Netflix Partnership Deal With SK Ends 3 Years of Litigation on Network Usage Costs

ballooned on SK Broadband’s network “in a relatively short period,” and SK Broadband attempted to negotiate with Netflix for cost recovery and sought mediation from the Korean Communication Commission, said Strand. Netflix rejected that process, then brought a lawsuit against SK Broadband, claiming it had no obligation to pay or negotiate for use of SK Broadband’s network, it said. The court rejected Netflix’s claim, saying the terms of compensation should be resolved by the parties themselves, it said. The litigation went through 10 court hearings on appeal, and appeared to grow “progressively worse for Netflix,” it said. The partnership “symbolizes the recognition of the need for broadband providers to recover costs and to find sustainable business models,” said Strand. The partnership works for Netflix and SK, “as both entities have financial relationships with the end user and the parties are in position to share the revenue accordingly,” it said. “Notably the end user still bears the cost, but Netflix’s revenue is ostensibly reduced. Such an arrangement works for streaming, “but not necessarily for the large search and social network platforms as they do not have financial relationships with end users,” it said. But it does signal that broadband providers “could do more to partner with video streamers, and this could be helpful for competitors to Netflix,” it said.