One way the cable companies will attempt to be relevant in this “net neutrality” world is to become the largest Internet providers in the business.
That was one of the scares behind the proposed Time Warner Cable-Comcast merger: That it’d own so much bandwidth that it’d charge higher pricing for customers and squeeze out content providers like Netflix.
Well, now Netflix is getting into bed with them. Netflix and Comcast announced a deal to ensure Netflix’s content is streamed smoothly to households, clearing away the problem that Netflix users feared: That Comcast and other cable companies would choke the Internet flow so your Netflix watching experience would be a frustrating experience. Now, Netflix is essentially buying Comcast’s bandwidth.
Netflix raises its price
What won’t make Netflix watchers happy is the increased price. Now, Netflix hasn’t said it will raise subscription costs, but you can bet that it will. Money rules and consumers may get squeezed from both sides: Comcast charging more for its Internet service and Netflix doing the same for its services.
The interesting part for me is what happens to Netflix’s competition. In reality, everything that comes across your TV screen or iPad is a competitor, even YouTube. But where does this put Amazon or Hulu? Will they be able to afford paying off the Internet providers to increase the bandwidth it uses? Will they start their own IP services?
Even more interestingly, what does this do for the cable networks themselves? The power of Time Warner Cable/Comcast will result in a kind of monopoly in which cable channels like ESPN and AMC will have to pay greater fees.
The result of the Netflix-Comcast deal also means channels will have to pay more for bandwidth to stream to its apps, such as HBO GO or FX NOW.
Not that long ago, we fingered the cable companies for becoming increasingly irrelevant and it started to happen. Quickly.
But now the cable companies are responding. By being the bully and owning – or charging for – everything.