The Rise of Netflix

In the 90s, there was Blockbuster (for those from small towns, the equivalent was Family Video).  In case you don't remember, these places were practically wonderlands, full of movies and candy and other amazing, colorful things.  They were fun places to explore and get lost in among the racks upon racks of videos you'd never before seen.  Some might even say it was hard to see the aisles for the movies.  But the turn of the century came, and Blockbusters started disappearing left and right.  Oh, they tried to keep up, with things like Blockbuster Online, but the blue and yellow colors that once shone so brightly among the drab colors of nearby businesses were soon overshadowed by a much more menacing color…. RED.  With the arrival of RedBox, Blockbuster began its slow spiral downward.  When Netflix arrived, its sentence was passed.

Netflix has only increased in popularity since it first became available.  It has gained more and more users, almost by the day, and has risen to become the most popular way to see movies once they are out of theaters.  Never mind that its selection is eclectic and incomplete, what matters is that it can be streamed instantly to your computer.  This is the age of laziness - I mean, convenience - and that is nowhere as evident as in Netflix's rise to popularity.  Netflix has even ventured into our pop culture, with such statements as, "I did nothing but watch Netflix all weekend" or "Let's get chocolate ice cream and watch Netflix tonight" occurring frequently.  But the rise of the Netflix marathon is starting to cause conflicts at some of the highest levels.  To you, it's just another night in, but to internet service providers, it's a headache and a waste of money…

Netflix users (that steam a lot) are only about 1% of total broadband users, but these users consume nearly 40% of the bandwidth provided by such companies as AT&T, Verizon, etc.  During peak traffic times, these users constitute nearly 1/3 of all data consumption.  This is a massive amount, and the these companies are not necessarily happy about it.  Currently, services to many of these Netflix customers are slow, due to the high volume and because the internet service providers have not been able to fully upgrade to high speed infrastructure.  Netflix complains that these companies are simply trying to hurt their customers in order to get at them, but these companies charge that they should not be the only ones to foot the bill to move to a better infrastructure if Netflix is going to get most of the profit.  They would have to raise their rates just to improve their infrastructure, and they claim that the other 99% of their customers should not have to pay higher rates due to the 1% of customers who want to stream movies all the time.  These companies are in talks with Netflix to negotiate a fee-for-connection, so that Netflix must pay more in order to use their infrastructure.  This is not unusual, as other high traffic companies, such as Google and Facebook, are already doing so.

This does not seem to be a perfect solution for everyone, and these internet providers are contemplating moving into a graduated service program where a user pays based on data used instead of bandwidth or data rate.  This is more closely modeled after the system mobile devices used.  While the companies like this, it does not sit well with everyone else either.

However, this is no cause for alarm.  Whether you worry about it or not, these things will unfold however they will unfold.  Instead of worrying about it, I suggest sitting back, relaxing, and watching a Netflix marathon while eating a tub of chocolate ice cream.