Key paragraphs, in my view: Wedbush Securities estimates that Netflix will pay Comcast $25 million to $50 million a year for three to five years, and that the other ISPs want a lot more. We think that Comcast likely sought as much as $0.01/GB transmitted, but [we] think that the companies settled for a fraction of that amount, the financial services and investment firm said in a research note on February 24. [W]e believe that Netflix’s 33 million US streaming customers consume an average of 100GB of data per month, suggesting that Netflix’s throughput across all US broadband is 3.3 billion GB of data per month. At $0.01 per GB, Netflix would be required to pay approximately $400 million per year, over two-thirds of 2014 consensus operating profit. We think that Comcast was motivated to get a deal in place prior to its merger, but do not expect Verizon, AT&T, Charter, Cablevision, or any other US broadband provider to be similarly motivated to strike a deal.
Posted on: Sat, 29 Mar 2014 13:02:39 +0000
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