Netflix challenge to traditional TV

Netflix has emerged as a leading contender in the fight to be the American consumer’s gateway to the universe of movies and television shows, pitching itself as an alternative to cable and satellite television operators’ channel bundles.

During peak times, Netflix now accounts for a fifth of downstream traffic on US broadband networks. This success has made Netflix a symbol for the growth of “over the top” services, which offer video online without a set-top box, as Apple, Amazon and others do. It is also turning Netflix into a target for traditional distributors anxious about “cord-cutting” – people giving up their cable and satellite contracts. At a UBS media conference in New York this week, the message emerged that traditional content owners and distributors will not give up their old economics without a fight.