A pair of programming providers get into a very public spat about who’s to blame over the substandard service subscribers are receiving. Fingers are pointed. Threats are made. And at the heart of the dispute is little more than cold, hard cash.
No, I’m not thinking of the barbs that Netflix and Verizon traded late last week over the latter’s delivery of the former’s streaming video service—though I very well could be. In this case, I’m referring to last summer’s ugly feud between CBS and Time Warner Cable.
CBS wanted Time Warner to pay more for carrying its broadcasts on the latter’s cable network. Time Warner refused, instead blacking out CBS-TV to 3 million NYC subs. In place of the regular CBS channels, Time Warner posted a message on viewers’ screens: “CBS has made outrageous demands for the programming that it delivers free over the air, requiring us to remove their stations from your lineup while we continue to negotiate for fair and reasonable terms.”
That may sound terribly familiar to Netflix subscribers who get their Internet from Verizon. Last week the streaming media service started displaying messages when streaming slowed, blaming Verizon’s network for the low video quality. Verizon is now threatening to sue Netflix if the messages persist.
(On Monday, Netflix indicated it would stop pointing the finger at ISPs like Verizon via on-screen messages. “We started a small scale test in early May that lets consumers know, while they’re watching Netflix, that their experience is degraded due to a lack of capacity into their broadband provider’s network,“ Netflix wrote in a blog post. “We are testing this across the U.S. wherever there is significant and persistent network congestion This test is scheduled to end on June 16.”)
Like the CBS-Time Warner Cable dispute, this Netflix-Verizon dust-up is one of many content provider/content distributor battles springing up in the digital world. And the bottom line is the same, too: It all comes down to money.
In Netflix’s case, it wants to deliver streams to its subscribers without having its own operating costs shoot upward. Cable providers see the heavy traffic that a service like Netflix commands and would like the streaming service to pay up for the infrastructure its video streams are taxing. Cut away the posturing, though, and the essence of both sides’ salvos are the same: “We [insert name of whoever is speaking] are your lovable blameless friends and we have your best interests at heart. They [insert name of current adversary] are the bad guys, so blame them. Better yet, complain that you’ll drop their service if things don’t improve, so that we’ll have a better bargaining position.”
They probably don’t say that last part out loud.
The rub: Neither side in this debate wants you to blame them should your stream of Orange Is the New Black start to lag. Because that could cost them subscribers, which ultimately costs them money.
This is a dire fiscal fate that Netflix, Verizon, and Comcast (another ISP whose disputes with Netflix have gone public) all want to avoid. At least they agree on that issue.
“But what about the technical question of who’s responsible?” the geekiest of you may ask.
The answer: Ultimately, they all are. If Netflix, Verizon, and Comcast were first and foremost concerned with delivering a top-notch streaming experience above all else, they’d probably be working to make it happen—not throwing sanctimoniously-worded temper tantrums blaming each other.
But that’s what happens when big money is at stake. As ’80s pop rocker Darryl Hall once sang during a brief foray into the musical avant-garde, “Sooner or later it’s a matter of money/Then it’s just a matter of time.”
Updated at 11:30 a.m. PT to note that Netflix plans to stop posting on-screen messages about streaming performance.