Cheaper bandwidth boosts Netflix streaming model; caps seen a non-issue

Phillip Swann may not consider a la carte programming a good thing, but Netflix (Nasdaq: NFLX) has made a business out of selectively offering only what consumers want to buy, first through in-the-mail rentals and most recently via streamed content over increasingly inexpensive IP networks.

According to Frost & Sullivan analyst Dan Rayburn, streaming costs have halved in the last two years, falling from about 5 cents to two hours of standard definition video to 2.5 cents.

Rayburn also disputes the common impression that bandwidth caps from Comcast (Nasdaq: CMCSA) or AT&T (NYSE: T) will cut into Netflix traffic. Those caps, he wrote in an analyst post, "won't have any material impact on Netflix now or anytime in the near future. Years from now they could, if the ISPs don't raise their cap levels, but right now caps are not a big deal to Netflix."

For more:
- Home Media Magazine has this story

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