Netflix Invests in Obama's Celebrity

May 25, 2018 6:01 p.m. ET

Mr. Gore’s value to his fellow investors had been precisely his ability to stroll up to cable moguls and extort a place on their channel lineups, including a few pennies each a month from their millions of subscribers. His $70 million personal haul from flipping these carriage rights, of course, must be discounted for any costs he suffered in a subsequent legal scuffle with Al Jazeera when cable operators began enforcing the minimum-viewership requirements they failed to enforce when Mr. Gore was in charge.

In the net-neutrality fight what was Netflix’s ostensible concern? It was the internet-age equivalent of carriage rights.

Netflix’s stated worry, that cable operators would slow or degrade its service to protect their own TV offerings, was always overblown. Broadband had already become cable’s most profitable product, and Netflix was the biggest thing drawing customers to it.

Netflix CEO

Reed Hastings’s

real concern, toward which Mr. Obama proved uncannily obliging, lay elsewhere. It was that cable operators might introduce usage-based pricing—i.e., start charging Netflix customers for their disproportionate bandwidth use.

With his unprecedented White House intervention, Mr. Obama turned the supposedly independent Federal Communications Commission off its chosen path of narrowly tailored antidiscrimination rules. Out of the blue, it adopted 1930s-style utility regulation, which Netflix lobbyists and corrupt net-neut activists could use to fight any inconvenient cable pricing policies.

Mr. Hastings’s fears were wasted. Cable broadband customers won’t stand for usage-based pricing, and now it’s dying a natural death in wireless too. Still, Mr. Obama adopted Netflix’s internet policy lock, stock and smoking barrel and Netflix has every reason to be grateful. Even Google’s then-chairman visited the White House privately to say utility regulation was overkill.

So you can’t dismiss payola on prima facie grounds, but neither can you cite prima facie evidence to prove it. Nor will any memo turn up to show that cable operators agreed to carry Mr. Gore’s unwatchable channel in return for him not joining the liberal bandwagon to re-regulate cable rates.

OK, let’s get serious. On the political rent-seeking scale, the Gore deal was a 7 or 8, where the Obamas’ is a 1 at most.

Cable is a highly politicized business, from its monopoly local franchises to its incessant battles with statehouses, Congress, the Justice Department and the FCC. Whereas there is nothing that we can see that Netflix really needs from Mr. Obama now.

Don’t overplay the value of the deal. Mr. and Mrs. Obama will have to come up with shows, and Netflix presumably has some say in whether they will be greenlit. Netflix’s business these days is one of throwing up huge amounts of passable filler. It’s much less concerned than most studios with creating or acquiring blockbusters.

Obama filler, in Netflix’s evolving approach, may even have real value, at least equal to that of other kinds of filler. If he can use his independent celebrity to attract viewers to give his shows a chance, all the better. If his initial plan for “empathy”-based programming falls flat, who will notice since Netflix doesn’t report viewership results? Netflix is an infinite platform; giving Mr. Obama a place on it, unlike when cable operators gave Mr. Gore a guaranteed place on their channel lineups, costs Netflix nothing.

One more thing: In a week when Mr. Trump might be crowing over his humiliation of the NFL and ESPN’s deepening problems, including with its Trump-hostile hosts, he has not tweeted about the Obama-Netflix deal.

Mr. Trump is not the loose

Twitter

cannon he is made out to be. He sticks to his discipline. If you don’t make trouble for him, he doesn’t make trouble for you. Mr. Obama has remained remarkably silent amid today’s shrill anti-Trump political wars. Not the least interesting question is how long this cold peace will last between the two most iconic figures in American politics right now.