All of Hollywood Should Hate Net Neutrality – And Now They’re Starting to See Why
Yet Another Government Unintended Consequence
Network Neutrality is ridiculous, anti-capitalism, monopoly-making Internet policy. It has been since its early 2000s inception. It REALLY has been since 2015 - when the Barack Obama Administration’s Federal Communications Commission (FCC) unilaterally imposed it.
Amongst Net Neutrality’s overflowing basket of deplorables is the fact that bandwidth hog companies like Netflix, Google and Amazon get to use unlimited amounts of bandwidth - absolutely free of charge.
Which is a bit of a problem. 70% of all U.S. bandwidth - is consumed by video streaming. Netflix all by itself - uses 37%. Netflix and YouTube-owning-Google all by themselves - use 50%. And Amazon - in addition to their inordinately busy online shopping mega-mall - offers video-content-streaming Amazon Prime.
And thanks to uber-stupid Net Neutrality - these bandwidth hogs don’t have to pay for their unlimited time at the trough. Even though they’re consuming more than half the bill of fare.
Which leaves you and me paying MUCH more for Internet service. Because the nation’s Internet Service Providers (ISPs) have but two sides to charge. The likes of Netflix, Google and Amazon - and us. So Net Neutrality mandates that we generously pick up their titanic tabs.
Netflix’s market cap is $42.9 billion. Google’s is $250 billion. Amazon’s is $367.3 billion. So they obviously need us subsidizing them - and they obviously need the government’s monstrous thumb on their side of the scale.
Which brings us to video Mecca Hollywood. Where Netflix is using its Net Neutrality-freed coin - to disrupt and damage all things content creation.
At the time of the Net Neutrality power grab - Hollywood was mostly thrilled.
Hollywood Cheers FCC's New Net Neutrality Rules: “The entertainment industry's creative ranks — the (Writers Guild of America), program producers and digital entrepreneurs - have long lobbied for the so-called net neutrality rules….Netflix and Amazon.com also applauded the FCC's 3-2 vote, which was supported by the commission's three Democrats.”
Ah - there’s Netflix and Amazon mentioned again. Behold the uber-bandwidth hogs - applauding their huge government helping hand. Shocker.
Some of Hollywood, however, may have seen what was coming.
“(M)ajor media companies - including 21st Century Fox, NBCUniversal, CBS Corp., Time Warner and Viacom - were silent on the FCC's decision.”
What was coming? How is Net Neutrality undermining Tinsel Town?
The stupid Net Neutrality government fiat saves Netflix gigantic piles of money. Which they are increasingly using to not just stream content - but to create it.
And that’s becoming a huge problem for the City of Angels (and all the rest of us).
The Netflix Backlash: Why Hollywood Fears a Content Monopoly: “The streaming service is spending $6 billion a year on content, choking basic cable and brusquely rattling the relationship business of the town as fears of a Google- or Apple-sized dominance send a chill down the entertainment industry's spine….(S)ome executives, producers and agents who rely on deals with the streaming giant nonetheless increasingly view Netflix as an existential threat.
“Studios and cable channels fret that the company, with its 83 million global subscribers, is sucking up so many eyeballs and bidding up prices for programming so high that they won't be able to compete….
“(FX Networks chief) John Landgraf…warned that Netflix could be bucking for a Silicon Valley-style near-monopoly in entertainment, such as that enjoyed by Google in search or Amazon in shopping. ‘I think it would be bad for storytellers in general if one company was able to seize a 40, 50, 60 percent share in storytelling,’ said Landgraf. The clear implication: If Netflix amasses such clout, the generous deals will start to evaporate and creative freedoms could be curtailed.
“Some assert that the latter already has happened. Sources say, for example, that Beau Willimon, who adapted the British series House of Cards to give Netflix its first breakout original, was taken off the show after its fourth season because he pushed back hard on notes from Netflix execs. Willimon declined comment….
“Few in Hollywood have the courage to speak publicly about Netflix, and those who have projects there say they are subjected to unusually onerous restrictions on what they are permitted to say, if anything. Retired NFL player Trevor Pryce, who sold the animated series Kulipari: An Army of Frogs to Netflix, jokingly references Fight Club - ‘The first rule of Netflix: You do not talk about Netflix’.…”
All Google and Amazon emphases are ours. But it is more than a mite interesting that those parallels are repeatedly drawn. Involving monopoly-esque companies that all supported the Net Neutrality power grab - that is now making eminently more possible Netflix’s monopoly-esque Hollywood moves.
As we last week yet again noted - no one breaks the law of unintended consequences more than government. When the Leviathan massively inserts itself in so massive a fashion - as it did with Net Neutrality - all sorts of attending things occur. Waves roiled by the government boulder thrown into the water. Rarely are any of these things any good. Usually - they’re terrible.
Net Neutrality is transmogrifying tons of our dollars into tons of Netflix dollars - which Netflix is using to strip mine all things video content creation. Not good.
And the only thing worse than these massive government unintended consequences - would be if they aren’t unintended at all.
Which, sadly, isn’t nearly as unlikely as we would like.