Netflix's Reed Hastings Calls HBO Go His Primary Competition
At a packed presentation in New York, the CEO jokes that he's the object of "pity" for recent missteps and predicts that, in a decade, half of all TV viewing in the country will come through Internet streaming.
Winner for the hottest topic in Hollywood: Netflix.
That’s judging from an investors conference in New York that wraps up Wednesday and where some of the industry’s biggest players are there to promote their own TV and film businesses, though they couldn’t stop talking about Netflix.
No wonder, then, when Netflix CEO Reed Hastings finally took the floor, it was standing-room only, with heavy hitters like Harvey Weinstein joining an audience primarily of Wall Street bankers and analysts.
Before Hastings sat down for a Q&A with UBS executive Aryeh Bourkoff, his ears must have been burning, since he and Netflix had already been discussed by Time Warner CEO Jeff Bewkes, CBS CEO Leslie Moonves, Liberty Media CEO Greg Maffei and others.
“Last year you were a key topic here, but you were not here. There was a mix of fear, envy and mystique,” Bourkoff said, noting that it was the first time Hastings appeared at the UBS Global Media and Communications Conference.
“Now it’s just pity,” Hastings joked, a reference to a decimated stock price and a dented reputation brought about by a dramatic price increase and other public-relations misfires.
Hastings told the audience that he considers the “quite impressive” HBO Go his primary competition. If the on-demand service for HBO subscribers was part of Netflix, it would account for 25 percent of its customers’ streaming, he estimated.
“They’re not competing directly with us, but they can,” Hastings said. “We’ll push each other like two runners."
Referencing Netflix’s upcoming original series House of Cards, Hastings said of HBO in general: “They are becoming more like us and we are becoming more like them.”
Hastings also predicted that within 10 years about half of all TV viewing in the U.S. will come via the Internet, and it’s that assumption that caused the company to charge head-strong into streaming even though, in hindsight, the move was “a little too fast” and he ended up irritating consumers.
He acknowledged that he and the executives at Netflix rarely watch DVDs anymore, so he may have misread the typical consumer.
“Our big obsession for the year was, ‘let’s not live and die by DVD,’” he said.
Of the 60 percent price hike that got the company so much negative attention and cost Netflix about 1 million subscribers, Hastings said: “We berate ourselves tremendously for that lack of insight.”
Hastings said Netflix will stream 1 billion hours of content this quarter and, if House of Cards goes well, he could see the company eventually spending as much as 15 percent of its content-acquisition budget on original shows.