Netflix plans to be carbon neutral but it eludes a key factor into consideration: its users.
Netflix shared its ambition to become a carbon neutral company by the end of 2022 and published its Environmental Societal Governance report for 2020.
The objective is to both reduce the greenhouse gas emissions and compensate what is emitted by restoring “grasslands, mangroves, and healthy soils”.
We can learn from the report that Netflix estimated its 2020 carbon footprint of 1.1 million metric tons of carbon dioxide equivalents (MTCO2e).
A drop of 16% compared to 2019, that the company mostly justifies by the delayed content productions during the COVID-19 pandemic.
The company reports to have offset 5% of the 2020 carbon emissions (vs 3% in 2019). The program would therefore need to compensate another 95% of the company's carbon emissions by the end of 2022.
But what do 1.1 MTCO2e actually mean?
The size of a Californian forest would be necessary to offset Netflix content production
The energy produced by Netflix is equivalent to the production of a coal-fired power plant during 3 months, according to the Greenhouse Gases Equivalencies Calculator from the U.S. Environmental Protection Agency.
It could be carbon neutral by using 227 wind turbines functioning all-year round.
It would need 1.37 million acres (5,500 square kilometers) of U.S. forests to sequester Netflix's annual carbon emissions. This is about half the size of Jamaica and twice the area of Luxemburg.
This therefore seems like a sizeable investment and significant ambition from Netflix, but achievable.
Looking at the estimates in more details, we can also learn that 50% of the carbon emissions are due to its content production. The size of the Angeles National Forest in California is already necessary to compensate it.
However, only 5% of the greenhouse gas emitted by the company comes from streaming, which includes its cloud provider Amazon Web Services or Open Connect, a content delivery network.
In fact, the company excludes the carbon emissions on the user's end for actually watching the videos.
Netflix refers to the GCG protocol from Carbon Trust and excludes some of its indirect downstream activities.
Netflix doesn't include the carbon emission from its users
The use of sold product surely is a downstream activity to include in the calculation according to the protocol.
However, what is optional is the "indirect use-phase emissions of sold products over their expected lifetime", such as the electricity consumed to watch Netflix on the user's device.
The company actually considers it is "current best practice for the internet service providers and device manufacturers to account for those emissions".
In short, the user, the TV or the Internet service provider are responsible for the energy used to watch Netflix. But not Netflix.
Beyond arguments over the ownership of responsibility, Netflix's ESG report mentions that 1 hour of video streaming is "well under 100 gCO2e, equivalent to driving a gas-powered passenger vehicle 1/4 mile (400 meters)".
Based on their own numbers, we can therefore draw a safe estimate of its users' carbon emissions.
10 million people watch Netflix continuously
Netflix said that members around the world watched videos during more than 140 million hours per day, which approximately accounted for 71 minutes a day in 2017.
The average time spent may seem high but one of the the reasons is that a paid membership is the same as a member or a subscriber. And for most accounts several people from the same household are able to stream Netflix videos on different screens concurrently, adding up to the time spent by day on the platform.
The company recorded almost 204 million paid memberships in the 4th quarter of 2020, and despite a slower growth, Netflix doesn't expect a decline of the total subscription volume.
With the low 2017 estimate of 71 minutes per day, these 204 million subscribers would watch a total of 5,278 billion hours of videos on the platform during a year.
This is equivalent to 10 million individuals streaming Netflix 24/7 during a whole year.
Netflix users probably emit 8 times more greenhouse gas than Netflix itself
According to Netflix estimate, where 1 hour of streaming is "well under" 100 gCO2e, then these 5,278 billion hours a year therefore account for "well under" 8.8 million metric tons of carbon dioxide equivalents.
This is 8 times the 1.1 MTCO2e reported by Netflix's operations.
These CO2 emissions are "well under" what 1,830 wind turbines save on greenhouse gas emissions by year, or what 16,800 sq miles (43,600 sq km) of U.S forests store of carbon - 20 times the size of Tokyo and 25 times the area of London.
But these safe estimates still seem way below the reality.
In 2019, former vice president of content Cindy Holland said subscribers watched Netflix for an average of 2 hours a day. It was not 71 minutes anymore. In that case, users' carbon emission could almost be twice higher than the calculation.
Moreover, time spent has probably increased during 2020, a year driven by stay-at-home orders. A Nielsen study also found there was a 61% increase in video streaming on TV in during the lockdown in the U.S., which amounted to more than 3 hours a day whereas users watched Netflix a little more than 1 hour a day in 2017.
So it seems fair to conclude that 8.8 MTCO2e a year for its users is only a low-end estimate. As such, Netflix and its users combined emit more than 10 million metric tons of CO2e a year.
If Netflix were a country and the users its citizens, it would emit more CO2 than Cameroon. At least.
Media sources and useful links:
- Environmental Social Governance 2020, Netflix, March 2021, Free access
- Greenhouse Gas Equivalencies Calculator, United States Environmental Protection Agency, Free access
- Technical Guidance for Calculating Scope 3 Emissions, Greenhouse gas protocal, 2013, Free access
- 2017 on Netflix - A Year in Bingeing, Netflix, December 2017, Free access
- Netflix Fourth Quarter 2020 Earnings, Netflix, January 2021, Free access
- Netflix Fourth Quarter 2017 Earnings, Netflix, January 2018, Free access
- Land Areas Report, USDA Forest Service, September 2019, Free access
- Fossil CO2 emissions of all world countries, 2020 report, European Commission, Free access