Netflix backtracks on unmetering deals

The US-based streaming giant’s CEO, Reed Hastings, said data caps inhibit innovation and are bad for consumers

Netflix says it should have avoided signing unmetering agreements with Australian ISPs, iiNet and Optus, which enable consumers to stream as much content as they like without it counting against their home data caps.

In an earnings statement released overnight, Netflix CEO, Reed Hastings, said data caps “inhibit innovation and are bad for consumers.”

“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. Fortunately, most fixed-line ISPs are raising or 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 talking,” Hastings said.

Meanwhile, Hastings said Netflix’s international segment was fuelled by strong growth across its 50+ countries as well as the successful March 24 launch in Australia and New Zealand, which added eight million households to its addressable market.

“In ANZ, Netflix benefited from high consumer awareness, a fervent fan base for original series like House of Cards and Orange Is The New Black and operator relationships with Optus and iiNet,” he said.

Hastings expected to add 1.9 million international customers in Q2, up 70 per cent on the same period last year. The company will launch its services in additional markets, starting with Japan, in late 2015.

Netflix added 4.9 million new members globally in Q1 against a forecast of 4.1 million, bringing its total global streaming membership to 62.3 million.

However, the strong US dollar hurt its international earnings, with the company reporting a loss in its overseas operations of $65 million for Q1, 2015.

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