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Netflix to the living room likely to elevate net neutrality issue, says analyst

Jun 10, 2008 9:32 AM

             

The Netflix announcement May 20 to offer movies on a subscription basis over the Internet via set-top boxes to living room TVs will likely blow the cap off the net neutrality issue as broadband usage skyrockets and competitive pay-TV providers seek to protect their interests, according to The Diffusion Group.

In a statement to the media following the Netflix announcement, Michael Greeson, president and principal analyst, of The Diffusion Group, said the numbers tell the tale. Consider:

• 8.2 million Netflix users already have “a billing relationship” with the company;
• the 10,000 titles currently available on Netflix’s Watch Now PC-based service will now be available for TV viewing via the set-top box;
• existing subscribers don’t have to pay any additional fees for the service, they simply pay $99 for the Roku-manufactured set-top box, which may be discounted; and
• the Netflix subscription model is an “all-you-can-eat” approach to its library of Watch Now titles, not a one-off rental as with Apple TV, Vudu or CinemaNow.

“When established video distributors such as Netflix start to push subscription-based digital video rental models into the living rooms of millions of consumers … the lid will be taken off these previously ‘capped’ forces, thus exposing consumers, carriers, content creators, distributors, and regulators to stand up and take notice,” said Greeson.

For more information, visit www.thediffusiongroup.com.

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