Seeking Alpha

Verizon fights back over Netflix error message

  • Verizon (VZ +0.4%) has sent a cease and desist letter to Netflix (NFLX +1%) over error messages the company is reported to be displaying placing blame at the feet of Verizon for a crowded network.
  • The company says there is no basis to make the claim that it's solely responsible for the issue.
  • A Verizon spokesperson calls the error message a "publicity stunt."
Comments (14)
  • James Sands
    , contributor
    Comments (1931) | Send Message
     
    Good for Netflix!
    5 Jun, 03:07 PM Reply Like
  • economonoc
    , contributor
    Comment (1) | Send Message
     
    Yes, we want net neutrality!
    5 Jun, 06:38 PM Reply Like
  • labas112
    , contributor
    Comments (304) | Send Message
     
    How could verizon fight this? They have meters now that show which providers are slowing netflix streaming now, purposefully or not.
    5 Jun, 04:14 PM Reply Like
  • The Deji
    , contributor
    Comments (11) | Send Message
     
    HAHAHAHAHAHAHAHAHAHAHA...
    5 Jun, 08:22 PM Reply Like
  • 14785912
    , contributor
    Comments (2) | Send Message
     
    Hey Mods, why are you censoring my comment? All I said was, "You asked for net neutrality, now you get to live with net neutrality."... Peace Out.
    5 Jun, 09:00 PM Reply Like
  • Mike Serebrennik
    , contributor
    Comments (475) | Send Message
     
    Netflix is asking for a Merry Xmas by kicking Santa in the shins.
    5 Jun, 10:00 PM Reply Like
  • redarrow5150
    , contributor
    Comments (996) | Send Message
     
    Funny that Netflix never asked the U.S. Postal Service to delivery DVD's for free.
    5 Jun, 10:04 PM Reply Like
  • Dennis Baker
    , contributor
    Comments (1100) | Send Message
     
    If I'm paying for a 100 MB Internet connection and Verizon isn't delivering me a 100 MB connection, I want to know.

     

    All Netflix is doing is passing on a little information. "Hey that high speed connection you are paying for... Isn't high speed."
    6 Jun, 02:24 AM Reply Like
  • redarrow5150
    , contributor
    Comments (996) | Send Message
     
    Totally agree but this whole aspect of Net Neutraility Netflix is trying to use as propaganda is a joke.
    6 Jun, 08:56 AM Reply Like
  • Dividend Math Guy
    , contributor
    Comments (315) | Send Message
     
    The thing is that Netflix has PAID Verizon for "fast lane" service. If they're not getting it I think they have the right to complain!
    6 Jun, 12:36 AM Reply Like
  • Dr Joseph Haluska
    , contributor
    Comments (295) | Send Message
     
    Not to take sides here, but which of these companies needs the other more? Which is the more likely to be replaced by someone else? Is there something to be said for a "kinder, gentler" dispute resolution? Has that been tried, but didn't work?
    6 Jun, 09:09 AM Reply Like
  • James Sands
    , contributor
    Comments (1931) | Send Message
     
    I think the key thing to consider is Netflix's scale and how this relates to long-term retention. Netflix is approaching 50 million global subscribers. This nothing to scoff at as many of these subscribers will stick with the company for the next 20 years.

     

    I don't think a replacement theory is a straight forward proposition. Right now I'm glad that the majority of U.S. households still use cable and satellite subscriptions. It makes my internet-only media costs extremely cheaper.

     

    But long-term as the scale tips, internet costs to stream content will greatly increase for everyone involved, content developers, distributors, and consumers alike.

     

    When this day comes, hopefully Google will have built new fiber optic cables with greater speeds and lower costs in my neighborhood. I am less likely to ditch the streaming content I want (versus the cable and satellite bundle approach) as I am the infrastructure providing it to me.

     

    Consolidation in the short-term regarding communication infrastructure will create long-term opportunities for new infrastructure, I.E., there will always be a cheaper opportunity as a consumer if you are willing to sacrifice a little.
    6 Jun, 10:46 AM Reply Like
  • jameskm03
    , contributor
    Comments (102) | Send Message
     
    The sad thing is if you do the math worst case scenario it costs 10 cents to deliver a GB of data. It is well less than this in the US probably around 1-3 cents depending on the area/region. I'm also being EXTREMELY conservative here because here is an article that Netflix is stating that it costs less than 1 cent to transfer a GB.
    http://bit.ly/1okRtEg

     

    So let's assume they have an agenda to make this sound as rosey as possible and triple the estimate.

     

    So even if a user consumed 200 GB of data and to keep the math simple 1GB of data is approximately 1hr of high quality viewing. So 200/30 is equal to 6:40 minutes a day of Netflix streaming in a month. That's an insane amount of binge watching. Let's assume that it costs 3 cents/GB then it COSTS Verizon $6/month to support you (200 x 0.3). Most likely your paying about $50/month for that internet service.

     

    Yes I get there are setup and maintenance costs to lay and run the pipes but a heavy abuser of bandwith is NOWHERE CLOSE to costing an internet provider money.

     

    Internet provider margins are some of the juiciest around (600% marker in this conservative estimate). #JustSayin
    6 Jun, 01:41 PM Reply Like
  • Rod Raynovich
    , contributor
    Comments (57) | Send Message
     
    First time I have read this that binge watching and Netflix hogs cost nothing and do not slow internet speeds.
    6 Jun, 02:40 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|