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How The Comcast & Netflix Deal Is Structured

Link, Movies, Technology

Dan Rayburn at StreamingMediaBlog:

There’s been a lot of speculation involving the business and technical details surrounding the recent deal between Comcast and Netflix and plenty of wrong numbers and information being used. I thought it would be helpful to detail what’s really taking place behind the scenes, highlight some important publicly available data in the market, talk about the deal size, and debunk quite a few myths that people are spouting as facts.

Smart piece that walks you through how streaming works and where the money is.

Here’s something interesting:

In a little known, but public fact, anyone who is on Comcast and using Apple TV to stream Netflix wasn’t having quality problems. The reason for this is that Netflix is using Level 3 and Limelight to stream their content specifically to the Apple TV device. What this shows is that Netflix is the one that decides and controls how they get their content to each device and whether they do it via their own servers or a third party. Netflix decides which third party CDNs to use and when Netflix uses their own CDN, they decide whom to buy transit from, with what capacity, in what locations and how many connections they buy, from the transit provider. Netflix is the one in control of this, not Comcast or any ISP.

In my gut the Netflix-Comcast deal still feels wrong.

Yet it’s interesting to note that Netflix does pick and choose transit providers for different devices. Why? And do the device manufacturers have a say in this? If Apple is negotiating for prime delivery, doesn’t that undercut net neutrality as well?

This is a whole can of worms that will probably be the major technology story of 2014, but there are so many factors involved it’s hard for most readers to keep up. So sensationalism always wins.

(via Scott Macaulay.)

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