For Comcast to pay 9 times more, they're also paying it to many more recipients. They have to pre-stock the shelves, as it were, and they pay royalties not on

For Comcast to pay 9 times more, they're also paying it to many more recipients. They have to pre-stock the shelves, as it were, and they pay royalties not on user-subscription or acceptance, but on simply distributing the content. Aside from Nielsen viewers, they have no really good way of knowing who is watching what channel. They're not ignorant to this fact either -- that I HAVE to buy ChannelIDoNotWant to get ChannelIReallyDoWant is part of their packaging. They know what sells, and they know how to upsell. They're just taking a little bit off the top. Netflix is doing it differently -- they can tell you exactly what I watched, and how much of it I watched, and pay royalties accordingly. It isn't necessarily that the distribution model is better (though it is), it's that the reportability is FAR more precise. In addition, their overhead is considerably less. They aren't getting the content into my home. I pay Verizon something like $100 a month for my internet plan. In the case of Verizon, they're also a cable TV provider. They're still charging to recoup (or using that as justification for) their costs. Netflix doesn't have to pay this, they just have to pay their own upstream bandwidth charges, not for the cost of maintaining a network end-to-end. Offtopic, Grooveshark is $3 a month, as is Pandora. I don't know how Rdio or Spotify can justify their prices, considering I have (to my mind) every conceivable combination of features I could want in streaming radio by subscribing to both Pandora and Grooveshark, for $4 less a month than either of those services.