Video streaming giant Netflix has recognized the compelling financial logic behind Washington’s anti-piracy efforts.
In a recent filing with the Federal Elections Commission (FEC), Netflix revealed that it has created its own political action committee called FLIXPAC, designed to support anti-piracy measures in Washington and the candidates that favor them.
The FEC filing, made April 5, was first spotted by Politico. The company has seen its spending on federal lobbying ramp up in recent years, going from approximately $20,000 in 2009 to half a million in 2011, amid heated debates in Washington over restrictions on Americans’ Internet use.
Those restrictions, represented most clearly in the Stop Online Piracy Act (SOPA), were initially supported by Netflix CEO Reed Hastings, who reportedly sent a letter to the Chamber of Commerce expressing solidarity with that bill’s ultimate goals. But as the Internet backlash began and a growing number of major websites joined a mass work stoppage protest earlier this year, the company insisted to reporters it had been “neutral” on the matter all along.
This year, however, the company would seem to have compelling reason to join the fray at the level of their advancing competitors at Time Warner and Comcast. Both cable network operators have been angling to compete with Netflix by launching their own on-demand video services, along with implementing some policies like bandwidth caps that impose a monthly data limit, which limits the amount of time some users can spend watching streaming video on sites like Netflix. Comcast, the nation’s largest cable network operator, even went so far as to exempt its own video service from the bandwidth caps, giving them a clear leg up on Netflix.
Added, Comcast and Time Warner were both big supporters of SOPA and other anti-piracy measures, and both have signed on for the content industry’s “graduated response” plan to police individual users’ Internet habits and inject stern warnings onto the screens of customers who might be flouting copyright law by downloading media on peer-to-peer networks. Those measures will take effect across most U.S. Internet service providers’ networks on July 1.
Similar rules in France, codified in law instead of by a private agreement between stakeholders, were recently shown to tremendously benefit content creators and network operators because they reduce overall rates of media piracy and drive up use of streaming networks. A recent report by the French High Authority for the Dissemination of Creative Works and Protection of Rights on the Internet found that intercepting pirate traffic and delivering stern warnings of legal perils did help cut down on overall use of media sharing software by nearly 45 percent, growing digital platforms in France by about 20 percent over just two years. (Despite this growth, the movie and music industries in France still shrank in recent years.)
Still, growth in the streaming media market is precisely what Netflix, and its competitors, want to see. To those ends, Comcast and Time Warner both have PACs that have donated millions in recent election cycles. Both companies’ PACs notably gave significant amounts to a PAC supporting Rep. Lamar Smith (R-TX), the author of SOPA, but Comcast moreso than Time Warner.
Both PACs similarly tend to lean Republican, but not by much: 2012 contribution data shows that Time Warner gave $304,500, with 44 percent to Democrats and 56 percent to Republicans; whereas Comcast donated $980,000, with 48 percent going to Democrats and 52 percent to Republicans.
In the face of the recent numbers out of France, and its competitors’ apparent escalation in political giving over prior election years, Netflix finds itself with compelling reason to throw yet more money at Washington lawmakers to bend ears and elevate favored candidates.
What’s not clear is how the Internet and its activists, many of whom remain ardent supporters of services like Netflix as the true silver bullet for piracy, will react to news that their subscriptions dollars are now going to a company that appears poised to become a prominent advocate of widely opposed limits to Internet freedom.
FLIXPAC did not respond to a request for comment.
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Brad
[This message has been edited by twofatguys (edited 04-10-2012).]
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04:29 AM
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No, Netflix Has NOT Formed A Pro-SOPA SuperPAC from the bad-reporting dept Update: Netflix has confirmed through its official Twitter account that the PAC was not set up to support SOPA/PIPA.
Okay, can we kill this story quickly? There's a ton of buzz going around claiming that Netflix has built up a Super PAC to promote a pro-SOPA agenda. As far as I can tell, this is simply not true. It started from a report in Politico, which mentioned (accurately) that Netflix had formed a PAC called FLIXPAC, and is getting much more aggressive in the lobbying/legislative front. This follows Netflix's trend of spending more and more on lobbying in the last few years: $20,000 in 2009, $130,000 in 2010 and $500,000 in 2011. Where it gets odd is that Politico tries to tie this to SOPA/PIPA by listing out those amounts and noting that the $500k in 2011 was spent "as legislative debates over the Stop Online Piracy Act, Protect IP Act and Video Privacy Protection Act raged."
In turn, the folks at RT played a game of bad reporter telephone and spun it into Netflix funding a pro-SOPA super PAC, "whose main goal is to promote SOPA-like legislation." I don't know what's up with the folks at RT. While their TV reporting can be quite good, their online reporting is abysmal at times. They clearly exaggerate stories or write from a position of ignorance.
The truth is that Netflix was basically neutral on SOPA, knowing that it had to balance its technology side and the fact that it is constantly negotiating with the big Hollywood studios on deals. Politically, it basically had to take a neutral position. But the company knows better than to out-and-out support really bad internet legislation. The company has been active on things like net neutrality and the Video Privacy Protection Act -- things that do have a direct impact on it. Sure, it would have been great if Netflix had been a strong anti-SOPA faction, the fact that it stayed neutral and is now ramping up its lobbying does not, in any way, mean that it's suddenly pushing for pro-SOPA legislation. The company appears to have a lot of other things on its legislative agenda.
Does it matter if the story is right or wrong? SOPA is still alive and kicking and does have supporters and is funded. Of course they are changing the name and hiding the bills hoping we don't notice this time.
Does it matter if the story is right or wrong? SOPA is still alive and kicking and does have supporters and is funded. Of course they are changing the name and hiding the bills hoping we don't notice this time.
I think it matters. We know that Sopa (and similar legislation) is wrong, but we can't fight them by making up things about them. Then we end up as "The Boy Who Cried Wolf", and people won't listen when things get really bad.
Truth has to win out, if we lie to win we are no better than the people we are fighting.
------------------ Dr. Ian Malcolm: Yeah, but your scientists were so preoccupied with whether or not they could, they didn't stop to think if they should. (Jurassic Park)
I'll be honest, even without them lobbying for whatever they are lobbying for I am looking at other services. Netflix just ends up being irritating to me these days. Most of the things I watch through them can be found for free on the parent website (TED talks for example).
Brad
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07:17 PM
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Posts: 9105 From: Indy southside, IN Registered: Jul 2009
