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The Absurdity of Blaming Netflix for the Stagnation of Cable

Compared to other countries, broadband in the U.S. is expensive and slow – not to mention not included in the cost of a Netflix subscription
September 20, 2011

Anyone who can stream movies from Netflix has at least a 3 Megabyte-per-second connection to the Internet, which in the U.S. is at least $40, but probably $50 a month. That’s because broadband in the U.S. isn’t just slow, it’s also expensive.

That’s why it makes no sense that writers like Felix Salmon, who is generally excellent on just about everything, describe Netfilx, even pre-split Netflix, as an inexpensive alternative to cable. It’s not. It’s only inexpensive if you take fast broadband at home for granted – you know, like every tech pundit and journalist on the planet.

To be fair, it’s a mistake all of those pundits makes regularly – the conflation of their own situation with that of the wider public. But only one in three Americans pays for broadband, which means that something like two-thirds of the population has access to it. That’s not bad (it’s not great either - it puts us something like 27th in world broadband penetration) and it leaves out precisely the people who are being left behind by both our economy and the digital divide.

If cable operators are seeing their revenues stagnate because Americans can’t afford to pay for cable, it’s not Netflix’s fault. The so-called “cord cutters” are a tiny sliver of the digital elite, well educated and willing to scour the web to satisfy their esoteric tastes. For everyone else, if they can’t afford cable, they probably can’t afford broadband internet, either, and unless they’re a Millenial, I’d wager that just as many Americans would ditch broadband as cable TV.

So whatever we do, let’s not make the mistake of saying that Netflix streaming is cheap. For many, once you throw in the cost of broadband Internet access, it’s even more expensive than plain vanilla cable. That’s a cost that Netflix has in essence passed on to the consumer, fooling us into thinking we’re getting some kind of deal, when really all we’re doing is subsidizing infrastructure that makes possible the elimination of the expense of transporting physical discs.

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