Jan 23, 2019 6:11 PM

Netflix Now Aligns Itself With Hollywood, not Silicon Valley

The streaming firm leaves the Internet Association, a tech industry group, and joins the MPAA, underscoring its growth as a content creator.

Person walking with an umbrella along the Hollywood walk of fame.

Netflix is ditching Silicon Valley and going Hollywood. The streaming video giant has left an influential tech trade group and joined the Motion Picture Association of America, signaling a fundamental shift in how the streaming firm views itself and its future priorities.

Since 2013, Netflix has been an active member of the Internet Association, a lobbying group representing more than 50 of the nation’s biggest technology companies. But Netflix left the group earlier this month, as first reported by Politico. On Tuesday, Netflix confirmed it had joined the MPAA.

Silicon Valley and Hollywood are aligned on some issues, but have clashed over copyright and legal protections for internet intermediaries. Section 230 of the Communications Decency Act shields the Facebooks and the Googles of the world from liability for content published by their users. The safe harbor provision of the Digital Millennium Copyright Act, or DMCA, extends some of those protections to cover copyright violations. So long as platforms comply with requests to remove pirated content uploaded by a user within a reasonable time and ban repeat offenders, they can’t be held liable for hosting it.

Hollywood wants to change that. Groups like the MPAA have long sought stricter anti-piracy measures to prod platforms to proactively remove illegal content uploaded by users. The tech industry holds a different view.

In May, the Internet Association accused MPAA CEO Charles Rivkin of engaging in “crony politics” and capitalizing on the tech backlash by asking Congress to begin a national dialog about how best to hold internet platforms accountable, following Facebook CEO Mark Zuckerberg’s contentious visit to Capitol Hill. In a letter to House Energy and Commerce Committee Chairman Greg Walden, Internet Association CEO Michael Beckerman described Rivkin’s calls to regulate internet companies as “shameless rent-seeking” designed “to protect his clients’ business interest.” An MPAA spokesman told Variety at the time that Hollywood wanted "accountability from the large platforms for facilitating criminal and other harmful online behaviors."

Netflix’s shift from one camp to the other illuminates how its ambitions can diverge from those of tech giants like Google and Facebook. Netflix of yore was considered a streaming platform—predominantly hosting third-party content and attracting users to engage with it. More recently, though, it has become a de facto studio, producing much of its own content, with films like Bandersnatch and the oft-memed Bird Box. Before joining the MPAA, Netflix had worked with the group as part of the Alliance for Creativity and Entertainment, a global anti-piracy coalition formed in 2017.

In a letter to investors last week, Netflix CEO Reed Hastings said the company has found such success in producing original content that it plans to shift even further away from outside programming. “Our main goal is to make the best content,” said Hastings on an earnings call. “So, what we’re going to do is make the best show and not be stuck on the business model.” Netflix did not respond to a request for additional comment.

With the studio model comes studio problems, namely copyright, piracy, and distribution issues. And the MPAA is more than equipped to help Netflix deal with that. The Hollywood group’s roster includes six other major studios, including Disney, Paramount, Sony, Twentieth Century Fox, Universal, and Warner Bros.

The group’s lobbying prowess and massive reach more clearly align with Netflix’s current ambitions, which include expansion in difficult-to-access global markets like China, where the association has sway. Last week, Netflix also doubled down on its interest in India when it announced plans to self-censor unlawful content in response to a proposed regulation aimed at dissolving safe harbor protections—only further deepening the divide between the streaming service and tech companies, who by and large opposed the measure.

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