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    This makes me wonder why Netflix doesn’t go into the ISP business. As long as they’re behind ISP’s they’re going to have an awful negotiating position. Educating consumers can only go so far, especially when most consumers can’t just switch to an ISP that doesn’t throttle their traffic.

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      Actually, I think that’s what they are doing. They’re moving into the transit business, but since they aren’t a very useful bidirectional peer, they have to pay.

      Consider. Netflix currently (or not long ago) delivers data to Comcast via Big Pipes, Inc. Big Pipes has an agreement with Comcast where they have two ports plugged into Comcast’s switch. All of Netflix’s traffic has to go through those two ports, and is hence “throttled”. Akamai, on the other hand, has an agreement where they have ten ports in Comcast’s switch. Netflix could use Akamai to deliver their traffic, but Akamai costs more.

      Netflix has now decided to cut the middle man Big Pipes out of the picture completely. Funny that they don’t mention the cost savings from not paying for middle man transit.

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        True but there is a big jump from serving the data to owning the infrastructure that serves it. Also the main problem of lack of competition in the ISP space is due to urge high barriers of entry - cost and huge amounts of red tape for new comers.

        That is of course assuming they are not leasing the lines from Comcast or any of the other big players. If they were to do that by would still be dependant on the big players who could up their (yearly?) lease as a form of toll.

        I think what really needs to happen is the US government needs to come in and split up the companies into smaller ones under grounds of anti-competitive behaviour, like they did with Bell Telephone back in the 20th century.

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        I wonder if the solution for Netflix is in home caching servers. Imagine a Roku with a 4TB hard drive. Netflix knows I watched House of Cards. I’m going to watch season 2. The Roku downloads and precaches season 2 along with various other shows and movies on my watch list, or based on magic predictive algorithms. It can do this at any time of the day. When I do want to watch a show, it’s always high quality, never buffered, etc.

        This is how I use Spotify. I find songs I like, then mark them for offline listening. Streaming probably only accounts for 10% of my usage.

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          I am not sure if this would be feasible with bandwidth caps as we are now seeing them. It is also much less “on demand” that way – but if it was seamless maybe that wouldnt matter.

          Instead, I wonder if netflix did local torrenting somehow if it would help. Lets say 500 comcast customers are watching SomeMovie. Maybe those 500 customers could participate in a swarm. Very little traffic (tracker with source logic) would, in theory, leave comcast’s internal network.

          It would likely require a dedicated “netflix settop device” (similar to roku) to implement it.

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            The local torrenting is, in part, how Spotify distributes song media, so this isn’t too far fetched.

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            Boom! From the Amazon FireTV announcement:

            We also added an exclusive new feature called ASAP that predicts what movies and TV episodes you’ll want to watch and gets them ready to stream instantly. No one likes waiting for videos to buffer.