×
You will be redirected back to your article in seconds

Netflix and Comcast Reach Internet Connection Agreement

Comcast and Netflix announced a multiyear network-interconnection agreement, under which the Internet streaming company is paying for direct access to the cable operator’s network — promising better video quality for Comcast broadband subs.

The financial terms of the pact are not being disclosed. However, a source familiar with the arrangement confirmed a report by the Wall Street Journal that Netflix is paying Comcast.

“This is pretty much like any other interconnection agreement,” the source said. Comcast is not co-locating Netflix-supplied servers in its network under Netflix’s Open Connect content-delivery network program, this source added, although the video traffic is in fact handed off to Comcast through the Netflix CDN. Nor is the agreement a “peering” arrangement, in which two networks agree on a framework for exchanging Internet traffic, according to the source.

SEE ALSO: Netflix Video Usage More Than 10 Times Amazon and Hulu Combined

Comcast customers experienced a steady drop in bandwidth to Netflix’s servers over the course of 2013. In January 2014, the average connection speed of Comcast customers to Netflix was 1.51 megabits per second, according to Netflix’s measurements — down from 2.01 Mbps in January 2013. Overall, Netflix streaming video represents close to one-third of all downstream Internet bandwidth used during peak hours in North America, according to equipment provider Sandvine.

For Comcast, the deal with the No. 1 subscription-video service may be designed in part to show policymakers that it’s being a good actor on the broadband stage — the company faces regulatory vetting of its proposed $45 billion takeover of Time Warner Cable. That deal, if approved, would create a TV and broadband powerhouse spanning roughly two-thirds of the U.S. and serving more than 30 million customers.

But the main driver behind the agreement was that both Netflix and Comcast wanted to work together in a way that would benefit their mutual customers. The upside of a joint solution “outweighed any pain of compromise” for both Comcast and Netflix, said another source familiar with the deal.

Comcast and Netflix said they have been “working collaboratively over many months” to establish a more direct connection. The deal will “provide Comcast’s U.S. broadband customers with a high-quality Netflix video experience for years to come,” the companies said in a joint statement released Sunday.

Comcast is not granting Netflix any preferential network treatment under the agreement, according to the companies’ joint announcement.

More Digital

  • China Video Streaming Giant iQIYI Loses

    Chinese Video Giant iQIYI Loses $1.3 Billion in 2018

    Chinese video streaming firm iQIYI lost over $1.3 billion in 2018, as revenues and subscriber numbers ballooned. The deepening losses reflected ever higher spending on original content production. Announcing its first full-year financials since a March IPO that launched it onto the NASDAQ, iQIYI said that it lost $1.3 billion (RMB9.1 billion) last compared with [...]

  • Roku headquarters

    Roku Aims to Top $1 Billion in Revenue in 2019, Beats Holiday Quarter Earnings Expectations

    Roku wants to become a billion-dollar company in 2019, and invest more in its ongoing international expansion. The streaming-device maker told investors on Thursday that it expects to generate between $1 billion and $1.025 billion this year, and that international growth was one of its key investment areas for 2019. Roku made these announcements as [...]

  • Vice Media

    Vice Media Taps Joe Simon as Chief Technology Officer (EXCLUSIVE)

    Joe Simon has been tapped as chief technology officer at Vice Media. The newly created role will include oversight of data analytics, engineering, information technology, media operations, media technology, post production, and systems management. Prior to Vice, Simon spent three years as Encompass Digital Media’s chief operating officer. Previously he held the chief technology officer [...]

  • att_logo

    AT&T Suspends YouTube Ad Spending as Boycott Over 'Pedophilia' Videos Scandal Widens

    AT&T, one month after it thought it was safe to advertise on YouTube again, said it is pulling all advertising spending from the world’s biggest video platform. The telco joins a boycott by marketers alarmed by the discovery that a secret group of child predators has been using YouTube to make sexual comments about kids. [...]

  • VR Pop-Up Opens Doors in Manhattan

    Future of Storytelling Pop-Up VR Arcade Is Coming to Manhattan

    Manhattan is getting a location-based virtual reality (VR) pop-up, courtesy of Future of Storytelling: The temporary Story Arcade will open its doors in the Starrett-Lehigh building this coming Saturday, and host a number of VR experiences, including Felix & Paul Studio’s “Traveling While Black,” Fable’s “Wolves in the Walls” and MWM Immersive’s immersive theater VR [...]

  • Amy Winehouse

    Amy Winehouse Hologram Tour Canceled Over 'Challenges and Sensitivities'

    Amy Winehouse will not be “Back to Black” in a holographic live tour after all. The late British singer, who died in 2011, was to be featured in a stage show slated to launch near the end of 2019. But the producer of the show, BASE Hologram, has indefinitely postponed plans for the Winehouse show, [...]

  • Jennifer Lopez

    Jennifer Lopez Joins TikTok App to Promote NBC's 'World of Dance'

    Jennifer Lopez is the latest celebrity to hop on TikTok, the short-form video app owned by Chinese internet giant ByteDance — more proof of the app’s growing traction, and reflective of media companies’ desire to reach its young-skewing base. Lopez had a very specific aim: to get fans excited about “World of Dance,” the NBC [...]

More From Our Brands

Access exclusive content