Peter Kafka

In April, Netflix signed a Web traffic deal with Verizon. Now it is telling some of its customers that Verizon’s pipes -- and, presumably, other Internet service providers as well -- aren’t up to snuff.

Vox Media designer Yuri Victor tried watching Netflix on his MacBook and ended up seeing this message from the streaming service on his browser, blaming Verizon for slow speeds:

“The Verizon network is crowded right now.” Netflix spokesman Jonathan Friedland, via Twitter, described the messaging as a way to “keep members informed.” Via email, he said the wording was a “test that advises members when their network is congested,” and that it isn’t specific to Verizon. “We’ll see whether they think it is valuable or not.”

Verizon PR representative Robert Elek responded: “This is a PR stunt. We’re investigating this claim but it seems misleading and could confuse people.” This messaging is much clearer, and Netflix is delivering it directly to its customers: There’s a problem with your picture. Blame the guy who owns the pipe.

The Apple/Beats Electronics deal is now official, and Apple says it will spend up to $3 billion to buy the headphone maker and streaming music company.

Why? Because Apple likes the businesses Beats has already built, and wants to make new stuff with the help of its employees, says CEO Tim Cook.

“We could build about anything that you could dream of. But that’s not the question,” he said in an interview with Re/code. “The thing that Beats provides us is a head start, and it provides us with incredible people, kindred spirits.”

Apple says it will keep the Beats hardware brand intact, as well as the Beats Music streaming service. It also says Beats Electronics co-founders Jimmy Iovine and Dr. Dre will join the company as full-time employees.

Apple says the deal will close by the end of its fiscal year, which means by the end of September 2014. It says the deal will be accretive in its next fiscal year.

ESPN has already said it may let you pay for its sports programming on the Web without subscribing to a traditional pay-TV package. Now it is floating the idea of selling some of its stuff directly to consumers, just like Netflix does.

ESPN boss John Skipper says that in 2015, the company may sell a package of Major League Soccer games to Web viewers, who could pay for the games without subscribing to ESPN itself. That would essentially replace the MLS Live service that the league currently markets to fans on its own, which costs $65 a season and gives subscribers digital access to most of the league’s games.

If ESPN goes through with those plans, it would mark the first time the network has served up sports on an a la carte basis. And if you’re a certain kind of TV-of-the-Future thinker, you can argue that it’s evidence that the bundle that supports the entire TV Industrial Complex is starting to unwind.

But the other way to look at ESPN’s trial balloon is that it shows the cable company’s commitment to the cable business model, where pay-TV subscribers pay a lot of money to get all of ESPN’s programming, and all of ESPN’s channels, whether or not they actually want ESPN. That’s because ESPN isn’t taking anything out of its bundle -- it’s just talking about adding a premium tier for a tiny slice of fans willing to pay extra.

Earlier in 2014, when viral content spreader Upworthy saw its traffic decline, lots of people assumed that this was because of Facebook, which is tinkering with the way it surfaces other people’s stuff in its News Feed.

Not so, say Upworthy’s leaders: Traffic is an unpredictable thing, and it had shot up dramatically last fall, so it was reasonable for it to move around a bit. But a couple months later, Upworthy’s traffic continues to head downward.

It’s not falling off a cliff, but it is shrinking, according to comScore. In April it had 10.7 million visitors, its lowest levels since August 2013 -- but still way ahead of where it was before.

So what’s going on now? It’s our fault, says Upworthy co-founder Eli Pariser. But it’s also a choice, he explains.

If you don’t pay for cable, and you get all your video from the Internet instead, how much bandwidth do you eat up each month? Quite a bit, it turns out. Much more than everyone else.

Sandvine, the broadband networking company that provides periodic reports on Web usage, says that the top 15 percent of streaming video users go through 212 gigabytes of data month. That’s more than seven times the average broadband user, who uses 29 gigabytes.

As heavy broadband users start bumping up against data caps, it will also highlight the way that some broadband providers differentiate between digital video they send through their own “managed service” pipes -- which doesn’t count against usage caps -- versus digital video served up by the likes of Netflix, which does count against caps.

The traditional TV industry may be reaching its apex, at least when it comes to ads. But the TV Industrial Complex won’t go down without a fight. Two of the weapons they’re using: “Stacking rights” and “Dynamic ad insertion.” These are boring words for relatively basic ideas, but they’re still important for TV programmers and pay-TV providers.

Here’s why:

• Stacking rights just means “the ability to show viewers the entire current season of a show, instead of just the last few episodes, via video on demand systems.”
• Dynamic ad insertion just means “the ability to put new, relevant ads into video on demand repeats, instead of musty spots that we loaded into the system weeks ago.”

So in this case, what this means is: Comcast will have the ability to show every episode from the current season of some of Turner’s shows, like “Falling Skies” and “Robot Chicken,” on video-on-demand. And it will have the ability to put new ads into those shows when you watch them.

Dish Networks is trying to put together an “over the top” pay-TV offering, which would deliver cable channels over the Web, priced at around $30 a month.

But rival satellite service DirecTV doesn’t seem all that intrigued by the notion.

CEO Mike White talked about the pros and cons of selling Web TV. Short version: It’s easy, technically speaking, to stream pay TV over the Internet. But it’s hard to make much money assembling a package of channels that the TV programmers would be willing to sell, at a price consumers would be willing to pay -- because no one in the TV Industrial Complex wants to fundamentally disrupt their own business, which is still working very nicely.

[Commentary] Comcast and Time Warner Cable? Doable, but rough. Sprint and T-Mobile? Really rough. But if AT&T wants to buy DirecTV, it has decent odds of getting it done.

At least from the regulators’ perspective. So let’s say regulators say the deal is OK with them. What does it do for AT&T? That one is harder to parse. It’s hard to argue, as Comcast and Time Warner Cable can, that the two companies can find operational efficiencies -- since maintaining telecommunications/broadband pipes and operating satellite TV networks are two distinct things.

The most obvious answer is that combining the two companies will give them more power when it comes to negotiating licensing deals with TV programmers. But that’s only relevant if AT&T decides or is allowed to keep its pay TV subscribers. And even then, the combined company may not be able to do much more than it was doing as two separate companies. Analyst Craig Moffett estimates that AT&T might eventually end up saving $400 million a year in programming costs.

The TV Industrial Complex is worried about cord-cutters -- people who are bailing on their pay-TV subscriptions and turning to the Web instead.

And the TV Industrial Complex is even more worried about cord-nevers -- twentysomethings who have grown up with Web video, haven't signed up for pay TV and may never sign up.

So here are a couple of soothing data points for the TV guys: About 75 percent of millennials are paying for cable, satellite or telecommunications television. And that number has stayed fairly steady since 2007, even though their Web video options have exploded since then.

Those data points come from ESPN, citing Nielsen. The sports powerhouse delivered them at an investor event earlier this month. So it would be reasonable if you took them with big helping of salt: “TV Business Doing Well, Says TV Business”.

Primetime TV ratings grew -- by about 4 percent -- during the first three months of 2014. Analyst Michael Nathanson says that’s TV’s best performance since the last quarter of 2007.

And it’s the first time TV has grown, period, in more than a year. Nathanson attributes the boomlet to a confluence of big live events in the beginning of the year — the Sochi Olympics, the Oscars, NFL playoffs and the NCAA tournament -- plus an insane winter that kept everyone locked up in their houses, huddling around the plasma for warmth.