By Anne Morris and Paul Rasmussen
Netflix chief hits back in ‘fair share’ row
Greg Peters, Co-CEO of Netflix, provided a strong riposte to telco demands that streaming providers should help fund broadband networks in future, noting that growing internet usage is actually a huge opportunity for all concerned.
“Some of our ISP partners have proposed taxing entertainment companies to subsidise their network infrastructure. But as Commissioner Breton said yesterday … it shouldn’t be a binary choice between big telco or entertainment companies,” Peters said during his keynote on Tuesday.
Here, Peters was referring to comments by EU industry chief Thierry Breton, who indicated that he is taking an open-minded approach to the issue of “fair share”, or who should fund the rollout of 5G and broadband networks in future.
He pointed out that Netflix has invested more than $60 billion over the last five years in content, equivalent to more than 50 per cent of its revenue over that timeframe.
“Some of our ISP partners are worried about rising cost, but let’s look at the stats: internet traffic has consistently grown at around 30 per cent a year over the past five years. ISPs have managed this growth, keeping their cost flat over the same period by using efficiency gains within the network,” Peters said.
He also observed that “our margins are significantly lower than those being achieved by either BT or Deutsche Telekom. We could easily argue that these telcos should pay entertainment companies for the cost of the content, because a tax like that would have a significant adverse effect”.
Peters also made the point that while telcos and ISPs claim that these taxes would only apply to companies like Netflix, this will change over time as “broadcasters shift from linear to streaming to get those same benefits for their customers that the internet provides”.
He added: “We’re commercial partners with more than 160 telcos and ISPs around the globe, many of which bundle Netflix directly into their consumer offering. Consumers love these joint offerings … it shows the value that we can have through collaboration.”