Home Wealth Project
Extensive Research On How To Build Wealth From The Comfort Of Your Own Home.
The Business of Netflix
Aug 23rd
Netflix is one of those businesses that is exciting, a market leader, but not all that profitable. For a long time, I’ve thought that the key to Netflix success will be to cut their licensing expenses by producing a lot of their own quality content, similar to the model used by HBO.
But for the time being, I’ve read that their profit margin hovers between ten and twenty percent. So while they make loads of revenue (billions), they also send almost half of that revenue out the company’s back door to the content owners. Then they have to pay for their technology infrastructure (servers, bandwidth, etc) and their employees.
So Netflix is one of those almost-sexy companies. They are obviously meeting a high-demand need. Ultra high-demand. And they are market leaders and innovators. But now they need to find better ways to increase profit margins.
Source: Gigom / HatTip: Brainz
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Comcast Steals Netflix Provider Level 3′s Lunch Money
Nov 30th
Comcast has started charging Internet backbone provider Level 3 Communications to deliver streaming Netflix services to customers. Consumerist has the story:
Here’s the deal: recently Level 3 outbid Content Delivery Network provider Akami to handle bringing streaming Neflix video.
Lacking leverage, Akami paid Comcast a traffic delivery fee. Level 3 doesn’t want to keep paying the fee. Comcast says they better pay the toll, or they can’t cross their bridge.
Comcast called Level 3′s claims “duplicitous,” saying, “Comcast has long established and mutually acceptable commercial arrangements with Level 3′s Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers. Comcast offered Level 3 the same terms it offers to Level 3′s CDN competitors for the same traffic. But Level 3 is trying to gain an unfair business advantage over its CDN competitors by claiming it’s entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers.”
Industry analyst Dave Burstein told Consumerist, “The Justice Department should step in with antitrust.”
So the biggest cable company in the US is charging a backbone provider a Netflix-specific fee. “Netflix accounts for more than a fifth of the traffic downloaded during the peak hours of 8 p.m. and 10 p.m. in the U.S., according to a report from broadband network company Sandvine Inc. Level 3 has said it will add capacity to its network to handle the extra load from Netflix’s movies,” writes Bloomberg. That means more “toll” money for Comcast, the salivating bully of the telecom world. More from Bloomberg:
Level 3 plans to complain to U.S. regulators who may enact so-called net-neutrality rules next month. The Federal Communications Commission is seeking to bar phone and cable providers from interfering with legal traffic on their networks. The rules are backed by President Barack Obama and companies led by Google Inc., EBay Inc. and IAC/InterActiveCorp. Phone and cable companies say rules aren’t needed and may hurt investment.
The move also comes as Comcast awaits FCC and Department of Justice approval to buy a majority stake in NBCU.
Comcast sure isn’t making many friends right now.
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Sony’s Netbox streams Netflix, YouTube and other internet stuff for $130
Aug 25th
| We can’t say there’s a real shortage of streaming, set-top boxes on the market, but that doesn’t mean we won’t welcome Sony’s… |
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Netflix to offer Internet movies, TV programming in Canada starting this fall
Jul 20th
| Instead, the company hopes to build its Canadian presence by streaming movies through the Internet to computers and other devices like the Xbox 360,… |
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