Netflix wants to make sure its users aren't sitting around looking at loading screens, waiting for their favorite shows to buffer. So the streaming media service has struck a deal with Comcast, America's biggest internet provider (and owner of NBCUniversal Media, LLC) to make sure its subscribers for more reliable service.
According to The New York Times, Netflix accounts for as much as 30% of internet traffic at peak hours, and now it is paying the companies who provide access to customers. As Comcast continues to gobble up other companies-like Time Warner Cable-and moves into the content provider business, pundits have speculated about what would happen to customers who wanted to stream content rather than pay companies like Comcast premium fees for cable subscriptions. If the $45 billion deal with Time Warner goes through, Comcast will be the internet provider for about one-third of Americasn, and some worried that the broadband providers would intentionally choke off lines to heavy users of streaming services.
Others worry that this deal could give Netflix an advantage over other content providers, and violate net neutrality agreements. Analysts, however, are quick to point that the agreement doesn't technically violate any net neutrality rules. Comcast has long been at the bottom of the heap when it comes to performance for Netflix customers. According to Bloomberg Business Week:
"The video service releases regular reports about the streaming performance of various Internet providers, and Comcast's quality dropped significantly in the past year. By December 2013, Netflix cited the country's largest broadband company for offering the fourth-slowest service in a ranking of 17 providers."
The agreement between Netflix and Comcast would take out the middleman, and send Netflix content straight through Comcast-but Netflix has to pay for the privilege. Though the details of the agreement are sketchy, some have speculated that Netflix may even be saving money by cutting out the companies that would normally carry traffic between its servers and Comcast's. Deals with other companies may even be in the works.