Netflix says the partnerships it entered into with iiNet and Optus in Australia were a mistake, and that the deals reinforced “discrimination” in the market.
Releasing its results today, it told shareholders that to protect its Australian users, it entered into a partnership with Optus and iiNet whereby its users would not have downloads counted against their data limits.
Long a champion of net neutrality in the US and elsewhere, it said it felt uneasy about its arrangements with the internet service providers (ISPs).
“Data caps inhibit internet innovation and are bad for consumers,” it said.
“In Australia, we recently sought to protect our new members from data caps by participating in ISP programs that, while common in Australia, effectively condone discrimination among video services (some capped, some not).
“We should have avoided that and will avoid it going forward.”
It did note that most fixed-line ISPs were moving towards eliminating data caps “in line with our belief that ISPs should provide great video for all services in a market and let consumers do the choosing”.
Fellow subscription-video-on-demand providers such as Presto have signed up to eliminate the data caused by downloads of their content from data caps of their customers.
It was recently estimated that Netflix is accounting for 15% for all traffic on iiNet's network, and the percentage is higher in the US.
ISPs on their end have heavily leant on the fact that access is unmetered on their services, with Optus and iiNet rolling out advertising to that effect.
The comments came as Netflix announced a subdued profit of $US23.7 million ($30.56 million), as its aggressive international expansion hit costs, but grew overall subscribers.
It added a better-than-expected 4.88 million streaming subscribers in the March quarter, 2.6 million of those coming from outside the US.
You can find its letter to shareholders here.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.