On 2014-05-14 02:04, Jean-Francois Mezei wrote:
On 14-05-13 22:50, Daniel Staal wrote:
They have the money. They have the ability to get more money. *They
see
no reason to spend money making customers happy.* They can make more
profit without it.
There is the issue of control over the market. But also the pressure
from shareholders for continued growth.
Yes. That is true. Except that it's not.
How do service providers grow? Let's explore that:
What is growth for a transit provider?
More (new) access network(s) (connections).
More bandwidth across backbone pipes.
What is growth for access network?
More subscribers.
Except that the incumbent carriers have shown they have no interest in
providing decent bandwidth to anywhere but the most profitable rate
centers. I'd say about 2/3 of the USA is served with quite terrible
access.
The problem with the internet is that while it had promises of wild
growth in the 90s and 00s, once penetration reaches a certain level,
growth stabilizes.
Penetration is ABYSMAL sir. Huge swaths of underserved americans exist.
When you combine this with threath to large incumbents's media and
media
distribution endeavours by the likes of Netflix (and cat videos on
Youtube), large incumbents start thinking about how they will be able
to
continue to grow revenus/profits when customers will shift spending to
vspecialty channels/cableTV to Netflix and customer growth will not
compensate.
Except they aren't. Even in the most profitable rate centers, they've
declined to really invest in the networks. They aren't a real business.
You have to remember that. They have regulatory capture, natural/defacto
monopoly etc etc. They don't operate in the real world of
risk/reward/profit/loss/uncertainty like any other real business has to.
So they seek new sources of revenues, and/or attempt to thwart
competition any way they can.
No to the first. Yes to the second. If they were seeking new sources of
revenue, they'd be massively expanding into un/der served markets and
aggressively growing over the top services (which are fat margin). They
did a bit of an advertising campaign of "smart home" offerings, but that
seems to have never grown beyond a pilot.
The current trend is to "if you can't fight them, jon them" where
cablecos start to include the Netflix app into their proprietary
set-top
boxes. The idea is that you at least make the customer continue to use
your box and your remote control which makes it easier for them to
switch between netflix and legacy TV.
True. I don't know why one of the cablecos hasn't licensed roku, added
cable card and made that available as a "hip/cool" set top box offering
and charge another 10.00 a month on top of the standard dvr rental.
Would be interesting to see if those cable companies that are agreeing
to add the Netflix app onto their proprietary STBs also play peering
capacity games to degrade the service or not.
So how is the content delivered? Is it over the internet? Or is it over
the cable plant, from cable headends?
