Netflix plans streaming as stand-alone

CFO talks up service at Internet and Media conference

NEW YORK -- Netflix is looking at launching an online streaming-only subscription service within the next year, CFO Barry McCarthy confirmed here Wednesday.

The company is "likely to do a streaming-only product in the foreseeable future," he said at the fifth annual Jefferies & Co. Internet & Media Conference. He later told The Hollywood Reporter that it was likely to launch in the next 12 months, as CEO Reed Hastings had signaled in a recent Bloomberg interview.

The CFO said he doesn't have a monthly price point for the service at this stage but called $5 the low end and $20 the high end of a spectrum, saying that both are likely unwise numbers and that the actual cost would fall in between. Attendees took that as a sign that $9.99 could be a price point Netflix could test.

Currently, Netflix offers online streaming of video content for free as part of its DVD-by-mail rental plans.

A separate streaming-only service would mean "incremental profit and revenue," McCarthy said. But he said usage, retention and subscriber acquisition cost would affect that service's margins and how they compare to the traditional Netflix business.

Asked about key competitors in the digital video space, he said "we're worried about anyone," including Hulu, Apple and Amazon.com.

In the streaming space, "we're the only (provider) so far, he said, adding that he imagines Comcast along with various other companies have an eye on this market.

In an interesting figure, McCarthy said Netflix has had an estimated 18 million different subscribers so far, which after turnover has brought its current sub base to more than 10 million.

Netflix recently said it had hit 10 million subscribers, and said last month that its stronger-than-expected quarterly results were propelled by growth in its Web video streaming service.

Meanwhile, Lionsgate vice chairman Michael Burns discussed the recent increase in Carl Icahn's stake in his company to 14% with some humor. "He is always friendly -- until he is not," Burns quipped.

On a serious note, he said he spent some time with Icahn in recent days, and management has an ongoing dialogue with the former corporate raider.

"His goals are simple: He wants to make some money," Burns said. "He wants to see a return on investment."

Burns said Icahn has also expressed interest in getting a board seat or two, but the Lionsgate executive wouldn't say if Icahn will push his own competing candidates or work with management on board additions.

He also said he is comfortable with the firm's film financing right now despite some recent questions from investors. And he said he "wouldn't be shocked" if Lionsgate got a financial or strategic partner for TV Guide Network, which it acquired last month for $255 million.

Also at the conference, Marvel Entertainment vice chairman Peter Cuneo showed clips touting the creative work and talent behind "Iron Man 2" and "Thor," both of which are scheduled to hit theaters in summer 2010. Filming for "Iron Man 2" starts in about six weeks, Cuneo said.

Reuters contributed to this report.
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