Articles in the June 13 online editions of The New York Times and, The Wall Street Journal revealed that the Department of Justice is engaged in an antitrust investigation to determine whether cable companies and other video distribution services are actively working to inhibit competition from over-the-top (OTT) content providers like Netflix.
At issue is the cable provider’s use of monthly broadband consumption limitations, bandwidth caps and other throttling devices that force subscribers to use the TV Everywhere service offered by the MVPD. In practice, a user may access content directly from an Internet-based provider; however if the user’s MVPD also provides his broadband service, he may notice a reduction in download speed or additional bandwidth fees on his bill reflecting the different methods that limit available broadband.
The TV Everywhere business model requires user authentication. Premium content such as HBO, Showtime and Starz! require that the user purchase a subscription to the linear version of the programming in order to access the same content on the TV Everywhere service.
The MVPDs note that because the TV Everywhere product is part of the subscriber’s regular service, the correct way to access Internet-based content is by utilizing the TV Everywhere feature of the MVPD’s pay-TV service. Companies like Netflix have complained that these tactics violate the FCC order on net neutrality.
The competition for video streaming and DVD rentals heated up this week. Verizon Communications announced that it has entered into an agreement with Redbox’s parent company Coinstar Inc. to begin offering a video service that will compete directly with Netflix. Read more
It was widely reported on December 8 that Verizon was planning a Netflix-type killer service. Described as a subscription on-demand video service featuring films and television episodes, the new service started to take on additional intrigue when it was revealed that Verizon is in discussions with RedBox.
RedBox, recognized for providing a simple, user-friendly and low-cost kiosk service, also has been rumored to have a streaming service under consideration. The Verizon element adds fuel to the probability fire. Information provided by Verizon indicates that the service will be totally Internet based and will likely support Apple’s iOS platform, Android, Google TV, XBox, Roku and other streaming boxes and browsers.
If the rumors are true that launch is planned for mid second quarter 2012, Verizon will need to get busy putting TV show deals together.
For more, see this Reuters article.