Reed Hastings: Comcast 'wants the whole Internet'
One day after his counterpart at Comcast (NASDAQ: CMCSA), CEO Brian Roberts, sat in the same red chairs and accused him of trying to essentially get free digital postage on the transmission of digital movies, Netflix (NASDAQ: NFLX) CEO Reed Hastings accused Roberts and pay TV's top service provider of trying to tax the Internet.
"They want the whole Internet to pay them for when their subscribers use the Internet," said Hastings Thursday, addressing a wide range of issues at the Code Conference in Palos Verdes, Calif., the first business confab produced by tech blog mavens Kara Swisher and Walt Mossberg since moving on from the Wall Street Journal-backed All Things Digital brand. (Transcripts come courtesy of Re/code, which had its reporters cover the event. Deadline Hollywood and Pando Daily were also there.)
Certainly, it was an active week as far as high-profile media executives speaking at big business events, with the likes of Time Warner Inc. Chairman and CEO Jeff Bewkes speaking simultaneously Thursday at the Sanford C Bernstein Strategic Decisions Conference in New York.
But it was the pointed back-and-forth between Roberts and Hastings that stood out, framing an impasse on net neutrality that the latter executive believes won't be overcome without government intervention.
"Right now, we don't have anywhere close to an agreement," Hastings said.
The rhetoric, of course, is important. As it looks to remake laws governing the fair use of Internet infrastructure, the Federal Communications Commission finds itself constrained by the fact that its first attempts to create such laws back in 2010 were already struck down by a federal court.
But the net neutrality Comcast ultimately agrees to might not fall under any new mandates put forth by the FCC, but rather concessions made with federal regulators in order to get Comcast's proposed $45.2 billion takeover of Time Warner Cable (NYSE: TWC) approved.
Lawmakers were likely watching what came out of Code this week, and Roberts and Hastings seemed to understand that.
Beyond net neutrality, Hastings discussed several other Netflix-salient issues. For one, he said the company does not use the copious data it gathers on subscriber taste to influence the creative decision-making for its original series.
For another, Hastings addressed the "chill out" message he gave investors last fall when Netflix's stock price was surging over $400 a share.
"It's just honesty," Hastings said. "There just felt like there was this hype fest" with the stock.
Finally, the top Netflix executive looked back at his ill-fated decision in 2011 to spin off the compay's DVD rental division into a new unit called Qwikster.
"In hindsight, we were so focused on not dying with DVD," Hastings noted. "We looked at all these businesses like Kodak and Blockbuster. It was really a hard problem ... "It turned out it didn't work out at all. We mispredicted a number of factors."