Netflix, Inc. (NFLX) – Verizon Communications Inc. (VZ) Streaming Tussle Gets Uglier


Netflix, Inc. (NASDAQ:NFLX) and Verizon Communications Inc. (NYSE:VZ) have been involved in a small battle on streaming issues. The internet TV provider is blaming Verizon Communications Inc. (NYSE:VZ) for the issues in streaming for a few of its customers. Netflix, Inc. (NASDAQ:NFLX) is displaying a message on the customer’s screen blaming the ISP for lower streaming quality and delays in loading videos.

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Mitch Lowe, Netflix, Inc. (NASDAQ:NFLX)’s co-founder was on CNBC’s Squawk Alley and discussed the issue in detail. He explained how issues like these occur at the first place and here is what he said:

“You have competitors and suppliers being the same people or vendors being the same people. So you’ve got to watch Netflix if you’re a Verizon customer or a customer that gets it through Verizon. Yeah, Verizon is a competitor. “

So as per Lowe, Verizon Communications Inc. (NYSE:VZ)  also provides movies through cable and FiOS and hence it becomes a competitor and supplier for Netflix, Inc. (NASDAQ:NFLX) which is very fascinating. What he actually meant was that there might be a speedy decline due to all this competition.

The ISP has asked two pieces of information about the tussle which were:

  • Facts should be laid out that Verizon Communications Inc. (NYSE:VZ)’s network was actually clogged
  • The customers, to whom Netflix, Inc. (NASDAQ:NFLX) was showing that message, were actually Verizon customers and not just any customer across the board.

The first part of the request was displayed by the internet TV provider on its blog which shows low speeds on Verizon Communications Inc. (NYSE:VZ) for both FiOS and DSL where DSL being the slowest.

So now it’s at a point where Netflix, Inc. (NASDAQ:NFLX) has to actually show that the message was only shown to the customers that were actually affected. Lowe was asked if he can say confidently that the message was only shown to the impacted Verizon and not everyone. Here is Lowe’s answer to that:

“That’s a hard one to say. I am sure customers were notified, Netflix customers were notified that this was going to be kind of a slower connection speed, but Verizon’s request for those names is all about a legal game to make it more painful to do.”

Lowe felt that the service of Verizon Communications Inc. (NYSE:VZ) made his company look as a stronger competitor.

Currently, Netflix, Inc. (NASDAQ:NFLX) is the only company that is strong enough both brand wise and reputation wise to take on the internet service providers. The company can do it because it’s the one thing any ISP has got to have if they offer broadband.

Disclosure: None

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