Criticism of Netflix

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Netflix is an American global provider of streaming films and television series. Since its launch in 1998, it has been at the centre of numerous legal issues and controversies.

Recommendation algorithm and the "Netflix Prize"[edit]

In 2006, Netflix held the first Netflix Prize competition to find a better program to predict user preferences and beat its existing Netflix movie recommendation system, known as Cinematch, by at least 10%. CEO Hastings did not necessarily expect a lot of quick progress towards the prize,[1] "We thought we built the best darn thing ever."[1] But by June 2007, Hastings said the competition is "three-quarters of the way there in three-quarters of a year."[2] Three teams – an AT&T Research Team called BellKor, commendo's team BigChaos, and Pragmatic Theory – combined to win the 2009 grand prize competition for $1 million. The winning team, called BellKor's Pragmatic Chaos, used machine learning techniques to find that, for example, the rating system people use for older movies is very different from that used for a movie they just saw. The mood of the day made a difference also; for example, Friday ratings were different from Monday morning ratings.[3]

In 2010, Netflix canceled a running contest to improve the company's recommendation algorithm due to privacy concerns: under the terms of the competition, contestants were given access to customer rental data, which the company had purportedly anonymized. However, it was discovered that even this anonymized dataset could, in fact, identify a user personally. Netflix was sued by KamberLaw L.L.C. in Doe v Netflix[4] and ended the contest after reaching a deal with the FTC.[5]

Throttling of DVDs by mail[edit]

Netflix's DVD allocation policy – referred to by many as "throttling" – gives priority shipping and selection to customers who rent fewer discs per month. Higher volume renters may see some of their selections delayed, routed elsewhere, or sent out of order.[6] Netflix claims that "the large majority of our subscribers are able to receive their movies in about one business day following our shipment of the requested movie from their local distribution center."[7] However, not all shipments come from the subscriber's local distribution center, and shipments from distant centers are often delayed, as well.

In September 2004, a consumer class action lawsuit, Frank Chavez v. Netflix, Inc.,[8] was brought against Netflix in San Francisco Superior Court. The suit alleged false advertising in relation to claims of "unlimited rentals" with "one-day delivery." In January 2005, Netflix changed its terms of use to acknowledge "throttling" (Mike Kaltschnee, owner of the Hacking Netflix blog, says Netflix calls this practice "smoothing" internally).[9]

In October 2005, Netflix proposed a settlement for those who had enrolled as a paid Netflix member prior to January 15, 2005. These earlier members would be able to renew their subscriptions with a one-month free membership, and those early members with current subscriptions would receive a one-month free upgrade to the next-highest membership level. Netflix's settlement denied allegations of any wrongdoing, and the case did not reach a legal judgment. Netflix estimated the settlement cost approximately US$4 million, which included up to US$2.53 million to cover plaintiff lawyer fees. A controversial aspect of the settlement offer was that the customer's account would continue at the renewed or upgraded membership level after the free month provided by the settlement, with customers being charged accordingly unless they opted out after the month-long free period ended. After Trial Lawyers for Public Justice filed a challenge to the proposed settlement[10] and the Federal Trade Commission filed an amicus brief urging the rejection or modification of the settlement, Netflix offered to alter the settlement terms, requiring customers to actively approve any continuation after the free month. The final settlement hearing took place on March 22, 2006.[11] Implementation of the settlement was delayed pending appeal in the California Appellate Courts.[12] The settlement was affirmed on April 21, 2008, with the court stating, "the trial court did not abuse its discretion in approving the amended class action settlement agreement, approving the notice given to class members, or determining the amount of fees."[13] The court approved email notice and an online claims submission process.[14] The court said:

The summary notice and long-form notice together provided all of the detail required by statute or court rule, in a highly accessible form. The fact that not all of the information was contained in a single e-mail or mailing is immaterial ... Using a summary notice that directed the class member wanting more information to a Web site containing a more detailed notice, and provided hyperlinks to that Web site, was a perfectly acceptable manner of giving notice in this case ... The class members conducted business with defendant over the Internet, and can be assumed to know how to navigate between the summary notice and the Web site. Using the capability of the Internet in that fashion was a sensible and efficient way of providing notice, especially compared to the alternative Vogel apparently preferred—mailing out a lengthy legalistic document that few class members would have been able to plow through.

The settlement was criticized because it paid out $2.5 million to attorneys for fees and costs, while offering only coupons to the class members.[15][16]

The Terms of Use have since been amended with terms that indicate such a suit would not be possible in the future:[17]

These Terms of Use shall be governed by and construed in accordance with the laws of the state of Delaware, without regard to conflicts of laws provisions. You and Netflix agree that the United States District Court for the Northern District of California and/or the California Superior Court for the County of Santa Clara shall have exclusive jurisdiction over any dispute between you and Netflix relating in any way to the Netflix service or Web site or these Terms of Use. You and Netflix expressly and irrevocably consent to personal jurisdiction and venue in these courts. The parties agree that in any such dispute or subsequent legal action, they will only assert claims in an individual (non-class, non-representative) basis, and that they will not seek or agree to serve as a named representative in a class action or seek relief on behalf of those other than themselves.

Releasing this week[edit]

The Netflix website at one time featured a list of titles, "Releasing This Week" (RTW), that enabled customers to easily view new DVDs the company planned for rental release each week.[18] On December 21, 2007, the company removed the link to the page without notice and replaced it with a slider system showing only four previously released movies at a time. The new page, called "Popular New Releases", does not list newly released DVDs for rental.[19] The listing of new releases is still active,[18] although there is no menu option that links to the page.

On January 1, 2008, a Netflix employee unofficially stated on the Netflix Community Blog that customers used the RTW page to add newly released movies to the top of their queues, then complained about delays in receiving them after demand outstripped the supply of DVDs on hand. By removing the page, Netflix sought to quell complaints that these movies were not readily available. Critics, however, have suggested this was just another Netflix attempt at throttling.[20]

Dynamic queue, subscription, and delivery methods[edit]

On April 4, 2006, Netflix filed a patent infringement lawsuit in which it demanded a jury trial in the United States District Court for the Northern District of California, alleging that Blockbuster's online DVD rental subscription program violated two patents held by Netflix. The first cause of action alleged Blockbuster's infringement of U.S. Patent No. 7,024,381 (issued April 4, 2006; only hours before the lawsuit was filed) by copying the "dynamic queue" of DVDs available for each customer, Netflix's method of using the ranked preferences in the queue to send DVDs to subscribers, and Netflix's method permitting the queue to be updated and reordered.[21] The second cause of action alleged infringement of Patent No. 6,584,450 (issued June 24, 2003), which covers in less detail the subscription rental service as well as Netflix's methods of communication and delivery.[22] The dispute ended a year later, on June 25, 2007, with both companies declining to disclose the terms of their legal settlement, except for a statement by Blockbuster that it would not have a major impact on its future financial performance.[23][24] Blockbuster also said that the company planned to close 282 stores that year to shift focus to its online service. The company had already closed 290 stores in 2006.[25]

In fall 2006, Blockbuster signed a deal with The Weinstein Company that gave it the exclusive rental rights to the studio's films beginning on January 1, 2007.[26] This agreement forced Netflix to obtain copies from mass merchants or retailers, instead of directly from the studio.[27] Netflix has speculated that the effect of the Blockbuster-Weinstein agreement could result in higher rental costs and/or fewer copies of the studio's movies, which would limit the number of each movie's DVDs that would be available to subscribers at any one time.[28] As of June 2007, Netflix continues to make available Weinstein movies, including Unknown, School For Scoundrels and Harsh Times, among others. The first-sale doctrine allows Netflix and other video rental businesses to offer movies released by The Weinstein Company.

Removal of social networking feature[edit]

Beginning in 2004, Netflix subscribers could use a feature that allowed them to interact with friends who were also members. This feature was meant to tap into the growing popularity of social networking. With this feature, users could see how their friends rated a movie on that movie's page; view what DVDs their friends were renting; and allow them to leave their friends notes with film recommendations.[29][30]

In March 2010, as part of a redesign of its movie-details pages, the Friends feature began to be phased out. Users could no longer see their friends' ratings on movie pages, and what remained of the friends section was moved to a small link at the bottom of each page. The initial announcement about the redesign on Netflix's official blog made no reference to any changes to the Friends feature.[31] Hundreds of angry users posted negative comments, and the feedback prompted Netflix's Vice President of Product Management, Todd Yellin, to post a follow-up statement. While apologizing for poor communication about the changes, Yellin stated that the Friends feature would continue to be phased out, citing figures that only 2% of members used the feature and the company's limited resources to maintain the service.[29][30][32] Netflix users also began using the movie-reviews section of the website to post comments protesting against the changes.[33]

Employee poaching[edit]

In September 2016, Netflix was sued by 20th Century Fox for tortious interference, alleging that the company "unlawfully target[ed], recruit[ed], and poach[ed] valuable Fox executives by illegally inducing them to break their employment contracts with Fox to work at Netflix." The suit in particular referred to Netflix's hiring of Tara Flynn and Marco Waltenberg, who were still under contract with Fox.[34] In October 2016, Netflix filed a counter-suit against 20CF, alleging that the fixed-term contracts being used by Fox were in violation of the California Business and Professions Code, for "facilitating and enforcing a system that restrains employee mobility, depresses compensation levels, and creates unlawful barriers to entry for Netflix and others competing in the film and television production business". Netflix described the agreement as "a form of involuntary servitude".[35][36][37]

In June 2019, judge Marc Gross issued a tentative ruling holding that Netflix "intentionally interfered with Fox's contracts with Waltenberg and Flynn" to "further its own economic interest at Fox's expense", but that Fox had failed to present any evidence of actual damages against the company. The case will go to trial in January 2020.[38][39]

In October 2018, Viacom sued Netflix for the same reason, over its hiring of Momita Sengupta.[40]

Linux support[edit]

Netflix formerly supported online streaming only on Microsoft Windows, macOS, iOS and Android, relying on Microsoft Silverlight. Partly due to digital rights management issues, despite the open-source implementation of Silverlight known as Moonlight, this has created problems for users of fully open source versions of Linux and similar operating systems.[41] Though Google's partially proprietary Android and Chrome OS platforms are essentially based upon Linux and other free software infrastructure, Netflix did not provide any crossover support for using its proprietary components to stream any of its content upon more free systems, such as Ubuntu and Fedora, although this changed in October 2014.

On August 9, 2011, Netflix released a Google Chrome web store item for Chrome OS, Mac OS, and Windows; however, it did not initially enable Netflix streaming on Linux machines. On Linux systems running the Chrome browser, the extension simply redirects users to view Netflix.com.[42]

In June 2014, Netflix chose to switch from Silverlight to HTML5 playback using Encrypted Media Extensions (EME), since then, the extensions were added to Microsoft's Internet Explorer on Windows 8.1 and Apple's Safari on OS X Yosemite.[43][43] It was implemented in Google Chrome on all platforms shortly afterward.

As of October 10, 2014 multiple versions of Linux including Ubuntu and PCLinuxOS claim support for Netflix in Google Chrome version 37 or newer.[44][45] The website for PCWorld also states that users of other Linux distributions such as version 17 of Linux Mint have been successfully using Netflix via Google Chrome without any special workarounds.[46]

Third-party solutions[edit]

As of May 9, 2011, Google had initially released plans for a plugin for the Chrome browser and Chrome OS which would allow Netflix streaming, including traditional Linux users.[47]

On November 15, 2012, patches to the Wine compatibility layer to make viewing of Netflix on Linux and similar systems were made available.[48]

On November 18, 2012, a PPA and installation files were made publicly available making the installation and use of Netflix much easier for users of Ubuntu 12.04 and possibly other distributions.[49]

On August 8, 2013, software repositories were made publicly available making possible the usage of the Windows Silverlight plugin in Linux-native web browsers using Wine.[50][51] Previous Linux Netflix support required running the entire Firefox web browser through the Wine compatibility layer.[49]

Accessibility[edit]

On March 11, 2011, Don Cullen filed a national class action lawsuit[52] against Netflix alleging that the service failed to closed caption its streaming video library and had misled deaf and hard of hearing customers. In June 2011, the National Association of the Deaf represented by the Disability Rights Education and Defense Fund (DREDF) filed a lawsuit against Netflix under the Americans with Disabilities Act.[53] On November 11, 2011, the court denied Netflix a motion to dismiss the case.[54]

In October 2012, the parties agreed to a settlement, under which Netflix agreed to pay $755,000 in legal fees, caption its entire library by 2014, and have captions available for all new content within 7 days by 2016.[55] In April 2015, the Ninth Circuit Court of Appeals issued an unpublished decision ruling that the ADA did not apply to Netflix in this case, as it is "not connected to any actual, physical place" and thus not a "place of public accommodation" that applies to the Act.[56]

In July 2012, Netflix formed an experimental project to crowdsource the closed-captioning effort using the Amara (formerly Universal Subtitles) platform.[57] However, this proved problematic in the face of claims that crowdsourced subtitles, regardless of whether they are transcriptions or translations, are derivative works which infringe copyright if created or distributed without consent from the film's copyright owner.[58] Amara operates under DMCA safe-harbor provisions which indemnify it from secondary copyright infringement lawsuits over user-uploaded content, and presumably Netflix would not publish any subtitles produced by this effort without authorization. Netflix stated it is not committed to using any subtitles produced by the crowdsourcing project.[57] In October 2012, Netflix was found to be offering the television series Andromeda to customers in Finland with unauthorized subtitles from the fansub scene.[59][60] When confronted, Netflix apologized and promised to remove the unauthorized translations but did not explain how the content came to be offered in the first place, or whether other potentially copyright-infringing subtitles exist in the company's repertoire.[59]

Netflix has still faced criticism over the quality of subtitles on some of its content and original productions; the service's video player contains a function allowing users to report issues with captioning. In one notable instance in 2018, Queer Eye contained sentences of dialogue missed by the subtitles, and censoring of expletives that were not censored in the audio. Netflix corrected these subtitles after receiving criticism via social media.[61][62]

Circumvention of geoblocking[edit]

More than 30 million Netflix subscribers use the service via a proxy server or virtual private network (VPN); doing so can make a user appear to be located in a country other than the one they are actually in, thus allowing them to use the service to access content that Netflix does not offer in their region, due to geographical licensing restrictions. It is unclear whether accessing geo-blocked content via VPN violates local copyright laws, but content providers and other broadcasters have asserted that it is illegal because it infringes local rights to content that may have been sold to a competitor.[63][64][65][66] GlobalWebIndex showed about 20 million of such VPN users came from China alone.[67][68] As of November 2013, Canadian Netflix offered 3,600 titles compared to the U.S. service which had more than 10,000 which results in Canadians using VPNs so they can access the larger U.S. content selection.[69]

In a leaked e-mail revealed by the Sony Pictures Entertainment hack in 2014, Sony Pictures Television's president of international distribution, Keith LeGoy, described VPN usage of Netflix as being "semi-sanctioned" piracy, and he criticized the company for not taking further steps to detect these users and restrict their access to content Netflix had not licensed for their region.[64][68]

In response, on January 14, 2016, Netflix announced its intent to strengthen measures to restrict access to unlicensed material, by viewers using VPNs or proxies.[70]

Content issues[edit]

13 Reasons Why[edit]

The 2017 Netflix original series 13 Reasons Why (about a teenager who kills herself and leaves behind tapes explaining her action) was criticized for romanticizing, sensationalizing, and increasing interest in suicide (especially given a recent increase in suicide deaths among teenagers), and "glorified and glamorized" issues such as depression and post-traumatic stress.[71][72][73][74][75] Netflix did respond to the controversy by adding additional viewer advisories, and providing links to suicide prevention resources.[76][77] On July 16, 2019, Netflix announced that it had edited the first-season finale of the series to remove the scene that depicted the main character's suicide, stating that "as we prepare to launch Season 3 later this summer, we've been mindful about the ongoing debate around the show", and adding that "we've heard from many young people that 13 Reasons Why encouraged them to start conversations about difficult issues like depression and suicide and get help—often for the first time".[78]

New Zealand's film ratings board OFLC created a new "RP18" rating (recommending parental guidance for viewers under 18) in response to 13 Reasons Why, arguing that although it contained graphic and objectionable portrayals of the act, "these issues need to be talked about in a way that is informed and safe – parents, guardians and other adults need to have open conversations with teens about the issues raised by the show."[79]

Use of disaster footage[edit]

In late 2018, Netflix faced criticism for its use of stock footage from the 2013 Lac-Mégantic rail disaster in multiple original productions, including the series Travelers, and the film Bird Box. The footage was subsequently replaced in both works.[80]

Portrayal of smoking[edit]

A July 2019 report by the anti-tobacco group Truth Initiative highlighted the amount of smoking portrayed in House of Cards and Orange Is the New Black as higher than on broadcast television, and noted nearly double the number of references to smoking between season 1 and season 2 of Stranger Things. In response to the report, Netflix stated they will make efforts to cut back on the depiction of smoking in its original series.[81]

Viewership information[edit]

Some media organizations and competitors have criticized Netflix for selectively releasing its ratings and viewer numbers of their original series and films like Bird Box. A week after its release, Netflix claimed that it had the biggest seven-day viewing record of any of its original films at over 45 million viewers, but did not provide data to validate it.[82] It also wasn't possible to accurately compare its week-long success to a major cultural event such as the Super Bowl, the Academy Awards, or a blockbuster movie run.[83] In June 2019, Netflix claimed that 30,869,863 accounts watched the Adam Sandler- and Jennifer Aniston-starring Netflix original film Murder Mystery, despite it being critically panned, making it the biggest "opening weekend" for a Netflix original film. If the film had been in theaters it would have made the equivalent of $556 million based on a $9 ticket price. Critics cast doubt that this number of people would have watched the film given that it would have made the film more popular than the finale of Game of Thrones.[84]

Award eligibility[edit]

Steven Spielberg—governor of the directors branch of the Academy of Motion Picture Arts and Sciences (AMPAS)—has questioned whether Netflix's feature films should be eligible for Academy Award nominations. While Netflix had previously given its theatrical acquisitions a simultaneous release in theaters and streaming, Roma was the first under a new policy to give them at least a three-week theatrical run before their streaming release.[85] The Academy's official rules only require that a film be screened theatrically in the city of Los Angeles for seven days, with at least three public showings per-day, in order to be eligible for an Oscar nomination. The eligibility criteria do allow for simultaneous releases on non-theatrical platforms.[86]

Spielberg argued that films "that are just given token qualifications in a couple of theaters for less than a week" shouldn't qualify. Following the 91st Academy Awards (where Roma became the first film distributed by a streaming service to be nominated for Best Picture, and won Best Foreign Language Film and two other awards), a spokesperson for Spielberg's studio Amblin Partners stated that he "feels strongly about the difference between the streaming and theatrical situation", and would address the issue at the Academy's next board of governors meeting in April 2019.[87][88][89]

Critics argued that Roma had an unfair advantage, singling out the service's wide availability, refusal to report box office numbers, disrespect of the industry's standard release windows with only three weeks of exclusive theatrical play (although it is not uncommon for some nominees to only receive the week-long minimum run), and excessive marketing spend (with reports ranging between $25 and $50 million, although its Oscars marketing was rolled into Netflix's overall marketing budget).[90] Due to its contravention of the standard three-month windows used by all major distributors, national cinema chains have refused to carry Netflix's theatrical releases. Netflix defended its distribution model, arguing that it was devoted to "[providing] access for people who can't always afford, or live in towns without, theaters. Letting everyone, everywhere enjoy releases at the same time. Giving filmmakers more ways to share art. These things are not mutually exclusive."[85]

The U.S. Justice Department warned the Academy that attempts to change its rules to discriminate against Netflix and other streaming platforms could violate antitrust law, as the parent companies of the traditional major studios (especially, in particular, AT&T and Disney) have been making investments into streaming services that directly compete with them.[91] At its meeting, the Academy voted against making any changes to its eligibility criteria, but AMPAS president John Bailey did state that the organization would "further study the profound changes occurring in our industry".[86][92]

Spielberg missed the meeting due to his ongoing work on a remake of West Side Story; in a remark to The New York Times, Spielberg stated that while people should still have access to theatrical releases due to the communal experience that they provide, they should, at the same time, be able to "find their entertainment in any form or fashion that suits them", and that "what really matters to me is a great story and everyone should have access to great stories."[93][94]

Other controversies[edit]

Bicycle Thieves copyright issue[edit]

In 2015, Netflix and Cinedigm were sued by Corinth Films over its streaming of the 1948 Italian film Bicycle Thieves; although the film itself was considered public domain in the United States, distinct subtitling or dubbing of the film can still be considered a separate and copyrightable work. Corinth alleged that the specific version of the film, registered by Richard Feiner & Co. and owned by Corinth, was being licensed by Cinedigm to Netflix without permission. The parties later settled.[95][96]

DRM criticism[edit]

Netflix use of DRM has been criticized by Defective by Design/Free Software Foundation.[97][non-primary source needed]

Price increase lawsuit[edit]

In July 2016, a Netflix subscriber sued the company over the 2014 raising of its subscription fee from US$7.99 to $9.99, alleging he was told by a Netflix customer support representative in 2011 that they could pay the same price in perpetuity as long as they maintained their subscription continuously.[98]

Firing of Jonathan Friedland[edit]

In June 2018, Netflix CCO Jonathan Friedland was fired for saying the word "nigger" during a company meeting about offensive words.[99] A memo released by Reed Hastings, which stated that he should have used a euphemism, mentioned that Friedland said the word again during a follow-up meeting with human resources. Hastings described the second utterance as "confirm[ing] a deep lack of understanding".[100] Days later, an advertising campaign for Netflix launched, which emphasized its black talent.[101]

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