“The 100 Million Households Paying For Cable Are Subsidizing The Entertainment On Netflix”

The oppressive cable-television industry makes wonderful Netflix possible, as Derek Thompson points out in an Atlantic post. An excerpt:

“The 100 million households paying for cable are subsidizing the entertainment on Netflix. This subsidy allows Netflix to charge an affordable-enough monthly rate so that they can attract a truly mass audience. Just about everything that you love about Netflix (its affordability, its variety, its ability to take risks) is made possible because of just about everything you hate about cable, whose high cost and refusal to offer a la carte creates high margins for entertainment companies, who auction the scraps to Netflix, Amazon and other Internet video companies.

The instinct among some tech writers to implicitly root for Netflix over the traditional cable industry is understandable. Netflix is cheap and easy to use. Cable is expensive and remote controls are terrible. Netflix’s affordability and its willingness to take risks are both made possible by the same traditional TV business they’re threatening.”

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