updated 06:05 pm EST, Wed January 26, 2011
Netflix says Apple TV trumps iPad, OKs FCC moves
Netflix while discussing breakthrough results on Wednesday surprised the industry with word that the new Apple TV was already more popular than the iPad for Netflix movie viewing. Apple's media hub had already accumulated more viewing hours in its first four months than the iPad managed in nine. The movie rental service didn't try to explain the gap, but it suggested many still preferred to use Netflix's movie streaming on a TV despite the surge in tablet video.
Game consoles like the Xbox 360, PS3 and Wii were also very popular. Both the regular iPhone app and the Windows Phone 7 app were similarly "popular," as were Roku's Internet Player media hubs. The company hinted that Google TV was a disappointment as it had "not yet gone mainstream." It was still confident the Android-based TV platform would eventually be "very successful" and was still investing in Google's devices.
Along with the device mix, Netflix outlined explicit support for the FCC's net neutrality order and promised a direct attack on opponents. It planned a list on its blog for Thursday that woud name and shame Internet providers that were providing a poor experience or which it suspected were deliberately obstructing its service. The movie outlet dropped direct hints that it would single out Comcast for its raising Level 3's costs. Providers like these were double dipping by trying to charge L3 not only for basic traffic but also for as a content provider, effectively serving as a way to 'punish' Netflix for competing with Comcast's own services.
"As long as we pay for getting the bits to the regional interchanges of the ISP's choosing, we don't think they should be able to use their exclusive control of their residential customers to force us to pay them to let in the data their customers' desire," Netflix said. "Their customers already pay them to deliver the bits on their network, and requiring us to pay even though we deliver the bits to their network is an inappropriate reflection of their last mile exclusive control of their residential customers."
It instead argued for an "open, regional, no-charges" model where both Netflix and an Internet provider didn't apply extra costs just for video deals.
The message also warned of carriers trying to exert a per-gigabyte, usage-based model, such as what has been threatened by Canadian providers like Bell, and of providers that instituted deliberately low bandwidth caps. It rejected attempts to exaggerate the costs for Internet providers to supply video and noted that the actual cost didn't justify any change in model.
"To deliver a marginal gigabyte, which is about an hour of viewing, from one of our regional interchange points over their last mile wired network to the consumer is less than a penny, and falling, so there is no reason that pay-per-gigabyte is economically necessary," it said. "Moreover, at $1 per gigabyte over wired networks, it would be grossly overpriced."
The carrier is also likely to single out Time Warner, which MetroPCS' net neutrality violations as the phone carrier has blocked Netflix on its cheaper 4G data plan.