“This fight may get ugly before it ever get’s fixed and may ultimately hurt both Verizon and Netflix brands.” Says Technology Industry Analyst Jeff Kagan
Atlanta, GA (PRWEB) June 06, 2014
Netflix now delivers it’s content over the Internet to customers. They do business with assorted ISP’s across the country to do this. Now Netflix is telling it’s customers to blame Verizon for the slow streaming or downloading. In response Verizon is warning Netflix to stop blaming them or they will take legal action, according to Reuters, June 5.
Industry analyst Jeff Kagan offers comment.
“Netflix customers who use Verizon as their broadband provider apparently know about this speed problem. This is something that needs to be fixed. How and who should pay is one key sticking point. Either way this battle between Netflix and Verizon may ultimately damage both companies' brands going forward," says Principal analyst Jeff Kagan.
“This is obviously something Netflix wants to fix. It’s their reputation that is at stake. However the number one question is simple. Is publicly pointing the finger at Verizon the right path for them to take or will it ultimately damage the brands of both Netflix and Verizon?” says Technology analyst Kagan.
Obviously Netflix wants to deliver fast downloads to it’s customers. To not do so is a poor reflection on the service customers pay for with Netflix. This is a new problem.
Netflix started out mailing DVD’s to customers. Now they let customers download over the Internet. Today Netflix uses up roughly one third of all Internet bandwidth each night. Rapid success in this area has created this new problem.
“There is a learning curve that comes with any new venture. Companies must work together to solve their problems and deliver good quality services to customers. However if we pull the camera back and take a look at this from a longer term historical perspective we can see there is a bigger problem at work here," says Tech analyst Kagan.
“If we take a closer look we see that this Netflix problem in some ways is created by Netflix itself. Netflix is suddenly responsible for roughly one-third of all Internet traffic during peak hours like nights and weekends. One single company sends one-third of all traffic over the Internet. While that is an incredible accomplishment for Netflix and their shareholders, it also puts an incredible strain and burden on Internet providers and impacts all customers and sites," says Wireless analyst Kagan.
“I agree with both Netflix and Verizon, however I also hold both of them responsible for letting this problem grow to this point and publicly pointing the finger at each other. Involving the customer the way Netflix is doing often has a way of turning around and biting you in the rear end," says Kagan.
“So while this is a problem, it’s a good problem. It’s the kind of problem companies have as they struggle to keep up with incredible demand. However any problem, even good problems, are still problems. This needs to be fixed," says Kagan.
“Netflix used to have to pay the postal service to deliver their movies to customers. The financial impact is all different now since they send their content over the Internet. They have been on this low cost ride for a long time, especially when we consider they use up one third of the Internet traffic on a daily basis," says Kagan.
“So because Netflix is so popular and uses up so much bandwidth, there is no other company to compare them to. At this point since they are such a heavy user of bandwidth, they should pay their own way. There are many different scenarios that would work for both Netflix and the ISP’s," says Kagan.
“I like Netflix and want them to be very successful, however it’s time they stop acting this way and take mutual responsibility for their own problems. So this problem is both the fault of Netflix and Verizon. It’s time the two of you sit down and settle this and get on with taking care of your customers before you damage your own brands," says Kagan.
About Jeff Kagan
Jeff Kagan is a Technology Industry Analyst, consultant and columnist. He is regularly quoted by the media and shares his opinion in many ways over 25 years.
He offers comment to reporters and journalists on wireless, telecom, Internet, cable television, IPTV and other tech news stories.
Kagan is also known as a Tech Analyst, Wireless Analyst, Telecom Analyst and Principal Analyst.
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