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Forums » Netflix: $.05 to Deliver Movie Stream? » Here's why they can get away with it
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It's cheap... »
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Eat Me

join:2002-09-25
Sussex, NJ
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Here's why they can get away with it

The HD selection right now is very limited, and I believe it's that way on purpose. So people will not be streaming that many HD movies. SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.

Most people also have caps so they're not going to be streaming 24x7.

This whole streaming thing is simply a way for Netflix to boost subscriber numbers for its regular DVD service. Some people don't even put DVDs in their queue making it even more profitable for netflix.

I was a netflix sub from 2001-2004. I stopped it because I didn't have that much time to watch movies and 3 movies was just too much. I resubscribed when TiVo got it and even got blu-ray access. Without the streaming option I would have probably not gone back to Netflix in such a hurry.


Matt
Take me down to the paradise city
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join:2003-07-20
Jamestown, NC
·North State Commun..

said by Eat Me See Profile :

SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.
Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...

Regardless, what the article illustrates is that as bandwidth consumption goes up, the cost per bit goes down. Not the other way around as most people would have you believe.


Neyland

join:2003-02-04
USA

I agree all the non HD content we've watched has been DVD quality. We've actually been very pleased with the service, if only the selection were a bit better.

But, considering it's free on my TIVO and the Netflix service costs about the same as a premium channel like HBO, I call it a win.


BF69

join:2004-07-28
Camden, TN

reply to Eat Me
said by Eat Me See Profile :

The HD selection right now is very limited, and I believe it's that way on purpose. So people will not be streaming that many HD movies. SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.

Most people also have caps so they're not going to be streaming 24x7.

This whole streaming thing is simply a way for Netflix to boost subscriber numbers for its regular DVD service. Some people don't even put DVDs in their queue making it even more profitable for netflix.

I was a netflix sub from 2001-2004. I stopped it because I didn't have that much time to watch movies and 3 movies was just too much. I resubscribed when TiVo got it and even got blu-ray access. Without the streaming option I would have probably not gone back to Netflix in such a hurry.
Get away with what? The streaming is an ADDED feature. It's not like you pay for it separately. Also as the OP said this doesn't include licensing fees.

The bigger question is that if netflix only pays 3¢ per GB how come ISPs want to charge $1 or more per GB overage? And the 250 GB cap that Charter and Comcast have only costs them $7.50 are they telling me it's cost them nearly $60 to provide everything else associated with an internet connection? Hardly. One also has to wonder how mobile companies can get away with $256 and $503 per GB overage fees.


Matt
Take me down to the paradise city
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join:2003-07-20
Jamestown, NC
·North State Commun..

reply to Neyland
said by Neyland See Profile :

I agree all the non HD content we've watched has been DVD quality. We've actually been very pleased with the service, if only the selection were a bit better.

But, considering it's free on my TIVO and the Netflix service costs about the same as a premium channel like HBO, I call it a win.
You sound like me. I still have all the newest stuff come in on DVD/Blu-Ray, but love firing it up to watch older content. I read a review one time that said something along the lines of it being perfect for "Curling up on the couch for a rainy weekend of movie watching." I'd agree that is a great use for it. Especially since it's free!


DataDoc
My avatar looks like me, if I was 2D.
Premium
join:2000-05-14
Greenville, NC
·Suddenlink

reply to BF69
said by BF69 See Profile :

...The bigger question is that if netflix only pays 3¢ per GB how come ISPs want to charge $1 or more per GB overage? And the 250 GB cap that Charter and Comcast have only costs them $7.50 are they telling me it's cost them nearly $60 to provide everything else associated with an internet connection? Hardly. ...
Maybe they'd like to pay their employees, rent and other "overhead", and maybe even show a profit for their stockholders.


Eat Me

join:2002-09-25
Sussex, NJ
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reply to Matt
said by Matt See Profile :

said by Eat Me See Profile :

SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.
Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...

Regardless, what the article illustrates is that as bandwidth consumption goes up, the cost per bit goes down. Not the other way around as most people would have you believe.
Just out of curiousity, what kind of TV are you viewing it on? I'm using a 56" DLP. DVDs are noticeably better. It's not bandwidth related because I get all of the SD quality bars and I have a 30 meg connection.

It could be that:

I'm using a 56" HDTV

I'm using an upconverting DVD player for DVDs (Sony)

Or it could be that I haven't watched a SD movie in a while. I know they've had some really bad encodes in the past.


Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..

reply to DataDoc
said by DataDoc See Profile :

said by BF69 See Profile :

...The bigger question is that if netflix only pays 3¢ per GB how come ISPs want to charge $1 or more per GB overage? And the 250 GB cap that Charter and Comcast have only costs them $7.50 are they telling me it's cost them nearly $60 to provide everything else associated with an internet connection? Hardly. ...
Maybe they'd like to pay their employees, rent and other "overhead", and maybe even show a profit for their stockholders.
Have you seen the price of NFLX lately?

Ytsejamer1

join:2008-01-18
Somersworth, NH

reply to Matt
Agreed...the value to me as a Netflix customer is great. I love watching movies from their streaming site. Works fine for me and looks decent enough. The added value it offers me for the Netflix monthly charge is so very well worth the $16 or whatever it is.


Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..

reply to Eat Me
said by Eat Me See Profile :

said by Matt See Profile :

said by Eat Me See Profile :

SD has a wider selection, but I've watched a few movies in SD and they border on unwatchable. I would rather just wait for the Blu-Ray in the mail.
Your experience with SD is not the norm. SD quality is very good, DVD like for me and most reviewers. The quality will auto-adjust itself down to horrible based on your connection however ...

Regardless, what the article illustrates is that as bandwidth consumption goes up, the cost per bit goes down. Not the other way around as most people would have you believe.
Just out of curiousity, what kind of TV are you viewing it on? I'm using a 56" DLP. DVDs are noticeably better. It's not bandwidth related because I get all of the SD quality bars and I have a 30 meg connection.

It could be that:

I'm using a 56" HDTV

I'm using an upconverting DVD player for DVDs (Sony)

Or it could be that I haven't watched a SD movie in a while. I know they've had some really bad encodes in the past.
I watch on a 42" plasma mainly. I also have an upconvert DVD player as well as a Blu-Ray player. The quality really is very good, but I have noticed that some movies just suck. Deep Blue Sea is a great example ... but I think it's because the source material is crap. I even had them send me the DVD because the stream quality was pretty bad, but the DVD was actually WORSE.

It seems the newer stuff that is added is great quality, but once you start getting into some of the first online offerings the quality goes downhill. I wonder if at some point they started encoding with higher quality or a better codec?


Eat Me

join:2002-09-25
Sussex, NJ
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1 edit
reply to BF69
said by BF69 See Profile :

Get away with what?
Get away with offering the streaming as an added free feature.

quote:
The bigger question is that if netflix only pays 3¢ per GB how come ISPs want to charge $1 or more per GB overage? And the 250 GB cap that Charter and Comcast have only costs them $7.50 are they telling me it's cost them nearly $60 to provide everything else associated with an internet connection? Hardly. One also has to wonder how mobile companies can get away with $256 and $503 per GB overage fees.
Firstly, LLNW is a caching service. It's not an ISP. You either upload content to them or they fetch it once from an "origin" server (i.e. your webserver) and serve it to multiple users.

As for the L3 bandwidth, the bandwidth charge isn't the whole cost. You have to pay for the circuit as well which isn't cheap. It's much more than the $40-$150 you pay for a residential connection. The last time I ordered a T1 (which is only 1.5Mbps) we paid around $500/month and that's with a 2 year contract.

Besides, ISP cappage is for one reason and one reason only - to discourage you from using your connection beyond a certain amount. The "overage" charges are punitive.


BF69

join:2004-07-28
Camden, TN

reply to DataDoc
said by DataDoc See Profile :

said by BF69 See Profile :

...The bigger question is that if netflix only pays 3¢ per GB how come ISPs want to charge $1 or more per GB overage? And the 250 GB cap that Charter and Comcast have only costs them $7.50 are they telling me it's cost them nearly $60 to provide everything else associated with an internet connection? Hardly. ...
Maybe they'd like to pay their employees, rent and other "overhead", and maybe even show a profit for their stockholders.
and they can do all that just fine and offer a higher cap. Also doesn't justfiy $1 overages. If each GB cost $3 then charging 10¢ per GB pays for that overage AND makes them a nice profit.

let's have fun with math.

Charter 10 Mbps tier is $45 a month with 100 GB cap. Now I'm assuming they are selling this for at least break-even. But I'm sure they don't LOSE money on this tier. Charter 20 Mbps tier $65 with 250 GB cap. So that extra 150 GB cost Charter $4.50 Yet they charge $20 extra. Or for that extra $20 they could offer an extra 666 GB and not lose money. In other words they can pay costs make money for stockholders and themselves and still offer higher caps. Especially since as they claim only 1% go over the current caps anyways. So really they wouldn't be losing hardly anything.


Eat Me

join:2002-09-25
Sussex, NJ
reply to Matt
Could be just the older encodes then. I remember Pirates of the Caribbean Dead Man's chest was simply unwatchable. Realplayer back in 1999 would have been better.


BF69

join:2004-07-28
Camden, TN

reply to Eat Me
said by Eat Me See Profile :

As for the L3 bandwidth, the bandwidth charge isn't the whole cost. You have to pay for the circuit as well which isn't cheap.
And my ISP already PAID for that circut. It's not like offering a higher cap means the circut that they ALREADY paid for costs more.

It's much more than the $40-$150 you pay for a residential connection. The last time I ordered a T1 (which is only 1.5Mbps) we paid around $500/month and that's with a 2 year contract.
That's YOU as an individual. Companies get volume discounts. Do you think that when you pay $1000 for a TV at Wal-Mart that THEY paid $1000 for it? I know for a FACT that on many items they pay 1,5 or even 1/10 what they charge the customers. So to think that Comcast or Charter is paying the same rate as YOU is rediculous. And ever think you are geting butt raped on that? You probably think it actually costs the cell phone companies 20¢ to send text messages

Besides, ISP cappage is for one reason and one reason only - to discourage you from using your connection beyond a certain amount. The "overage" charges are punitive
Yes discourage using thing like Netflix, Amzon etc and use thing like their overpriced PPV option. Yes now the REAL reason emerges.


funchords
Hello
Premium,MVM
join:2001-03-11
Washington, DC
·Verizon Online DSL
·Skype

reply to Eat Me
said by Eat Me See Profile :

Could be just the older encodes then. I remember Pirates of the Caribbean Dead Man's chest was simply unwatchable. Realplayer back in 1999 would have been better.
I wish these streaming video outfits would actually try their products on different connections. They might work in the lab, but on a very latent 3G or satellite connection, they often suck rocks.
--
Robb Topolski -= funchords.com =- World Traveller -- KJ7RL
... Do something! ...


Eat Me

join:2002-09-25
Sussex, NJ
It's not my connection:



Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..

said by Eat Me See Profile :

It's not my connection:


Speed doesn't mean jack. You could have horrible routing to Netflix but not that speedtest server. Run TCPView while streaming a Netflix movie, figure out if you are being routed across the country or not. They have servers in CA and WDC I believe and a LOT of people are routed to the CA servers rather than the WDC servers.

I've watched Dead Man's Chest btw and it's one of the best quality SD movies they have. I bet you are being sent across the country.


Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..

reply to funchords
said by funchords See Profile :

said by Eat Me See Profile :

Could be just the older encodes then. I remember Pirates of the Caribbean Dead Man's chest was simply unwatchable. Realplayer back in 1999 would have been better.
I wish these streaming video outfits would actually try their products on different connections. They might work in the lab, but on a very latent 3G or satellite connection, they often suck rocks.
It should work fine on a satellite connection once the stream starts. 3G is a different story though, although I have a friend who can watch SD content on his 768Kbps RR connections ... although it is borderline.

I really don't think this service is aimed at the small percentage of 3G home users or satellite users.


Eat Me

join:2002-09-25
Sussex, NJ
·PenTeleData
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reply to BF69
said by BF69 See Profile :
And my ISP already PAID for that circut. It's not like offering a higher cap means the circut that they ALREADY paid for costs more.
But YOU didn't pay for the circuit. You are paying below $100 for a residential connection.

quote:
quote:
It's much more than the $40-$150 you pay for a residential connection. The last time I ordered a T1 (which is only 1.5Mbps) we paid around $500/month and that's with a 2 year contract.
That's YOU as an individual.
No, that's me ordering for the (large fortune 500, multinational) company. I don't have that kind of money to order a T1 for my house. In fact I don't even know if Embarq would sell me one (they probably would, but I never asked.)

quote:
Companies get volume discounts. Do you think that when you pay $1000 for a TV at Wal-Mart that THEY paid $1000 for it? I know for a FACT that on many items they pay 1,5 or even 1/10 what they charge the customers. So to think that Comcast or Charter is paying the same rate as YOU is rediculous. And ever think you are geting butt raped on that? You probably think it actually costs the cell phone companies 20¢ to send text messages
Exactly. Which is why YOU as an individual won't be paying 3 cents per gig as big companies do.


Matt
Take me down to the paradise city
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..

reply to Eat Me
said by Eat Me See Profile :

Firstly, LLNW is a caching service. It's not an ISP. You either upload content to them or they fetch it once from an "origin" server (i.e. your webserver) and serve it to multiple users.
Yes, but they still have bandwidth costs and they have to pass those back to their customers to make money. So indirectly that is part of Netflix's bandwidth cost.
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Forums » Netflix: $.05 to Deliver Movie Stream?It's cheap... »
« You're missing the point...  
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