Netflix increases Q3 spending to woo lawmakers
Netflix spent more money currying favor with U.S. lawmakers and regulators in the third quarter while the video subscription service's customers rebelled against a price increase.
The company's lobbying bill for the July-September period totaled $135,000, Netflix's largest expense for political arm-twisting since it set up shop in Washington, according to a statement filed with the House clerk's office. Its previous high came in the second quarter of this year, when the company spent $110,000.
Netflix, which is based in Los Gatos, Calif., didn't start filing lobbying reports until the fourth quarter of last year.
The issues on Netflix's agenda included the U.S. postal system, which delivers its service's DVD rentals, and the Video Privacy Protection Act, a 23-year-old law that has prevented it from letting U.S. subscribers share what they have been watching on Facebook's social network.
Netflix could be hurt by recently announced postal cutbacks, which will delay mail deliveries by an extra day beginning next spring. The company has warned that it could lose subscribers if the postal changes affect the frequency of DVD deliveries.
The company has had better luck trying to revise the video privacy law, which currently forbids the disclosure of video rental records. The House of Representatives recently passed legislation that would allow the sharing of video viewership with a customer's consent. The authorization could be granted on the Internet under the proposed change.
Netflix has had more pressing matters on its hands as it tries to recover from mass subscriber cancellations triggered by price increases of as much as 60 percent announced in July. The company ended September with 800,000 fewer U.S. subscribers than it had at the end of June, a downturn that is expected to cause the company to lose money next year. Investors have punished Netflix by selling off its stock, driving down the company's market value by about 75 percent, or $12 billion, since mid-July.
Earlier this month, the company hired a new executive to orchestrate its lobbying efforts. Christopher Libertelli, formerly a lobbyist for Internet calling service Skype, replaced Michael Drobac as head of government relations. Drobac, who opened Netflix's lobbying office, left to run a start-up specializing in health care.