Comcast Candidly Admits Its High Prices Helped Create Netflix Responding to Netflix's record-setting second quarter numbers, top Comcast lobbyist David Cohen this week was willing to admit that Comcast's refusal to seriously compete on TV pricing helped create the streaming giant that Netflix is today. Speaking to attendees of the New England Cable & Telecommunications Association, Cohen called Netflix a "frenemy" Comcast inadvertently encouraged via high television pricing: quote:

We have made video too expensive ." You don't say? While broadcaster programming costs are the primary culprit, cable operators have contributed to these soaring rates through a variety of additional charges, whether that's a modem rental fee, a "Broadcast TV" fee, the increase in DVR and set top rental costs, charges to pay your bill in person, charges to pay your bill over the phone, etc.Regardless, most everyone agrees this price-hike parade is unsustainable, and Comcast, owner of NBC, is culpable all along the supply chain. Cohen of course also was quick to point out how even though Netflix may have added 3.2 million subscribers last quarter, Netflix still has to come through Comcast to get to them: quote: Cohen added while some fear that more Netflix customers means less cable customers, he reminded the audience that reliable broadband is a crucial element of the streaming service. "Remember, you can’t get Netflix without broadband service,” Cohen said. “Those are 3 million customers of our broadband service." You'll know the cable and broadcast industry is truly taking Netflix seriously when it begins to seriously compete on price, something the industry at large has gone to great, great lengths to avoid. The second cable operators are forced to compete on price on the video end, however, they'll likely compensate for lost TV revenue by increasing broadband prices. There's a few ways for Comcast to do that, either through You don't say? While broadcaster programming costs are the primary culprit, cable operators have contributed to these soaring rates through a variety of additional charges, whether that's a modem rental fee, a "Broadcast TV" fee, the increase in DVR and set top rental costs, charges to pay your bill in person, charges to pay your bill over the phone, etc.Regardless, most everyone agrees this price-hike parade is unsustainable, and Comcast, owner of NBC, is culpable all along the supply chain. Cohen of course also was quick to point out how even though Netflix may have added 3.2 million subscribers last quarter, Netflix still has to come through Comcast to get to them:You'll know the cable and broadcast industry is truly taking Netflix seriously when it begins to seriously compete on price, something the industry at large has gone to great, great lengths to avoid. The second cable operators are forced to compete on price on the video end, however, they'll likely compensate for lost TV revenue by increasing broadband prices. There's a few ways for Comcast to do that, either through interconnection fees or the company's slowly expanding use of usage caps and overages







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topics flat nest

mixdup

join:2003-06-28

Atlanta, GA 12.8 1.0

mixdup Member Not 100% their fault To be fair to Comcast (and I am far from a cable company apologist), high rates are not 100% their fault. The content companies have a huge role in both the unrelenting inflation of cable prices as well as bundling.



When unbundling comes to OTT, the cable companies will likely get it too. And when OTT gets first run availability of high quality content, it'll likely cost the same as it does on cable (see: HBO Now)

maartena

Elmo

Premium Member

join:2002-05-10

Orange, CA 2 recommendations maartena Premium Member Re: Not 100% their fault said by mixdup: To be fair to Comcast (and I am far from a cable company apologist), high rates are not 100% their fault. The content companies have a huge role in both the unrelenting inflation of cable prices as well as bundling.



When unbundling comes to OTT, the cable companies will likely get it too. And when OTT gets first run availability of high quality content, it'll likely cost the same as it does on cable (see: HBO Now)



As long as cable companies don't have the balls to stand up for their customers, we aren't going to get anywhere, and prices will continue to go up. I'd say it's certainly a two-way street. Cable companies are just as much at fault for allowing the content companies to walk all over them. Cable companies just succumb to the threat from the content companies who go all-out in marketing and advertising during a dispute, telling their viewers to go with another television subscriber, and they are desperate not to lose any customers.As long as cable companies don't have the balls to stand up for their customers, we aren't going to get anywhere, and prices will continue to go up. I'd say it's certainly a two-way street. Kearnstd

Space Elf

Premium Member

join:2002-01-22

Mullica Hill, NJ Kearnstd Premium Member Re: Not 100% their fault THis is why contracts being staggered works for the content owners. If all video platforms had to renew their contracts by the same exact due date the video providers could in theory secretly work together and come out and state "This is what we will pay" unclexrico

join:2014-03-28

Brooklyn, NY unclexrico Member Re: Not 100% their fault said by Kearnstd: THis is why contracts being staggered works for the content owners. If all video platforms had to renew their contracts by the same exact due date the video providers could in theory secretly work together and come out and state "This is what we will pay"



If the cable provider's had not shot themselves in the foot with endless price hikes, poor customer service, and hidden fees, maybe they'd have an ally in the consumer. As it stands now, the media companies and local broadcasters have a leg up in negotiation. It's not IF the MSO's will cave, but WHEN they'll cave during every re-trans fight. The problem is the must carry rule. They should just do away with it.If the cable provider's had not shot themselves in the foot with endless price hikes, poor customer service, and hidden fees, maybe they'd have an ally in the consumer. As it stands now, the media companies and local broadcasters have a leg up in negotiation. It's not IF the MSO's will cave, but WHEN they'll cave during every re-trans fight. Zoder

join:2002-04-16

Miami, FL Zoder Member Re: Not 100% their fault 2 law changes passed together that would that would really help.



1. Give broadcast stations a choice. Choice 1 is they can continue getting their free license to broadcast on the local frequency but in exchange they must offer the channel to free to the distributers. Choice 2 is they can charge retrans fees but now they must pay a yearly fee to the FCC for the license. This will be a meaningful fee not a token cost of doing business fee.



tl:dr You want to use our public airways for free, you don't then get to charge for the content being broadcast



2. Provide an antitrust exemption to the distributers. Cable, telco, dish, and internet. Allow them to form a joint venture for negotiating content agreements. That way they can negotiate as a block and if the content company is being unreasonable in price increases, they risk their content going off the air on most of their distributers at the same time. No more playing the distributers against each other which has just led to higher and higher prices for the channels with no end in sight. mikesco8

join:2006-02-17

Southwick, MA mikesco8 to unclexrico

Member to unclexrico

The must carry rule only applies if a local channel offers it for free retransmission, if they want to charge, it is no longer must carry, so that rule isn't really a problem unless there is a capacity issue. Zoder

join:2002-04-16

Miami, FL Zoder to Kearnstd

Member to Kearnstd

That would be illegal under the antitrust laws. See my next post. john262

join:2003-09-26

Elko, NV john262 to Kearnstd

Member to Kearnstd

That might be an anti-trust violation however. And if it is you can bet they would get sued over it.

Karl Bode

News Guy

join:2000-03-02 1 recommendation Karl Bode to maartena

News Guy to maartena

And that's before you get into they extract their own pound of flesh via equipment fees, Broadcast TV fees, fees to pay your bill in person, fees to pay your bill over the phone, etc. etc. They are far from innocent daisies in the price hike parade... Zoder

join:2002-04-16

Miami, FL Zoder Member Re: Not 100% their fault I would require the removal of the broadcast fees if the laws I proposed above were implemented.



I would also enforce the FCC to have teeth on the equipment rentals. Right now Comcast laughs at the FCC customer owned equipment rule. They claim their STB is only $2.50 and the outlet is 7.25. So that way, customers who have a cable card device get a paltry credit making it pointless if your goal is to save money by buying CC enabled equipment.



I would wager if the books were being audited, most companies would be expensing the boxes at more than $2.50 a month. The highend boxes would be EOL before they made back the cost on the box at those rates. dfxmatt

join:2007-08-21

Crystal Lake, IL dfxmatt to mixdup

Member to mixdup

Wrong. It is 100% their fault. You think they don't know that they could sell internet service at the speeds we want at the prices we want? They've worked very, very hard to avoid that.



It's not at all hard to provide 100-200mb downstream for $20 or $30/mo, provided you actually build for it. john262

join:2003-09-26

Elko, NV john262 to mixdup

Member to mixdup

But if you are content with OTA plus Netflix as I am then you will continue to save money. I know that's not for everybody but I feel that with Netflix plus OTA I already get more content than I could ever watch in a million years.

maartena

Elmo

Premium Member

join:2002-05-10

Orange, CA maartena Premium Member Not surprising



Sports programming is especially expensive, I calculated that a Los Angeles market customer is paying around $25 a month for sports alone when they take on a regular cable package, and with $5-a-team-channel prices that figure is only going to go up.



Right now, we are sort of in this situation:









And the cable companies need to stand up against content owners a lot more than they are doing now. They will all cave in eventually, and the customer will pay for it.



Enough is enough. Cable prices have steadily been going up with about twice the inflation rate every year. We are paying about DOUBLE what we are paying for cable television than we were around 10 years ago, and there doesn't seem to be any signs of stopping.Sports programming is especially expensive, I calculated that a Los Angeles market customer is paying around $25 a month for sports alone when they take on a regular cable package, and with $5-a-team-channel prices that figure is only going to go up.Right now, we are sort of in this situation:

Flyonthewall

@teksavvy.com 3 recommendations Flyonthewall Anon Re: Not surprising Isn't Comcast both the puppet and the puppeteer? They own NBC. john262

join:2003-09-26

Elko, NV john262 Member Re: Not surprising Yup and that is a big part of the problem. That merger should never have been approved. Kearnstd

Space Elf

Premium Member

join:2002-01-22

Mullica Hill, NJ Kearnstd Premium Member Then make video cheaper cable industry When it comes time for contracts play hardball.



Form some trade group of all MSOs and work together to tell the content industry enough is enough.



oh wait the MSOs also have a vested interest in the content creation. rradina

join:2000-08-08

Chesterfield, MO 920.3 39.3

·Charter

1 recommendation rradina Member Prices Only One Factor Granted, Comcast did say high prices helped create Netflix but they never seemed to acknowledge the convenience factor of streaming services. They allow us to choose what, when, where and how we view the content our paid subscription provides.



For years cable has used awful STB/DVR solutions as a means to control content and generate even more revenue. For some, cable cards offer relief but it seems an intentionally kept secret. Although my cable provider finally offers a streaming app, usability is horrible, it frequently crashes, refuses to show content if a device is rooted or any mechanism to show the content on a bigger screen is employed (casting/MHL). It's also available on only a few platforms (no SmartTV app, no XBox app, no Windows App and their browser-based solution is even worse than the apps they do provide!)



OTOH, Netflix streams on everything from almost anywhere (geo blocking the notable exception). Their service is also rock solid.

Flyonthewall

@teksavvy.com Flyonthewall Anon Thank you Captain Obvious What a shock, we created competition because we charge too much money. Holy Price Climb, Batman!



And they aren't potentially more attractive you boob, they ARE.



This guy needs to get hit on the side of his head with a hammer before he sees it. shanghaista

join:2014-08-03

Canton, MA shanghaista Member Re: Thank you Captain Obvious Oh he sees it. He just won't publicly admit to it. And why would he, it doesn't put his employer in a positive light.



Like Coke executives obviously know Pepsi as a competitor but literally will not mention the brand.



It's all about PR/Marketing...

why60loss

Premium Member

join:2012-09-20 why60loss Premium Member I bet if they had any idea this was going to happen.........



It would be better if they all day traded at this point than took the time to sit there and tell them what to do. (So they can pump and dump)



They likely will start doing that with software as the tech moves forward and they start letting trading bot tech out into the wild more. In fact many of the banks and other large business's already do trade the markets with pure software. They still wouldn't have done much because modern day shareholders only care about this year not 3 to 5 years from now.It would be better if they all day traded at this point than took the time to sit there and tell them what to do. (So they can pump and dump)They likely will start doing that with software as the tech moves forward and they start letting trading bot tech out into the wild more. In fact many of the banks and other large business's already do trade the markets with pure software.

davidc502

join:2002-03-06

Mount Juliet, TN -1 recommendation davidc502 Member Taking responsibility



They take credit for raping customers wallets, and they go as far as taking credit for the creation of Netflix because of their high prices.



I bet they would get into a fight with Al Gore about who invented the internet "While Cohen sees Netflix as a complement to Comcasts cable offering, he acknowledges that streaming services, especially those that offer slimmer video packages like Sling TV and Sony PlayStation Vue, could potentially be more attractive to price-conscious consumers. "Part of this is a self-inflicted wound, Cohen said. We have made video too expensive."They take credit for raping customers wallets, and they go as far as taking credit for the creation of Netflix because of their high prices.I bet they would get into a fight with Al Gore about who invented the internet Steve991

join:2015-03-09 1 recommendation Steve991 Member Monopoly "Remember, you cant get Netflix without broadband service, Cohen said. Those are 3 million customers of our broadband service."



He did not even have to consider that some of those customers would go to another provider, because....what competition? smk11

join:2014-11-12 smk11 Member Re: Monopoly said by Steve991: "Remember, you cant get Netflix without broadband service, Cohen said. Those are 3 million customers of our broadband service."



He did not even have to consider that some of those customers would go to another provider, because....what competition?



"Enjoy HBOGO and Netflix--exclusively for Comcast internet customers!" Wait till exclusivity hits."Enjoy HBOGO and Netflix--exclusively for Comcast internet customers!" tkdslr

join:2004-04-24

Pompano Beach, FL tkdslr to Steve991

Member to Steve991





»dvd.netflix.com/BrowseGe ··· ray/2444 Netflix started out and still has a DVD/blu-ray movie rental service.

Mystik

@comcastbusiness.net Mystik Anon What really might help, How it probably should have started out ... If the Cable cos were nothing more than a video pipe and you paid a low monthly price for the cable. The content providers should charge directly. If Fox wanted $19.00/mo. for the Fox bundle and you wanted it just sign up at fox.com. They send a signal to the cable co to activate that bundle of channels for you. This way if they wanted to up the price to $25.99/mo. you could just simply cancel if you didn't want to pay that much for it. This puts the power into the consumers hands instead of cable and content lawyers hands.



It was close to this way with those old big satellites. But with Cable they just let the content companies create this mess they are in now. Laughing all the way to the bank. john262

join:2003-09-26

Elko, NV john262 Member One way to cut the cost of content is to tell the producers of the content to take a hike. Then use the money you would have paid to them to produce your own original content. I know that won't work for live sports but it would be a big help. your comment..

