The 9 times also includes the pipe - perhaps a more accurate picture of Netflix is - pay $40 for high-speed Internet, $8 for Netflix, save $23 . (save more if you have HD cable and the cable company's DVR, which is a better comparison).
The $30 you save is basically what the cable company pays the cable content networks. So they end up the big losers.
The cable company/ISP might squawk and raise high-speed prices due to all the bandwidth.
And the $8 is artificially cheap - see my comment below, and will probably go up as more content is available and providers get wise.
Some speculation on the end result: Maybe there will be a $10 tier with old movies, TV reruns; then a $20 tier with the basic cable fare, but Netflix will only pay content providers based on what gets watched; a premium tier with recent movies and first-run TV; and pay-per-view.
So the future might look like not that different from today - high-speed Internet $50, $20 for over-the-top content services, plus pay-per-view for stuff not in your bundle - you save a little money and get a much better service. The cable company/telco probably comes out OK in the long run if it remains a regulated monopoly/duopoly, a lot of the content providers do deals with Netflix, the ones that have legit hits and can go viral will do very well, the ones that depend on being bundled will have difficulty staying in business.
The $30 you save is basically what the cable company pays the cable content networks. So they end up the big losers.
The cable company/ISP might squawk and raise high-speed prices due to all the bandwidth.
And the $8 is artificially cheap - see my comment below, and will probably go up as more content is available and providers get wise.
Some speculation on the end result: Maybe there will be a $10 tier with old movies, TV reruns; then a $20 tier with the basic cable fare, but Netflix will only pay content providers based on what gets watched; a premium tier with recent movies and first-run TV; and pay-per-view.
So the future might look like not that different from today - high-speed Internet $50, $20 for over-the-top content services, plus pay-per-view for stuff not in your bundle - you save a little money and get a much better service. The cable company/telco probably comes out OK in the long run if it remains a regulated monopoly/duopoly, a lot of the content providers do deals with Netflix, the ones that have legit hits and can go viral will do very well, the ones that depend on being bundled will have difficulty staying in business.