HomeDigital Platforms & APIsNetflix chief argues fair-share is unfair

    Netflix chief argues fair-share is unfair


    Points out the video streaming firm has invested more than half its income on content

    Greg Peters, co-CEO of Netflix, waded into the fair-share debate in his keynote on Tuesday at MWC. He argued that the growth in internet usage is a big opportunity rather than a reason to force content and service providers to help fund increasing the capacity of networks in future.

    He said, “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.”

    Investing in content

    Peters stated Netflix has invested more than $60 billion on creating content in the last five years – than 50% of its revenues during that peroid.

    He continued, “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% 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 also pointed out, “Our margins are significantly lower than those being achieved by either BT and 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.”

    Future unfairness versus bundling

    Nor was he done yet: he said that if fair-share goes ahead, taxes would only be applied to firms like Netflix that stream content, but in future linear broadcasters will also shift to streaming – a process that in fact is well underway. The BBC’s iPlayer is a good example.

    Peters added that Netflix has commercial partnerships with more than 160 telcos and ISPs worldwide and many of them bundle Netflix into their consumer offers. “Consumers love these joint offerings,” he noted, adding, “It shows the value that we can have through collaboration”.