Netflix CEO Proclaims The Death Of Net Neutrality Is No Big Deal
from the this-will-just-sort-itself-out dept
We’ve noted repeatedly that while Silicon Valley giants like Facebook and Google are portrayed as net neutrality supporters, that hasn’t been true for many years now. Google stopped giving a damn about the idea back in 2010 or so when it started eyeing the broadband (Google Fiber) and wireless (Android, Project Fi) markets. Similarly, Facebook has never really been much of a genuine supporter, and has actively undermined the concept of net neutrality overseas in developing nations. Once they became powerful and wealthy enough, they stopped seriously worrying about the threat posed by broadband monopolies.
For a while there, Netflix jumped in to supplant Google as a major net neutrality supporter, frequently highlighting how usage caps can be used anti-competitively or how ISPs were abusing interconnection points and their broadband monopolies to drive up prices for competitors.
But as Netflix has grown more powerful, its advocacy for net neutrality has waned proportionally. The company has repeatedly made it clear that now that it’s large and successful, it no longer really has to worry about being bullied by ISPs like Comcast, since it can now afford to pay the abitrary troll tolls they’re keen on erecting around the internet:
“It?s not narrowly important to us because we?re big enough to get the deals we want,? Hastings said. It was a candid admission: no matter what the FCC decides to do with Title II, Netflix isn?t worried about its ability to survive. Hastings says that Netflix is ?weighing in against? changing the current rules, but that ?it?s not our primary battle at this point? and ?we don?t have a special vulnerability to it.”
That’s arguably myopic, and it’s unlikely the next Netflix is quite so confident. Because Netflix is wealthy and powerful enough to fend off anti-competitive efforts by AT&T, Verizon and Comcast, doesn’t mean the death of the rules won’t be problematic for thousands of small businesses, startups and entrepreneurs who’ll be operating on a decidedly-tilted playing field.
Netflix doubled down on its myopia this week during the company’s conference call with analysts and the media, when CEO Reed Hastings tried to insist that the death of net neutrality rules here in the States was no big deal. Why? Apparently, “consumer expectations” will somehow magically keep telecom giants on their best behavior:
“Around the world net neutrality has won as a consumer expectation,” Hastings said Monday during a video discussion of Netflix’s second-quarter financial performance. “Broadly around the world consumers have the expectation and ISPs are delivering it,” he added, referring to Internet service providers.
“The net neutrality advocates have won the day in terms of those expectations,” he said.
That’s not how any of this works.
Consumers can have all the “expectations” they want in terms of a healthy, open internet. But expectations mean nothing in the face of limited broadband competition and napping or compromised regulators, since there will soon be no penalty for behaving anti-competitively. ISPs right now are on their best behavior because they’re worried about adding fuel to the looming lawsuits against the FCC. But should ISPs win in court, we’ll quickly get a crash course on how little “expectations” will matter in the face of unchecked monopoly power.
Filed Under: competition, net neutrality, reed hastings, streaming video
Companies: netflix
Comments on “Netflix CEO Proclaims The Death Of Net Neutrality Is No Big Deal”
We are now beholden to government monopoly power and data retention and government abuse of takedown because they now own all the pipes of our new shiny monopoly Internet.
“Broadly around the world consumers have the expectation and ISPs are delivering it,”
Yes… and broadly around the world, net neutrality isn’t that much of an issue that’s being discussed as a result of that delivery.
It’s in the US, where ISPs are broadly NOT delivering that this seem to be a major issue. Hopefully, people can understand this before the tactics of the same corporations responsible for the problems in the US start infecting ISPs elsewhere.
Your new precious, Netflix lost another $2 billion in quarter.
By my quick addition, that means has $22 billion of debt.
Clearly, streaming of legally obtained content isn’t practical. Netflix would have burned out by now in any prior environment where shareholders actually worry about profit.
Anyhoo, why shouldn’t the corporations that most heavily clog teh internets be paying at least in proportion to that traffic, instead of flat rate which is effectively subsidized by your Aunt Tilly who only checks email? — That’d be NEUTRALITY. What you advocate is hidden subsidy.
Re: Your new precious, Netflix lost another $2 billion in quarter.
I’m not sure what your point is supposed to be. Based on tone, I assume something derogatory?
Re: Your new precious, Netflix lost another $2 billion in quarter.
“Your new precious, Netflix lost another $2 billion in quarter.”
Citation?
“By my quick addition, that means has $22 billion of debt.
Context? Almost all major corporations have lots of debt, even those you shill for. A big scary number is meaningless, unless the context shows they are worse off than competitors.
“Clearly, streaming of legally obtained content isn’t practical.”
Which is interesting for you to say, given how you keep whining that people make so much money from illegally streaming it. If the difference between profit and failure is the purchase of the legal licences, it’s your heroes who would appear to be the problem.
“Anyhoo, why shouldn’t the corporations that most heavily clog teh internets be paying at least in proportion to that traffic”
They do. So do their customers. Why do people like you keep trying to demand a third payment.
“That’d be NEUTRALITY”
How the hell can we be this far into the discussion and some be able to even to pretend to be this ignorant about its subject?
Re: Re: Your new precious, Netflix lost another $2 billion in quarter.
This article backs up the $2 billion loss in the last year, not quarter. But it implies that they only have over $3 billion in debt.
Re: Re: Re: Your new precious, Netflix lost another $2 billion in quarter.
You see, that’s why I always ask for citations on bare claims, the real figures never seem to add up. A newer article may back up his figures, but I’ll wait for him to provide the evidence, since it’s his claim. No point wasting time on discussion if he can’t back up his figures.
The article you linked to also points out an important distinction – “debt” isn’t necessarily bad. They have stated that they’re using the additional money to invest directly in Netflix Originals, which they expect to get a good return, but not in the short term. I fail to see the problem with that.
From what I can see, all that’s happened is that Netflix has recently reported that in the last quarter subscriber growth has been soft compared to expectations (though they have still taken on millions of new customers), and that’s caused shares to dip because some investors think that meteoric growth is infinitely sustainable. For those of us the real would, that company seems to be doing fine..
Re: Re: Re:2 Your new precious, Netflix lost another $2 billion in quarter.
So, I need to note that the article linked from April 2017 was reporting estimates of future Cash flows, not profit or loss. So it does not back a $2B loss, it backs $2B in negative cash flow. That does affect debt a bit more Those estimates were wrong. This Statement of Cash Flows shows they actually had positive cash flow. In part because they did take on debt, up to $6B (not $22B). But as we note, That isn’t a bad thing.
However, because of the debt intake, investor concerns will likely remain, as its unclear whether Netflix can maintain a positive cash flow. But if they remain firm that positive cash flows are not the goal, they should whether through.
Re: Your new precious, Netflix lost another $2 billion in quarter.
What are the odds that you’re even a real person?
I bet there’s a 9 in 10 chance that you’re just a troll bot made by some wealthy corporation/etc. advocating against net neutrality.
Re: Your new Troll
So, your derision of Netflix model – should I take it to mean that you support free torrents?
Because honestly, I prefer the ease of use at Netflix over torrents.
I admit that the studios would kill Netflix off in a hot minute if they could and are doing their level best to restrict the selection while raising what they charge Netflix for licensing.
But still, NetFlix and other streaming services do at least try to keep viewers engaged.
Re: Re:
You know which corporations clog the Internet? Your RIAA, who asked the rest of the Internet to police itself on their accusations, and on their behalf. Things would run a lot smoother without your DRM fucking up the arteries.
Re: Your new precious, Netflix lost another $2 billion in quarter.
You seems to fail to understand the differences between Loss, the short fall of revenues compared to matched expenses, and Debt, money borrowed that is to be repaid in a specified manner. Probably don’t understand that investment isn’t debt either. Likely in fact, you don’t understand GAAP accounting in any fashion.
But the amount of ‘Loss’ a company has generally has little to do with the ‘Debt’ it is carrying. Incurring debt does not affect Profit or Loss, and the payment of interest on debt should only a small portion of expenses. Similarly, when the business posts a loss it does not directly increase debt (if you have low cash reserves, you may have to take on debt to keep the bills paid, but operating capital is normally not obtained for the specific amount of the loss, rather a larger value to help pay bills for many months)
And in the end, Netflix’s debt was primarily obtained to fund content creation, and has nothing to with posted losses.
As This Statement of Cash Flows shows, Netflix has has a positive cash flow over the last year, and as of the start of Q2 2018, had $2.6B in cash and equivalents (assets that can be converted to cash with little fuss within a month).
Further investigation of the Financials shows Netflix is not running at a loss, and estimates from April 2017 about negative cash flow, not profit or loss, were incorrect, and positive cash flow reigned in 2017. Moreover, it has been profitable as well.
Re: Your new precious, Netflix lost another $2 billion in quarter.
Because it costs the same to install and maintain that final mile whether it is used to full bandwidth, or left idle. Also, all the streaming services pay to deliver their data to the ISP’s and install and maintain CDNs to minimize the load on the Internet backbone.
In reality differential pricing based on bandwidth usage will subsidize aunt Tilly, and be used to make up for falling cable subscriptions.
That’s very big of Hastings to proclaim considering that (1) Netflix is no longer an infant that can easily be suffocated in its crib, and (2) No doubt, existing f*ck-you-pay-me-deals with telcoes to ensure that its traffic will *not* find itself on dirt roads rather than the autobahn as a direct result of Pai having murdered net neutrality. However, I don’t believe that Joe-Blow’s-Ubetcha-brand-flix is quite on the same page.
I don’t know, Reed. "Consumer expectations" sure as hell didn’t stop Netflix from releasing a ton of dog crap content this year.
Re: Re:
Huh, why did you claim that then link to an article that says nothing of the sort?
Besides, Netflix has surpassed my expectations so far this year, both with quality of service and content, so I really don’t know why people like you try to keep attacking them on that front. They have excellent content appearing all the time (not 100% of the time, but then nor do any other service you can name)
Re: Re: Re:
“Of course Netflix has been taking heat for focusing on quantity over quality, resulting in a string of high-profile duds.”
Try reading instead of impulse replying, Paul T. But I know you have a lot of light bulbs and LOLs you need to rack up so you can feel good about yourself.
Re: Re: Re: Re:
You linked to an article about AT&T planning some potentially bad decisions regarding HBO, that contains a throwaway line about Netflix, that is uncited and easy to counter. That proves nothing of what you said, unless you’re the kind of idiot that thinks “I agree with those words” is a kind of evidence.
Instead of being an asshole, as is your usual state, how about explaining what I missed? let’s leave aside the fact that purely subjective claims are irrelevant here to begin with, how about you just back up what you’re pretending to back up?
“I know you have a lot of light bulbs”
Mine are also turned on occasionally, unlike the dim bulbs we have to contend with around here.
Re: Re: Re:2 Re:
You don’t know anything about me and I’ve never directed a comment at you in my life.
Spoken like a true asshole. Must be your usual state.
Re: Re: Re:3 Re:
“You don’t know anything about me and I’ve never directed a comment at you in my life”
Yeah, that’s the beauty of anonymity, isn’t it? Attack people and state false claims, and then claim it was some other AC when called out.
I do notice you still haven’t backed up what you originally said, though.
Re: Re: Re:4 Re:
Holy shit, guys. MyNameHere is back!
Re: Re: Re:3 Re:
Read up on Gravatars, you fucking asshat!
Re: Re: Re:3 Re:
Oh look it’s captain projects all day and runs away to drink more paint.
Re: Re: Re:3 Re:
“You don’t know anything about me and I’ve never directed a comment at you in my life.”
I know you’re an asshole…
"Local wolf proclaims he doesn’t see the ban on killing sheep being lifted as a big deal."
“That’s arguably myopic”
Something that seems to escape the mind once you think you are successful is the concern for your potential customers which can and will turn on you while you are not looking, where is your business without customers?
yeah
and yet no one complains when phones REQUIRE finger prints and facial recognition…
‘These stupid trees tho.’
Priorities people
Re: yeah
“phones REQUIRE finger prints and facial recognition”
When did that happen? Did you lose the options screens in your device to turn these features off, or were you forced to change to a phone with those features with no choice of getting a device without such things to begin with?
“Priorities people”
Exactly. Problems related to NN – pretty much inevitable for people in the US, since their ISPs have a long history of doing so and competition availability is getting lower.
Whatever you’re trying to say – not a particular issue at the moment, even if remotely rooted in reality, and every devices with such features has plenty of alternative options that don’t.
Re: Re: yeah
-network connectivity and privacy are 2 sides of the same coin
-remember this when you’re presented with the ‘opportunity’ to sign up for that mark in your right hand or forehead
Re: Re: Re: yeah
You’re still talking nonsense. There is currently no need to use either form of authentication, and the tech still isn’t good enough to even attempt to remove other forms in the foreseeable future.
Is this one of those “I can’t disagree with anything said in the article so I’ll try and deflect the conversation with silliness” kind of tactics, or do you honestly believe that you have to use one of these technologies?
Re: Re: Re:2 yeah
Thumbs up on that PaulT. Our IT directs us to not use either of those forms of authentication (because both flat out suck as security). A minimum 8 digit/character pin is recommended…
Re: Re: Re:3 yeah
Apart from the fact that they don’t really work a lot of the time, the problem with biometrics is that if they’re compromised, you can’t replace them. Forget that current tech can be fooled by sticky tape and photos, you absolutely have to have some kind of a backup in case of compromise.
Given that, I don’t see anyone with any common sense actually mandating biometrics at any point, therefore devices that lack them will remain available for the foreseeable future. Whereas, the damage done by removing NN protections is already evident.
It’s good to be paranoid, but some people need to stick to worrying about the real dangers.
Re: Re: Re:4 yeah
I could see mandating biometrics… as the identity, not the authentication.
I.e., instead of a username you scan your finger / eye/ whatever, but you still have to put in a password or suchlike in order to be allowed in.
I’m not sure that would be beneficial enough to warrant the trouble it would take to implement it, but the use case of identification would seem to be one where the "can never be changed" characteristic of biometrics isn’t a problem – at least for cases where no one person should ever have more than a single identity in the system.
Re: Re: Re:5 yeah
” at least for cases where no one person should ever have more than a single identity in the system”
Well, that’s where the problems start, you can never assume that. Partly because nature is fickle and there do exist people with identical biometric identifiers, even though the chances are very tiny that they should exist. Partly because you’re assuming that the data was captured accurately at the original source and/or not tampered with after being stored in the system. Partly because it would also assume that the data is being accurately captured at the point of use. You can’t depend on any of these.
Having it as a “username” is certainly better than as the sole identifier, but it’s still very flawed – and a Kafkaesque nightmare for anyone who falls between the cracks when everybody is assured the biometrics are infallible (as they most likely would be).
Re: Re: Re:6 yeah
While those are valid objections, and may be enough to be conclusive on their own, they seem to be based on “one identity, multiple people” (because biometric identifiers aren’t actually unique to the person involved) – not on “one person, multiple identities”, which is what the fragment you quoted was talking about.
For example, at my workplace, I have multiple user accounts – one with the same access as everyone else, which I use for day-to-day activities, and one with elevated access (since I’m somewhere in the middle of the sysadmin hierarchy), which I use occasionally for tasks that need it. I also know the credentials for multiple generic accounts, shared between numerous people, used when person-specific access is not needed.
That’s “multiple identities in the same system for a single person”; if biometrics were used for the identity, there’d be no practical way to have my two distinct access levels for different circumstances (and using generic accounts at all might be hard), so that system is one where using biometrics for identification wouldn’t do.
But it’s certainly possible to imagine a system which prohibits setting up more than one account per person – a voter-registration or driver’s-license database, for example – and enforces that, at least in part, by using biometric identifiers as the “username” for the account. If properly implemented, that would mean that you’d be able to safely assume that – returning to my original phrasing – no one person ever has more than a single identity in the system.
If biometric identifiers are in fact not sufficiently unique to rely on for this purpose, using them in such a way would probably still be a bad idea, of course. But that’s a different basis for objection from the “biometric identifiers can’t be changed” argument I was responding to.
Re: Re: Re:2 yeah
Assuming they’re not just trolling I’m pretty sure second one is referencing the ‘mark of the beast’ gibberish, so yeah, ‘nonsense’ would be putting it mildly.
Re: yeah
This assumes that A) that is an actual issue, B) that only one issue can be addressed by any one person at any one time, and we’re not allowed to look at more than one issue before fixing, and C) that that issue is higher priority than this one.
A) Is case-by-case, depending on whether the phone communicates that information to a home server that can then be abused – additionally, not all phones require it, so in this particular case, there isn’t currently a monopoly of service requiring all people to have the phones that use biometrics for security purposes. You can just not have a phone that does that (like I do)
B) People can, in fact, address more than one issue at a time. There’s no reason to focus on phone biometrics to the exclusion of net neutrality, especially when net neutrality and the affiliated consumer advocacy and consumer privacy concerns could wind up affecting something like phone biometrics.
C) See B.
“What about this other issue” is only useful when you can relate the other issue to the current issue. Please try again.
net-positive
Isn’t that the whole point: because the lack of NN hurts other –mostly much smaller– content providers much more than it hurts Netflix, it gives Netflix a competitive market advantage that outweighs all disadvantages, a "net positive".
We should keep in mind that ISPs are under no legal obligation to permit all traffic. They can block, redirect, or throttle anything they want. People may have forgotten the "blocking war" that was raging in the early 2000s, when many ISPs went out of their way to try to kill off P2P traffic such as Napster and Kazaa, first with port-blocking and later with traffic sniffers. Then Comcast came up with a novel idea, to inject forged reset commands into the data stream to cut the connection between bittorrent users.
The only thing that made ISPs back off from from likewise sabotaging other high-traffic services like Youtube-Google and Netflix was fear of the legal muscle that these wealthy companies could muster. Like it or not, it seems the only thing that keeps wealthy monopolistic (and arguably evil) companies in check is having other wealthy monopolistic, evil companies fight with them.
Re: net-positive
Alternatively, robust legislation designed to curtail this type of behavior and protect the consumer, with heavy enough penalties that non-compliance is a bad business decision.
Re: net-positive
Except they are selling access to the Internet, not some subset thereof. Now they are trying to say you have to pay more and/or get worse service for that some subset while they manage to get ‘their’ subset through with some cost/service advantage, which is often a higher cost.
Gee, it’s almost like the modern corporation is an inherently sociopathic legal construct that only values money.
Re: Re:
Certainly not a person
Re: Re:
You mean the monetary system.
The death of Net Neutrality is a bigger thing than the death of Netflix would be.
Gee, it’s almost like the modern corporation is an inherently sociopathic legal construct that only values money.
Really?
Netflix CEO Proclaims The Death Of Net Neutrality Is No Big Deal
– “Douchebag”
AricTheRed
His motivation here is to deflect the effects of net neutrality on the stock price. He can’t say that it will effect Netflix because then that statement will directly effect the stock price. And so he has to say that Netflix will be just fine. And he can’t lie about why it will be fine, so his reason has to be something subjective that can’t be quantified and measured.
Yes, i agree that it would be better for everyone if he also added that even though net neutrality wont effect Netflix, it is bad for the internet ecosystem.
Ah, the siren song...
…of “Fuck you, I got mine.”
I read “Netflix CEO Proclaims The Death Of Netflix Is No Big Deal”.
That's a feature, not a bug
That’s arguably myopic, and it’s unlikely the next Netflix is quite so confident. Because Netflix is wealthy and powerful enough to fend off anti-competitive efforts by AT&T, Verizon and Comcast, doesn’t mean the death of the rules won’t be problematic for thousands of small businesses, startups and entrepreneurs who’ll be operating on a decidedly-tilted playing field.
Otherwise known as ‘potential competition’, which Netflix is making clear they could not care less about because they are already in a position where they’re pretty sure that it won’t impact them much.
Unfortunately by flipping position from pro-network neutrality to, if not anti- then at least indifferent to, Netflix is also undermining any arguments they have made in the past on the subject. It’s trivial now to spin anything they said before as being entirely self-centered, said not because they truly believed in the idea of network neutrality, but simply because it benefited them at the time.
I almost hope this comes back to bite them in the backside(‘So, after careful consideration and looking at network traffic, it seems we’re going to have to ask for a little extra if you want your service on our network…’), and the only reason at this point that I don’t is because it would result in the general public being screwed over even more.