News

Why I’m Cutting the Netflix Cord

12/13/2010 12:01 AM Eastern

In a great discussion at the fall 2009 CTAM Summit in Denver, Time Warner Cable chief technology officer Mike LaJoie (as cable chief technology officers tend to do at conferences) said reassuring things about cable’s big pipe and how people still will mostly want to view entertainment at home on the big screen.

One challenge cable faces, though, is adding Internet-like search for programming
on other platforms. “And then be able to click a button and say, now
showing in my living room or now showing in my bedroom,” he said. “Those
kinds of things — we’re capable of doing that.”

“Kind of like you do with Netflix,” panelist Rich Battista, then-head of Fox
Networks, said.

“I don’t do Netflix,” LaJoie replied, getting some laughs. “I know some of
you do.”

At the time, I thought he was just being loyal to cable’s movies on demand.
But every day it’s clearer why Netflix merits cable operators’ scorn, even in jest.

Netflix already is one of the first things people mention when they talk about cutting
back or cutting out cable, that plus Hulu and iTunes and free over-air HDTV (though
The New York Times had a much-read piece recently that mentioned interference when
someone leaves the room to go to the bathroom).

Complementary, not contradictory, to cable is what Netflix claims to be. Rightly so,
now that the programmer is moving to a Web streaming model from mailorder
DVDs.

Netflix would be totally fine with someone keeping “cable” in the form
of broadband access and ditching “cable” in the form of multichannel
video, a la the commenter under the Times story who claimed to have
cut back the monthly tab from Time Warner Cable to $43 from $152 by
dropping TV and upgrading Internet to “turbo.” LaJoie might not be so
happy about that.

Meanwhile, as Leslie Ellis has pointed out on these pages, streamed
video has risen to, in some cases, half of the traffic on cable broadband
plants. Adding bandwidth to cope with the demand adds to cable cap-ex,
and is at the heart of Comcast’s business disagreement with content distributor
Level 3.

The latest move has Netflix stockpiling current (15 days’
old) TV episodes, to stream to customers, enhancing the complementary-tocable
subscription service and soaking up more bandwidth.

To encourage me to stream, Netflix upped my monthly fee to $14.99 from $13.99 for
the two-DVD-at-a-time service level and suggested a $7.99 streaming plan.
I think I’m with LaJoie on this one.
Bye, bye, Netflix.

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