Netflix to the living room likely to elevate net neutrality issue, says analyst

The Netflix announcement May 20 to offer movies on a subscription basis over the Internet via set-top boxes to living room TVs will likely blow the cap off the net neutrality issue as broadband usage skyrockets and competitive pay-TV providers seek to protect their interests, according to The Diffusion Group.

In a statement to the media following the Netflix announcement, Michael Greeson, president and principal analyst, of The Diffusion Group, said the numbers tell the tale. Consider:

  • 8.2 million Netflix users already have “a billing relationship” with the company;
  • the 10,000 titles currently available on Netflix’s Watch Now PC-based service will now be available for TV viewing via the set-top box;
  • existing subscribers don’t have to pay any additional fees for the service, they simply pay $99 for the Roku-manufactured set-top box, which may be discounted; and
  • the Netflix subscription model is an “all-you-can-eat” approach to its library of Watch Now titles, not a one-off rental as with Apple TV, Vudu or CinemaNow.

“When established video distributors such as Netflix start to push subscription-based digital video rental models into the living rooms of millions of consumers … the lid will be taken off these previously ‘capped’ forces, thus exposing consumers, carriers, content creators, distributors, and regulators to stand up and take notice,” said Greeson.

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