Netflix softens stance on FCC regs
SAN FRANCISCO — Netflix once fought fiercely for net neutrality, fearing that its online video service would suffer if internet providers were free to discriminate against it.
But now that it boasts one of television’s largest audiences, Netflix isn’t spending much time worrying about the demise of the government rules that once protected it.
With millions of subscribers still flocking to its service, Netflix figures internet providers are unlikely to do anything that might alienate large numbers of their own customers who also turn to Netflix for trendy shows such as “Stranger Things” and “Black Mirror.”
“Netflix’s fortress is so strong now that net neutrality has become background noise for them,” said GBH Insights analyst Daniel Ives.
The Federal Communications Commission officially repealed net-neutrality rules in mid-December. Those regulations barred internet providers like Comcast, AT&T and Verizon from slowing or blocking customer access to apps and sites, or from setting up paid “fast lanes” for favored companies. The rules have been a big deal for smaller startups, as Netflix used to be.
But now Netflix has more than 117 million subscribers worldwide, including nearly 55 million in the U.S., according to the company’s fourth-quarter earnings report, released yesterday. The performance blew past the projections of Netflix’s own management and stock market analysts. It was especially striking given a 10 percent price increase on the company’s most popular subscription plan in the U.S. The company’s stock soared 8 percent to $246.11 in yesterday’s extended trading.
In early 2014, Netflix CEO Reed Hastings wrote an essay advocating strong net-neutrality rules to keep cable and phone companies from imposing tolls on services like Netflix. That was shortly after Netflix reluctantly agreed to pay Comcast, one of the biggest internet providers in the country, for a more reliable connection that would ensure its videos weren’t disrupted in mid-stream.
At the time, though, Netflix had half as many subscribers worldwide as it does now, including 20 million fewer in the U.S. And it had only recently launched an expansion into original programming that turned it into an entertainment powerhouse.
That’s one of the reasons that Hastings softened his tone on net neutrality. By last May, he told a technology conference during an onstage interview that net neutrality is “not our primary battle at this point.” In a show of solidarity, Netflix is still joining the legal fight to restore the net neutrality regulations, but only as part of the Internet Association, a trade group.