from the well-that's-great dept
To me, that seems like a broken system.
by Mike Masnick
Fri, Oct 2nd 2015 6:21am
by Karl Bode
Tue, Sep 15th 2015 6:11am
"No aldermen voted on this tax. It never went before the Chicago City Council, which makes the so-called 'Netflix tax' an illegal tax," Jeffrey Schwab, an attorney with the Liberty Justice Center, said in a news release Thursday. "If the city wants to tax Internet-based streaming media services, then it should put the measure through the political process, and let Chicagoans have their voices heard through the democratic process."Should Chicago's plan even survive the lawsuit, it remains unclear how the city plans to collect the tax. Would it demand that Netflix and Spotify tax users themselves, even if they have no physical presence in the city proper? Would Chicago residents be required to report this revenue (which they either won't do, or would hide behind VPNs)? Chicago's just one of many cities taking this controversial tack as traditional revenue runs dry, creating an absolutely mind-boggling legal minefield for new economy companies suddenly facing an ocean of discordant and often logically and legally inconsistent attempts to tax the cloud.
by Karl Bode
Thu, Sep 10th 2015 9:31am
"We hear from our members that you wish we had newer movies. So do we. Studio licensing practices means it often takes more than a year before consumers can watch a theatrically released movie when and how they want. Just like we’ve changed the game for TV watchers by releasing entire seasons around the world at the same time, we have begun making movies that will premiere on Netflix globally and in some cases, simultaneously in theaters. It will take us time to build a robust slate of original movies, but we’re hard at work on it with such great stars and directors as Brad Pitt, Ricky Gervais, Judd Apatow, Angelina Jolie, Sofia Coppola and Adam Sandler."And yes, while some Netflix content (House of Cards, Bloodlines and hopefully soon one of my favorites, Black Mirror) is great, it's not entirely clear that more Adam Sandler movies are the answer for users frustrated at the growing lack of popular options in Netflix's B-grade heavy content catalog. And while licensing does certainly hamstring Netflix, in this instance both Hulu and Amazon didn't find Epix's asking price too severe, meaning that Netflix made a judgement call and decided this content was content that its customers can live without.
"I think it’s something that lots of people ask for. We’ll see if it’s something lots of people will use. Undoubtedly it adds considerable complexity to your life with Amazon Prime – you have to remember that you want to download this thing. It’s not going to be instant, you have to have the right storage on your device, you have to manage it, and I’m just not sure people are actually that compelled to do that, and that it’s worth providing that level of complexity.”Of course that's crap: letting people store a local copy of a film isn't remotely complex. What's complex is explaining to consumers why such functionality would likely cost Netflix significantly more in copyright licensing fees and layers of mandated DRM deployment. As we've noted previously, Netflix is still transitioning from a DVD rental business governed by the first sale doctrine, to a streaming business governed by the permission winds of countless fickle media empires. Communicating the costs of that transition to consumers clearly and honestly certainly isn't easy, but much like its Qwickster snafu of a few years back, it's entirely possible that Netflix could be pushing too far, too fast.
by Karl Bode
Wed, Sep 9th 2015 6:12am
"More than one-third of today’s expensively rolled-out bandwidth already is consumed in peak hours by a single company, whose customers represent a tiny minority—about 1.2%—of Internet users. Richard Bennett of High Tech Forum calculates: “If 12 percent of the Internet user population is streaming at prime time, the traffic load goes up to 340% of today’s level; and if it rises to 60%, the load goes up to 1700%.” And suppose users want super-high resolution 4k TV, which requires four times as much bandwidth as today’s hi-def?"Generally Netflix traffic stats are trotted out to imply that Netflix is somehow consuming too much of the overall pipe, or isn't paying its fair share to deliver this traffic, which as we've pointed out for years is total nonsense. It's quite simple: users who pay their ISP for bandwidth are requesting this data, which Netflix (who also pays for bandwidth) then sends to them. Insatiable mega-ISPs honestly believe a bigger cut of this revenue is their god-given right; as such, they work tirelessly to get it, whether it's via usage caps or interconnection fees.
"Make no mistake: The bandwidth used by Netflix is paid for. But it’s paid for inefficiently, by spreading the cost over all broadband subscribers. In the airline industry, if backpackers and grannies had to pay for the frequent connections, last-minute seat availability and other features demanded by business travelers, there would be fewer planes, fewer flights, less connectivity, less travel for everyone—which is a fair model of the future that utility regulation will now create for broadband users."It's impossible to even deconstruct that argument because it actually makes no coherent sense. One, as we've explained at length, ISPs are not now facing "utility regulation" under the new neutrality rules. Two, under the current Netflix model, ISPs are paid for the bandwidth (sometimes several times over), and customers pay for the content they want. Is it actually possible to get any more efficient than that without involving telepathy? Jenkins, however, is clearly annoyed that the government has stepped in with rules preventing the Comcasts of the world from erecting totally unnecessary tolls on the Internet:
"Unfortunately the entire confused and inane thrust of federal Internet policy lately has been to sustain the Netflix distortion. Even collecting token amounts, as Comcast did, for expanding direct peering to receive the Netflix deluge apparently now will be verboten. And forget about the elegant fix of usage-based pricing, i.e., charging each customer according to his demand on the infrastructure. It’s clearly a nonstarter with regulators and activists."Poor fellow! How does Jenkins sleep at night knowing that the government won't allow Comcast to impose completely arbitrary and anti-competitive new fees on content companies? What kind of a world are we building where we don't let companies like Comcast impose draconian, unnecessary and hugely unpopular usage caps to fatten revenues? Won't you think of the children? Why can't you people understand that Netflix is the root of all evil?
"So what does this mean? The oomph behind a regulated Internet isn’t coming from the net-neutrality philosophes. It’s coming from Netflix and its attachment to a particular pricing model for broadband...By the way, we are not stating a Netflix conspiracy theory...the fact is, regulators are trying like crazy to make the necessary broadband seem like a free lunch to Netflix customers—a short-termism that necessarily undermines the incentive of others to compete with cable’s already-paid-for infrastructure."From there, Jenkins throws around a lot of terms like it's pretty clear he doesn't actually understand "overbuilders!", makes a few bizarre, unsubstantiated claims that Netflix supports last mile broadband monopolies, and even tries to vaguely blame Netflix for AT&T and Verizon's plan to hang up on millions of DSL users (something that's long been in the works and is totally unrelated to net neutrality or the FCC's Title II push).
by Karl Bode
Wed, Sep 2nd 2015 3:33pm
"In the interest of more transparency, we’re posting bios for our regular freelance op-ed columnists online and linking those bios to their bylines. John Sununu has told me he will avoid writing about issues pertaining to cable and internet access because of his seat on the Time Warner Cable board."Note Clegg's primary worry appears to be Sununu's seat on a cable company board, not the fact that he's been paid by a lobbying group since 2011 or so. Sununu can, of course, still write on other issues where his conflicts of interest are at least marginally obscured in some half-assed fashion. Clegg goes on to make some ambiguous promises in regards to shoring up any transparency gaps moving forward:
"It’s safe to say that few freelance columnists make their living solely from writing for newspapers these days, so most have other jobs or consultancies. We want to be more transparent with our readers about the nature of columnists’ work and affiliations. When appropriate, we’ll include relevant details in the text of the print edition of the column, as well as the link for our digital readers."Great, except it's not entirely clear that just posting a bio is enough, since those bios often intentionally obscure direct financial relationships. Take a recent Sununu piece in the San Francisco Chronicle, for example, which actively helps Sununu and friends confuse customers by pretending the telecom lobbying group that pays Sununu, "Broadband For America," is actually "a coalition of 300 Internet consumer advocates, content providers and engineers."
by Mike Masnick
Tue, Aug 18th 2015 3:06am
Thanks to the overperformance of N.W.A biopic “Straight Outta Compton,” Universal Pictures is tracking to cross the $2 billion mark at the domestic box office on Saturday, setting a new speed record in doing so.That does not sound like an industry that is having a problem getting people into the theaters, even if the movies are available via infringement. But, people will argue, these services are actually harming the "home video" revenue stream. But that's questionable as well. First off, it was Hollywood that angrily fought against ever allowing a home video market in the first place (remember that?). And, more to the point, we've seen over and over again that when the industry actually adapts and offers content in a reasonable format at a reasonable fee, people will pay at home, just like they do in theaters.
Universal’s historic climb will break Warner Bros.’ previous record of reaching $2 billion by December 25, 2009. The studio is also extremely likely to break the record for all-time domestic box office high, which was set by WB in 2009 with $2.1 billion.
by Tim Cushing
Mon, Aug 3rd 2015 3:57pm
The Ninth Circuit Appeals Court has upheld a win for Netflix in yet another privacy class-action lawsuit arising from the publication of then-Supreme Court nominee Robert Bork's rental history oh so many years ago. The Video Privacy Protection Act sprang into being in 1988 and was used to extract a settlement from Netflix over 20 years later.
The lawsuit Netflix settled featured one key difference: in that case, rental information -- in the form of "anonymized data" -- was released to third parties working on better suggestion algorithms in hopes of winning $1 million. In this case, no information was released in any form to third parties… at least not in this sense.
At the center of this lawsuit were complaints that Netflix exposed viewing history to certain third parties, i.e., anyone who used the same login as the account holder. This would include family, friends and guests at a person's residence. Since Netflix allows any number of devices to be allowed to access the account simultaneously (depending on how much you want to pay per month), one person's viewing history could theoretically be accessed by a great many people.
So, while there may be a privacy concern, it isn't a logical one. The information "exposed" to third parties is done so willingly by the account holder by sharing login info/logged-in devices with other viewers. Certainly the original account holder would like immediate access to recently viewed content. But this convenience also allows anyone using that login to see what's been viewed by that account. The plaintiffs claimed this convenient feature was actually a violation of the 27-year-old Video Privacy Protection Act.
The complaint alleges that upon setting up a Netflix account, personally identifiable information, by default, is only disclosed to a Netflix subscriber through her password-protected account. Under those circumstances, a subscriber’s queue or recommendation lists are only viewable by the subscriber. Netflix subscribers can then elect to display on their televisions what would otherwise be password-protected information by registering Netflix-ready devices in their accounts. Thereafter, Netflix automatically displays on a television what it displays on a subscriber’s computer: streamed instant videos, the subscriber’s queue, and video recommendations. This is plainly a disclosure “to the consumer” as contemplated by the VPPA. When Netflix displays a subscriber’s queue, viewing history, or recommendation lists in her online account, that is a disclosure directly to the consumer. The nature of that disclosure does not change when subscribers choose to display the same content on their television screens. The subscriber’s choice to do so does not trigger some new statutory duty on the part of Netflix.Furthermore, the law (logically) does not demand that Netflix prevent things it can't possibly control.
The fact that a subscriber may permit third parties to access her account, thereby allowing third parties to view Netflix’s disclosures, does not alter the legal status of those disclosures. No matter the particular circumstances at a subscriber’s residence, Netflix’s actions remain the same: it transmits information automatically to the device that a subscriber connected to her Netflix account. The lawfulness of this disclosure cannot depend on circumstances outside of Netflix’s control.The lawsuit also used California's civil code as a fallback option in case the VPPA claims failed, but the court finds the wording in that statute doesn't open Netflix up to any additional culpability.
While phrased in slightly different language than the VPPA, the California Civil Code plainly excludes liability for disclosures to a subscriber who is the subject of a record. Netflix’s disclosure of personal information was made to its subscribers and therefore it is not liable under section 1799.3.That this case made it as far as the appeals court is simply the judicial system functioning as it should, rather than indicative of the lawsuit's strengths. Exhausting every available remedy is something the system grants to plaintiffs, even if the arguments made are incredibly weak.
by Karl Bode
Fri, Jul 17th 2015 7:34am
"While Cohen sees Netflix as a complement to Comcast’s cable offering, he acknowledges that streaming services, especially those that offer slimmer video packages like Sling TV and Sony PlayStation Vue, could potentially be more attractive to price-conscious consumers. "Part of this is a self-inflicted wound," Cohen said. “We have made video too expensive."A cable or broadcast executive admitting they've refused to compete on price is a rare animal indeed, and even more rare from a legendary obfuscationist like Cohen. Normally, Comcast has downplayed their slow quarterly hemorrhaging of video subscribers, while Netflix, in contrast, added 3.3 million subscribers last quarter alone. Like most cable execs, the folks at Comcast are so used to a pampered duopoly, they see price competition as a vile alien abomination, justified in part by the millions of consumers that continue to pay an arm and a leg for bloated, over-priced lineups of unwatched channels.
"Cohen added while some fear that more Netflix customers means less cable customers, he reminded the audience that reliable broadband is a crucial element of the streaming service. “Remember, you can’t get Netflix without broadband service,” Cohen said. “Those are 3 million customers of our broadband service."And that's the rub. At the end of the day, Comcast still intends to grab its pound of flesh one way or the other, whether that's by forcing Netflix to pay direct interconnection fees, or by slowly expanding the company's usage cap and overage fee trials and hoping nobody notices. Either way, Comcast will continue to do absolutely everything in its power to avoid having to compete on price for as long as humanly possible. But as they say, admitting you have a problem is the first step to recovery.
by Karl Bode
Thu, Jul 16th 2015 10:29am
"This new policy and the commitment to apply it across the ‘New Charter’ footprint is a substantial public-interest benefit and will support scaling the Internet to meet consumers’ growing demand for online services and help foster continued innovation across the Internet ecosystem. Accordingly, Netflix supports the proposed Charter Time Warner Cable transaction if it incorporates the merger condition proposed by Charter."If you recall, Netflix and transit operators have spent the last two years accusing last mile ISPs of intentionally letting transit points degrade in order to kill settlement-free peering and force Netflix into costly new direct interconnection deals. The problem is since both sides keep these business deals aggressively private, there hasn't been enough hard data to prove it (even though we're getting closer). Regardless, the mere threat of real net neutrality rules (you remember, the rules that were supposed to destroy the Internet) appear to have put the kibosh on a large chunk of this ugly infighting.
by Karl Bode
Mon, Jul 13th 2015 12:45pm
"Here’s some quick math: Comcast sells Internet at different prices in different markets, but right now a basic broadband-only subscription in its home market of Philadelphia is $67 a month. Add in the cost of Stream and you’re up to $82 a month. But Comcast sells a basic TV + Broadband package, including HBO, for $45 a month. You will want to read the fine print when you compare the two offers.** But you might reasonably conclude that Comcast would still rather sell you cable TV than Web TV."Gosh, yes, you might just reasonably conclude that. Comcast (like all cable operators) is stuck between a rock and a hard place. If it offers a truly disruptive, well-priced internet streaming service, it will start heavily cannibalizing all of the customers currently paying an arm and a leg for traditional television. The answer? Cable will have to do the unthinkable and begin competing on price, offering traditional cable TV and streaming capabilities and a better bundle price. Yes, the reduction in quarterly revenues is going to make investors and executives cry over their lattes, but it's a smarter play over the long haul than responding to fleeing, cost-conscious customers with the inept one-two punch of yet more rate hikes and the pretense of innovation.
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