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.
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