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Netflix Changes ISP Rankings, Lauds Proprietary CDN Adoptees

12 Nov, 2013 By: Erik Gruenwedel

Netflix has changed how it ranks monthly Internet service providers' streaming speed, by focusing instead on their performances during the subscription video-on-demand’s primetime (or peak) usage.

CEO Reed Hastings Nov. 11 tweeted a shout out to Cablevision, the New York-based multichannel video program distributor that uses Netflix’s Open Connect CDN to deliver its Optimum broadband service.

Both actions underscore Netflix’s ongoing efforts to bring consumer attention to the need for faster ISP speed from their multichannel video program distributor such as cable, satellite and telecommunication, and the fact that its SVOD service is a carrot ISPs should be using to lure subscribers and increase average-revenue-per-user (ARPU) by selling faster broadband speed at higher margins.

Indeed, Cablevision markets its Optimum broadband service with the tag: “Optimum has the best Netflix viewing experience,” to lure high-definition subscribers. It’s a move Hastings would like to see more of.

“Some ISPs care about delivering great Netflix experience. Others, not so much. Cablevision — you’re the best!” Hastings tweeted.

Netflix has had a bit of an adversarial relationship with MVPDs as it continues to grow subscribers, and produce original content while streaming billions of hours of programming through the latter’s broadband pipes into consumers’ homes.

Cablevision became one of the first MVPDs to use Netflix’s Open Connect CDN for its Optimum broadband service. Other MVPDs such Time Warner Cable, AT&T and Comcast use proprietary or third-party CDNs.

“We are proud that Netflix is one of the most popular Internet applications. Netflix is one of the primary reasons people sign up for broadband and upgrade to premium broadband tiers,” Hastings and CFO David Wells wrote in Netflix’s most recent letter to investors.

And Netflix, beginning with the October ISP rankings, moved away from listing average bit rates, focusing instead on bit rates when Netflix usage is at its peak.

Google’s budding fiber-optic network again distanced itself from the competition, delivering 3.50 mega bites per second (Mbps). Behind was Cablevision with 2.70 Mbps, followed by Cox (2.56 Mbps), Suddenlink (2.47 Mbps), Charter (2.37 Mbps), Time Warner Cable (2.23 Mbps), Verizon FiOS (2.22 Mbps), Comcast (2.07 Mbps), Bright House (2.04 Mbps) and AT&T U-verse (1.87 Mbps).

At the bottom were AT&T (1.25 Mbps) and Verizon (1.24 Mbps) DSL holdouts, and Clearwire (1 Mbps). 

BTIG Research analyst Richard Greenfield said Netflix’s tweaks underscore the media industry’s increasing desire for SVOD, and what that does to power shift at the top.

“The near-universal support of Netflix throughout the media industry makes us wonder about long-term risks from the increased power/reliance on Netflix and who the ‘smartest’ folks in the room really are,” Greenfield wrote in a blog post last March.



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