The Age of Netflix

by Cory Barker

  Much of Netflix’s interface, user experience, and even its corporate culture are all part of the future of video delivery and, increasingly, production. For example, CEO Reed Hastings has stated that Netflix’s strategy for disrupting the way programs are made is based on prioritizing flexibility of content over efficiency.29 The company has already dispensed with the normal series production and distribution process, instead filming and releasing a full season of episodes at once. Yet, it is unclear what the company envisions as the future. It holds the keys to that future and very publicly altered its position on paid prioritization. The populism that is in the contemporary air has caused a radical reversal in the minds of Netflix and other companies.

  Nevertheless, companies have faced aggressive pushback from populist protest movements for their positions on content accessibility, as has most legislation that touches on the subject. The response to Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) are key examples of this reaction.30 Many of the proponents of paid prioritization when it was first introduced in the Netflix/Comcast deal, such as AT&T and Comcast, have changed their stance on net neutrality, and added public statements to their websites in support of open access for all consumers. However, though the FCC ruled in favor of net neutrality in December 2015, the Los Angeles Times reported that Wheeler sent letters to T-Mobile, AT&T, and Comcast requesting meetings to discuss “some of the innovative things they are doing.” These “innovative things” refer to data caps for streaming video. One example of a work-a-round for such caps is T-Mobile’s “Binge On” initiative, which allows consumers to watch unlimited streaming video from providers like Netflix and Hulu.31 The inflection of the language used to support or oppose net neutrality is slippery. Predictably, companies that support paid prioritization claim that neutrality legislation is detrimental to industry innovation. Meanwhile, those who support net neutrality speak of protecting consumers and keeping the Internet free and open.

  Viewing the Internet as a public good creates tension with the more widely held philosophy of information-as-commodity; a philosophy through which most Internet users, operating as consumers, have worked for most of the Internet’s history. The moment in which demonstrators protested the 1999 World Trade Organization’s meeting in Seattle represents the first use of the Internet for widespread political purposes. One of the institutions that helped the protestors develop their online presence used the slogan “Internet for People not for Profit”—a slogan echoed by the Occupy movement a decade later. Authorities in both the United States and Canada were stunned that a sophisticated underworld of political dissidents existed online. They had not understood the history of the Internet outside of the techno-corporate relationship.32 The Seattle moment illustrates that we can understand the controversy over net neutrality within the larger narrative of inequality that has arisen in the past decade.

  Freedom and Responsibility: Netflix’s Corporate Culture

  Histories of the Internet tend to lionize its early engineers and interpret the development of the Internet prophetically, as the ones mentioned above do. While the founding engineers and designers were people with vision, it is difficult to say if any of them imagined a networked infrastructure on the scale that exists today. The future of the Internet is a strange thing to contemplate, and it is difficult to imagine what the online experience will be a decade or more from now. As the deal between Netflix and Comcast demonstrates, the methods, software, and quality of delivery of data shifts from month to month. The two tech bubbles in the 2000s—responsible for Silicon Valley’s explosive growth and out of which Netflix was created—are evidence of the digital development that can happen in a very short amount of time. In addition, other parts of the infrastructure of the Internet change from second to second. Simply contemplating the amount of data that has been uploaded, downloaded, and networked on the Internet in the past 30 years requires comparison to amounts on smaller scales since the actual amount is difficult to conceive. However, there are organizations and initiatives that do try to predict trends for the future of the Internet and then create policy that keeps that future open for broader societal benefits. The European Commission’s Digital Agenda for Europe: A Europe 2020 Initiative imagines a future Internet that acts as a social good but that is created by policy initiatives now and takes into account the concerns of stakeholders including individual users. Theirs is a bottom up strategy for development. They state, “The project is supported by Futurium, an online platform combining the informal character of social networks with the methodological approach of foresights to engage stakeholders in the co-creation of the futures that they want.”33

  Other projects and centers include the Center for the Digital Future at the Annenberg School in the University of Southern California, whose work is overseen “by a board of governors composed of the CEOs of major media and marketing companies.”34 Whether their initiatives match their longitudinal rhetoric is questionable. Harvard’s Digital Futures Consortium is constantly on the lookout for what they call “truly field-changing applications of technology.”35 At a time when the word “innovative” is thrown around by universities, labs, and centers across the world, it is helpful to have a think tank to separate the truly innovative technologies and not copycats. There are other centers run by organizations such as the Pew Research Center, Elon University, and the National Science Foundation. However, there is trend with these centers: they are all at elite institutions with technically trained professionals and academics. As the events of Occupy Wall Street and the Arab Spring showed us, those who are creating the future of the Internet—or at least those that drive that future through the use of technology in the real world—are seeking solutions to social conditions. Many in Lahore and then Cairo were taken aback to hear their revolutions called “Facebook revolutions.” Malcolm Gladwell of The New Yorker made the point, for which some at CNN criticized him, “People protested and brought down governments before Facebook was invented…. How they choose to do it is less interesting in the end, than why they were driven to do it in the first place.”36 The applications of the Internet used by Occupy and the Arab Spring might be the most innovative of all. The technologies employed—primarily social media—were not necessarily disruptive at the time they were put to use, but the ideas and willingness to participate in shared governance were what gave both movements lasting significance within the global imaginings of what the future of the Internet will be, or as Gladwell would most likely argue, what the Internet will do.

  An interesting emphasis has emerged in the literature of all these projects. They all emphasize the importance of longitudinal feedback and user-driven policy. The future of Internet is one of the few areas of policy that governments and think tanks seek broad, popular consensus regarding its development. One may argue that this is because so many people use it for so many parts of their lives. However, this can be said about a city’s water system as well, and cities rarely seek input on those systems. A more thorough explanation of the interest in popular consensus takes into account two trends. First, the Internet is a hot commodity for economic development in every sector. It has a “cool” factor, and businesses and corporations compete by outdoing one another on the digital playing field. The emergence and saturation of the market with social media marketing startups is clear evidence of businesses attempting to compete on platforms with which they are unfamiliar, yet on which they know they must be present. The second reason for the popular consensus is the careful crafting of the developers of the Internet to present and structure it as a public good or utility that, unlike other utilities like water, should remain free and open. Netflix is one of the first test cases of whether the realities of social inequality, multiplied exponentially in the United States since the 1980s, will spill over into the digital realm.

  Netflix’s corporate culture gives us some evidence of the intersection of the social with the digital within the ethos of Silicon Valley business culture. A dichotomous mix of rhetor
ic and events that nod to openness characterizes Netflix’s culture, but such rhetoric does not seem to fit the reality of the kind of Internet the company imagines, or at least the Internet the company imagined before the public outcry over the deal. In the buildup to the FCC case on net neutrality, Hastings called for stricter regulation ensuring an open Internet. The buzzwords Netflix uses to describe its corporate culture are “freedom and responsibility.” In a Slideshares presentation compiled by Hastings, these words appear above a yin and yang.37 Netflix has put a lot of effort, as many Silicon Valley companies have, into defining their corporate culture against the traditional cutthroat cultures of other Fortune 500 companies.

  Two other initiatives that have grown out of the idea of freedom within the corporate culture are the Netflix Prize and Netflix Hack Day. The Netflix Prize was an open competition held in 2009 for the best collaborative filtering mechanism that would beat Netflix’s own algorithm for suggesting titles to users. The winning team was granted one million dollars.38 The company regularly holds Netflix Hack Day (as many Silicon Valley companies do), and it is open to anyone, including employees, who have 24 hours to create hacks that Netflix may put into use on the site. According to Netflix’s own tech blog, “Hack Day is a way for our product development staff to get away from everyday work, to have fun, experiment, collaborate, and be creative.”39 Some of the hacks have generated more lighthearted solutions, such as the technological wrinkle where partners must enter a PIN in order to watch a series together so that neither moves ahead of the other in their binge-viewing of the latest Netflix original. Others seem to have the potential to significantly improve the Netflix user interface, such as “Smart Channels” which morph Netflix browsing into an experience similar to traditional TV surfing.40

  The hacker culture Netflix actively encourages may be one of the only checks to such imbalance in Internet access—access that the United Nations has repeatedly called a human right.41 As mentioned above, ICANN announced that it has been hacked in the past. What do these high profile hackings mean in terms of a future Internet that works for all and not just a few well-connected users? Will the very structure of the Internet have to be rebuilt to sustain such unequal access? Internet vigilantism has created many problems for individuals as well as companies, but the hacker ethic—with origins in the very engineers who built the Internet—may hold a check for companies or governments that would abuse the massive amounts of data available to them through simple collection mechanisms.42 In 2009, the Institute for Homeland Security Solutions at Duke University stated an obvious point and then provided a telling warning for what they believe to be the real threat of social mobilization through the Internet. The report stated, “The Internet is enabling groups previously incapable of political action to find their voices…. [This] may be relevant to understanding the potential role of the Internet for radicalization.”43

  The concern for potential radicalism, a potential built into the very protocols of the Internet by its architects, pulls back another layer and allows us to see beyond the surface debate over the deal. Perhaps the underlying basis of the national conversation about the Netflix/Comcast deal is not about net neutrality. CNET reporter Marguerite Reardon suggests that we are discussing the deal between the two companies with the wrong language: “The dispute between Netflix and Comcast is not a Net Neutrality issue because it does not have to do with how Comcast is treating Netflix’s traffic once it’s on the Comcast broadband network.”44 Instead, “it stems from a business dispute the two companies have over how Netflix is connecting to Comcast’s network.”45 Yet even the FCC has framed the debate within the language of net neutrality. In February 2015, the FCC voted on the Open Internet Order, which classifies broadband as a utility no different from electricity or running water. Netflix, perhaps in a brilliant public relations move, was also responsible for framing the deal within net neutrality language. Reardon, who admits the deal between the two companies as well as the public debate is extremely complex, breaks down the events that led up to the debate being framed in such language:

  As anyone who has streamed video knows, the amount of bandwidth that is needed to stream or download video far outweighs the amount of bandwidth that is needed to request such a video. And the result is a massive imbalance of traffic going onto the broadband network, which likely requires a commercial interconnection arrangement between Netflix and the various broadband network providers.46

  Netflix clearly views video streaming quality as valuable to customers, so providers should not charge extra for it. A few smaller providers have agreed to Netflix’s terms. However, the major providers, Comcast and Verizon, insist Netflix pay for the interconnection. Hastings, in blog post in March 2014, made the (arguably unjustified) connection between the dispute and the issue of net neutrality. He argues, “The essence of net neutrality is that ISPs such as AT&T and Comcast don’t restrict, influence, or otherwise meddle with the choices consumers make. The traditional form of net neutrality which was recently overturned by a Verizon lawsuit is important, but insufficient.”47 In this post, Hastings makes an assertion that intentionally confuses Netflix with its users. Hastings’s argument is unsettling for proponents of an open Internet, because the deal prioritizes Netflix’s content. By publically promoting net neutrality and opposing Comcast’s insistence that companies pay for more interconnection while also greatly benefiting from a prioritization deal with Comcast, Hastings puts Netflix in an uncertain position. On one hand, Netflix becomes a significant public proponent of the open Internet. On the other, it has a significant amount to gain from such a landscape.

  Conclusion: Inventing the Future

  We can be sure the telecom industry will challenge the FCC ruling, so the debate is far from over. While the Open Internet Order was not a direct ruling on the Netflix/Comcast deal, the deal and public outrage over it was indisputably the impetus for the FCC to take another look at how big business wants to shape the Internet of the future. It is significant that major players like Netflix, whose service accounts for 30 percent of all Internet traffic, have weighed in on the side of net neutrality.48 The company helped shape the debate and national conversation on the topic. The question remains whether or not the public wants a company, through the influence of its high-profile voice, to decide the fate of an essential public utility.

  As the Internet and our ways of connecting to it and experiencing it shifts on a weekly basis, we wait to see what the FCC and companies like Netflix, Comcast, and Verizon will decide about this (now) public utility. For the moment, the experts in the centers mentioned above share a striking consensus about specific changes that will occur on/in/for the Internet in the next ten years. For example, information sharing will become seamless across devices as well as through machine intermediaries, augmented reality and wearable devices will proliferate, an “Ubernet” will emerge that will erase the meaning of national borders, and the Internet will become the “Internets” because networks will evolve and section off as the result of deals like the one between Netflix and Comcast. Yet while consensus exists on how the Internet will develop, there is much disagreement on the implications of its future. In a report titled Digital Life at 2025, a joint project between the Pew Research Center and Elon University, those involved saw emerging positive relationships among societies, improved personal health, and peaceful change through publically organized protests like the Arab Spring. Yet within the same group of researchers, concerns were raised over “interpersonal ethics, surveillance, terror and crime, and the inevitable backlash as governments and industry try to adjust.”49 There was consensus amongst the researchers on two impacts of the future of the Internet. The report found that “dangerous divides between haves and have-nots may expand, resulting in resentment and possible violence” and that “pressured by these changes, governments and corporations will try to assert power—and at times succeed—as they invoke security and cultural norms.”50 The last prediction that the report makes is more
of a piece of advice or a warning. The report closes, “Foresight and accurate predictions can make a difference; the best way to predict the future is to invent it.”51

  Economists have rightfully noted the Internet’s role in increasing income inequality. Aside from the actual number of people in the United States who do not even use the Internet—some 60 million—there are other factors contributing to Internet-derived inequality. Low-income areas have the most to gain through increased access to the information on the Internet, yet they have been found to have the slowest connection speeds.52 There are clear questions that governments must ask about their rural and low-income areas with slow connection speeds or none at all. If corporations have little incentive to service these areas, should governments provide the connection? If the government decides not to offer this service, are they leaving its citizens in involuntary ignorance? The Netflix/Comcast deal helps us ask these questions in a different light. Certainly, there is a digital divide—that gap between those who have access and those who do not have access to the Internet that is primarily based on income. However, what about the inequalities that exist between people who have access to the Internet? There are two additional and important ways to examine the digital divide and its impact on net neutrality and broader social inequality. First, the digital divide has grown more complex in that inequalities are deepened amongst those who have access to the Internet yet do not have the resources to interpret the information they find there.53 The second way in which the digital divide has moved beyond access, often referred to as the “production gap” or the “second-level” digital divide, is a gap that exists between the consumers of content online and the producers of that content. The majority user-generated content on the Internet is produced by a very small percentage of the total users of the Internet. Some Web 2.0 technologies—Facebook, Twitter, YouTube—give users the ability to produce content online “without having to understand how the technology actually works.”54 This leads to an even greater divide between those who have the knowledge to interact fully with the technology and those who are “passive consumers of it.”55 The benefits of bridging the gap are clear, and little controversy exists over the fact that bridging would increase economic equality, social mobility, democracy, and economic growth.56 Netflix has given a nod to building such a bridge, says Dennis Keseris, an intellectual property attorney. Keseris points out that Netflix and other “game-changing companies like Facebook, Google and Twitter, all of which are vocal supporters of net neutrality, have all emerged and thrived in part because of their ability to use the Internet freely, and tomorrow’s web-based game-changers will need to be able to do the same in the years to come.”57