Netflix CEO Reed Hastings refuses to be a victim of highway robbery — even the online sort.
Little more than a week after the maker of the hit political drama “House of Cards” agreed to pay Comcast for direct access to its high-speed pipes, the company’s chief financial officer said Netflix would not pay through the nose in its dealings with Internet service providers.
“I would say that we still philosophically believe that the consumer is still best served in an environment where a content provider like ourself doesn’t pay an ISP,” Netflix CFO David Wells told attendees this week at the Morgan Stanley’s media and tech conference in San Francisco.
Given the current climate — in which ISPs increasingly want providers of heavy-data flow, like Netflix, to pay up or risk having their stream get bogged down in traffic — Wells said that Netflix is willing to fork over cash for service, but that ISPs shouldn’t look at it as a piggy bank.
“We’re not going to be interested in doing something that’s going to meaningfully change the economics for us,” Wells said. “But we are interested in doing things that, for the right set of economics, improve that subscriber experience long-term.”
Netflix cut a multiyear deal with Comcast last month amid concerns that the cable giants’ customers were getting spotty Netflix service.
Previously, Netflix had been accessing Comcast’s pipes through content-delivery middlemen, rather than directly.
Wells called the deal with Comcast “incremental” and said it wouldn’t impact the company’s costs over sales.
Verizon is also reportedly asking Netflix to pay up for direct access to its roadways amid concerns of similarly spotty streaming to Verizon’s customers. In January, Netflix ranked Verizon the slowest out of 17 ISPs.
Netflix shares rose 2.1 percent on Tuesday to close at $454.98.