FLIXPAC: Netflix Goes To Washington

Posted by · April 10, 2012 10:33 am

FLIXPACFor those of you that use Netflix, let me start by asking a simple question. When you pay that monthly fee, what do you expect that money to pay for? While our answers might vary on a granular level, the general consensus, I’m sure, is that fees should pay for service, right? Whether that means more of our favorite shows and movies, additional features, or a more user-friendly experience, most of us pay for services like Netflix because—whether we consciously think about it or not—we expect most of those fees to be used for the benefit of the ones paying for the service.

This is especially true when companies raise their prices and justify the decision by citing the increased costs of licensing agreements with movie studios.

Unfortunately, this is not always the case.

Whether it’s our monthly Netflix fee, the amount we pay to fill up our gas tanks, or the bill that’s due after a trip to the store, many companies are finding it advantageous—at least for their shareholders—to redirect some of those funds elsewhere. Instead of using that increased revenue to pay for and improve goods and service for the customers who pay those inflated costs, it’s not uncommon for a company to set aside large amounts of money buy influence on Capitol Hill.

And despite its sordid reputation after a long line of poor managerial decisions, Netflix remains undaunted by the chance that using funds to win favor among politicians instead of using said funds to increase available streaming content or better yet, to lower their rates and win back some of the 800,000 disillusioned subscribers it lost last year could end up costing the company more than it can afford to lose.

Introducing FLIXPAC

In an email to the press, Netflix spokesperson Joris Evers introduced the company’s new political action committee with the following statement:

PACs are commonplace for companies that lead a big, growing market and Netflix is no exception. Our PAC is a way for our employees to support candidates that understand business and technology. It was not set up for the purpose of supporting SOPA or PIPA. Instead, Netflix has engaged on other issues including network neutrality, bandwidth caps, usage based billing and reforming the Video Privacy Protection Act.

Serving to disprove my initial impression that Netflix had dropped the VPPA issue after immediately encountering resistance from privacy advocates, the company appears determined as ever to “modernize and simplify” the act by making provision to allow Netflix to plaster user activity all over Facebook news feeds. And although the company specifically mentions not starting FLIXPAC to support SOPA or PIPA, it remains a bit disconcerting for the recently exposed Cyber Intelligence Sharing and Protection Act (CISPA) to go unmentioned.

Meanwhile, although the issue of network neutrality is one worthy of debate on the Hill, Netflix nominating itself as a participant in this debate using what scant funds remain on its books hardly sounds like a feature Netflix members had in mind when they signed up for the service.

What’s worse is that despite the novelty of FLIXPAC, Netflix had been steadily increasing its spending in Washington over the past two years, according to Higginbotham’s report. This is particularly significant considering the fact that it was over the same period of time that Netflix members were barraged with a whole string of disappointments.

Finally, a Forbes report suggests that FLIXPAC will also be pushing for lower postage costs for the company’s delivery service. However, if you’re hoping for some of that savings to be passed along to members in the form of, say, a modest rate reduction, I wouldn’t hold my breath.

While someone like Higginbotham is “hopeful we’ll see a more activist Netflix,” I’m not so sure that a lobbyist arm capable of contributing up to $5,000 to each of its favored federal candidates is the best thing for a company struggling not only for the favor of its members but for survival itself.

What do you think of FLIXPAC? Should Netflix be lobbying for and funding an agenda in Washington using fees paid by its members?