On Netflix and Qwikster
Posted September 26, 2011 @ 11:38 am
A quick overview:
- Netflix thinks the future of media distribution is streaming.
- Major cable companies control a huge portion of broadband connections in America.
- The same cable companies make a lot of money from cable TV subscriptions.
- Those subscriptions are in direct competition with companies like Netflix.
- Netflix just split its streaming and DVD-by-mail businesses into two companies.
It’s no surprise that these broadband/cable TV providers have been slowly constricting the amount of bandwidth users have for doing things like streaming media from companies like Netflix and YouTube. It’s clearly anti-competitive, and it puts Netflix’s business model in jeopardy. They’ve been betting on streaming for a while despite the reaction from broadband providers.
Here’s a thought: As long as Netflix continues to operate as a business that streams media while providing DVDs, these broadband companies can argue that any charge of anticompetitive behavior is silly because Netflix still relies on physical media. Splitting the companies makes Netflix’s argument stronger.
Qwikster can’t complain to the government about bandwidth restrictions; the new Netflix can.
