Netflix, Inc. (NASDAQ:NFLX) is dabbling in the political. According to analyst Richard Greenfield in a recent interview with CNBC, it’s no accident Washington, D.C. customers were shown the error message the company sent out about Verizon Communications Inc. (NYSE:VZ).
Netflix, Inc. (NASDAQ:NFLX) recently showed customers a message that said, “The Verizon network is crowded right now. Adjusting video for smoother playback…” According to some observers, the error message is clearly passive-aggressive.
In the interview with CNBC, Greenfield, a media and tech analyst at BTIG, said that this was done by Netflix, Inc. (NASDAQ:NFLX) as a political move. He explained:
“I think Netflix is trying to convince consumers to complain enough. It cannot be an accident that where this was noticed was in Washington, D.C., on Verizon. They just cut a deal with Verizon. They’re doing this in D.C. where the FCC and Congress is. Clearly, Netflix is trying to sway consumer opinion to influence regulators, to influence congressmen and congresswomen to actually change the laws or to basically affect policy because what Netflix wants is free transit, free peering.”
According to Greenfield, the content distributor does not want to pay to connect to Comcast Corporation (NASDAQ:CMCSA) or Verizon Communications Inc. (NYSE:VZ).
However, after saying that this move is political, Greenfield said that he thinks this will not play out as Netflix, Inc. (NASDAQ:NFLX) wants it to play out.
Verizon Communications Inc. (NYSE:VZ), for its part, has reacted to the message shown to customers by the company. It said in a post on its blog that what Netflix is doing is shifting blame. It wrote:
“This claim [that the network is crowded] is not only inaccurate, it is deliberately misleading. The source of the problem is almost certainly NOT congestion in Verizon’s network. Instead, the problem is most likely congestion on the connection that Netflix has chosen to use to reach Verizon’s network. Of course, Netflix is solely responsible for choosing how their traffic is routed into any ISP’s network.”
Major shareholders in Netflix, Inc. (NASDAQ:NFLX) includes Carl Icahn’s Icahn Capital Lp with 2.24 million shares as of the end of the first quarter. Philippe Laffont’s Coatue Management also owns 1.54 million shares in the content distribution company.
Meanwhile, Warren Buffet’s Berkshire Hathaway owns 11.02 million shares in Verizon Communications Inc. (NYSE:VZ) for a valuation of about $641.04 by the end of March. Jim Simons’ Renaissance Technologies has about 10.36 million shares in the telecommunications company.
Disclosure: None
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