINGO! That's why I subscribe. Netflix rocks, no way around it. It lets me support excellent content directly, and starves the evil beast networks.
Of course they’ll try. The Holy Roman Church tried in 1500. Printers were ‘licensed’ in the early days. The FCC came along and got in the middle of radio and tv programming last century.
But I maintain that every effort so far made to throttle the interweb thingy has met with spectacular failure.
Music downloads. Porn. Mainstream movies. “They” tried stopping all that stuff back when the internet was new and had much less popular usage (and corresponding political clout) than today.
Yet at this very moment the world wide web is more ubiquitous, and with more content of ALL descriptions more widely available to more people than ever before.
And it will be more so tomorrow and the day after tomorrow.
I am not sure of the actual numbers on video or music transfer.
I’m not a video guy, I’m more a read news and argue politics guy.
Yet at this very moment the world wide web is more ubiquitous, and with more content of ALL descriptions more widely available to more people than ever before.
And it will be more so tomorrow and the day after tomorrow.
There will be lots of problems will electronics of all description. There will be many, many deaths. War will be waged.
But we weren't discussing war, we were addressing political control of the web.
Netflix’ change to the internet is also putting the final bullet in the postal service as well. Just think - the ability to kill off three major industries (tv, Hollywood and the post office) all in one swoop.
Information flow is what toppled the Soviet Union, IMO.
Dismantling Utopia: How Information Ended the Soviet Union Scott Shane
Ivan R. Dee, Chicago, 1994, 324 pp.
Chapter 3: What Price Socialism? An Economy Without Information
Pp. 77-78
My informal survey suggested that some of the longest lines in Moscow were for shoes. At first I assumed that the inefficient Soviet economy simply did not produce enough shoes, and for that reason, even in the capital, people were forced to line up for hours to buy them. Defitsit, shortage, was a workhorse of colloquial Soviet speech. The adjectival form, defitsitny, had become a term of praise, since everything desirable was in short supply: Look at this pottery I found its very defitsitny. So they needed to make more shoes, I figured. Then I looked up the statistics.
I was wrong. The Soviet Union was the largest producer of shoes in the world. It was turning out 800 million pairs of shoes a year twice as many as Italy, three times as many as the United States, four times as many as China. Production amounted to more than three pairs of shoes per year for every Soviet man, woman, and child.
The problem with shoes, it turned out, was not an absolute shortage. It was a far more subtle malfunction. The comfort, the fit, the design, and the size mix of Soviet shoes were so out of sync with what people needed and wanted that they were willing to stand in line for hours to buy the occasional pair, usually imported, that they liked.
At the root of the dysfunction was the states control of information. Prices are information the information producers need in order to know what and how much to produce. In a market for product as varied in material and design as footwear, shifting prices are like sensors taped to the skin of a patient in a medical experiment; they provide a constant flow of information about consumer needs and preferences. When the state controlled prices, it deprived producers of information about demand.
The shoe factory boss churned out shoes to meet the Plan, a production quota set by bureaucrats who reported to Moscows hulking Gosplan, the State Planning Committee. The shoes were priced according to arcane formulae by another gos-institution (for gosudarstvo, state), Goskomtsen, the State Price Committee. The shoes were distributed by another beefy bureaucracy, Gossnab, the State Supply Committee. If the shoe factory boss was smart, the might produce 10 percent over plan, wind himself a bonus, and be named a Hero of Socialist Labor. But as far as the consumer was concerned, the factory manager operated in the dark, without any information from the market, without feedback.
Indeed, the factorys real customer was the state, not the consumer. The state purchased all the shoe factorys production, good, bad, or indifferent. The consumers choices were not allowed to enter into the matter. So, driven by the tireless efforts of the shoe factory hero and those like him, gross national product might rise and the Politburo might express satisfaction at the obvious economic progress. But on the street the picture looked less triumphant: many stores had bins of clunky shoes sitting around unbought, while down the street hundreds of people sacrificed their mornings waiting for imports.
The vague impression in the West that the Soviet economy was merely an enfeebled version of a Western economy was inaccurate. It was a different beast altogether. It was dreadfully inefficient, stubbornly resistant to change, but capable of huge feats of production. The statistical yearbooks, with their selective but impressive tables of Comparison with Leading Capitalist Countries, proved as much.
The shoes Soviet industry produced might end up in a landfill, but comrade, it could produce shoes.
Don’t look for the concept (intellectual property) to fade away very soon. Facebook is now trying (and is predicted to succeed) to get a patent on the word “face” (at least as far as websites are concerned).
A couple of years ago the Supreme Court declined to consider the case of Metabolite, which has the “right” to patent YOUR genes. For more on this see http://www.michaelcrichton.net/essay-nytimes-thisessaybreaksthelaw.html
The intellectual property maze is going to become a lot more confusing (read “ridiculous and unfair”) as time goes by.
Where there is money to be gain, fair play goes out the window.
I’ve got lots more research to do on this, but back in the olden days, the post office actually served as a domestic spy agency for government or the king.
Off to the in-laws for Thanksgiving. Look forward to resuming this debate this evening. Thanks to everyone for the input!
Allowing off hours downloading of movies should be a discounted service. Let those who need it now pay full price. It would make sense and maybe reduce the load.
They charge you the rate they do based on expected network usage. If people start using the network differently then the system will bog down.
Here is a good analysis of the Netflix problem: http://market-ticker.org/akcs-www?singlepost=2226192
If you haven’t read this, you should.
It’s a starfish world and most people don’t even realize it.
http://www.starfishandspider.com/index.php?title=About_the_Book
DSL service over a land line, 3G maybe. You don’t need cable to watch Hulu.
Don't forget HBO, SineMax, Showtime, etc. In order to watch their movies, you have to pay for their porn and leftist original propaganda.
“But I maintain that every effort so far made to throttle the interweb thingy has met with spectacular failure.”
This isn’t like a printing press. This IS controllable by government if they choose to do so. It is inherently possible, and doesn’t take a technical leap to do it.
Our intelligence agencies likely already do this for foreign traffic.
So it will happen unless it is stopped by the political process, or failing that, more active means. As long as they don’t completely cut off internet and movie streaming, the populace won’t riot......
How is Netflix taking advantage of the ISPs?
They pay millions every month for their outbound bandwidth and Netflix customers pay millions every month for inbound bandwith. If the ISPs need to build up their infrastructure, then it should fall on the ISP’s customers. Netflix is already paying for big “pipes” at their end.
It isn’t Netflix’s problem that ISPs have consistently over-promised and under-delivered.
I watched my first downloaded movie back in May or so, when I first signed up and there was no interruption. I don't know if that answers your question but it's what happened.
...or the 1000s of miles of dark fiber across the country will be lit up to take the strain off the infrastructure, whichever you prefer.
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