Hastings: Charter-TWC Deal a ‘Tremendous Positive’

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Netflix CEO Reed Hastings volunteered on the OTT giant’s Q4 earnings interview Tuesday (Jan. 19) that Charter Communications’s pending acquisition of Time Warner Cable would represent a “tremendous positive” for the over-the-top video industry.

That of course was in reference in part to Charter’s current settlement-free peering policy, and its pledge to extend that policy to the systems it’s poised to acquire from Time Warner Cable and Bright House Networks. Netflix, which has already offered support for the deals, notably operates in a paid peering model with TWC, with Bright House benefiting from the TWC-Netflix agreement. Netflix also has paid peering deals with Comcast, Verizon Communications and AT&T. 

Charter's proposals represent a “huge step forward for U.S. policy [with respect] to OTT,” Hastings said.

Hastings was also asked if Netflix plans to partner up with FreeBee Data, Verizon’s new “sponsored” mobile data service that the carrier is testing, and follow the path the OTT provider has taken with T-Mobile’s Binge On service.

“We don’t know enough about FreeBee,” Hastings said, but did have some praise for Binge On, when later asked how the policy backing that service differs from some of the usage-based policies being tested by ISPs such as Comcast.

 “It’s voluntary on the customer,” Hastings said of Binge On. “It’s an open, no-charge program…We hope those kinds of programs expand.”

Netflix is seeing a “great reception among our users” to Binge On, he said earlier, noting that the quality of Binge On streams (limited to 480p) is “very, very good” when viewed on a four-to-five-inch smartphone screen. 

On the international front, Hastings said Netflix will be patient with respect to China, a market that’s currently absent from Netflix’s launch list and presents challenges for Netflix and other content providers with respect to censorship and other restrictions.

“There are issues conforming to those local standards,” Hastings said, warning that discussions about Netflix’s possible entry into China could take many years “or it could be faster than that.”

“We should be very patient,” he said of the Chinese market. “We’re in no hurry.”

Netflix also addressed its crackdown on VPN and proxy users that enable viewers to access geo-restricted portions of Netflix’s catalog.

Hastings said it’s “perfectly reasonable” for content owners to want Netflix to enlist new countermeasures.

While Netflix’s original content has global distribution rights, the company is endeavoring to make all of its content accessible in all markets, content chief Ted Sarandos said, calling piracy and geo-filtering “distance cousins” because one side (piracy) hacks in not to pay, while VPN/proxy users hack to pay, but try to gain access to a library they’re not entitled to.