Netflix: A war with cable would kill us
May 4, 2011
Netflix CEO Reed Hastings fears that getting too large will start “an Armageddon” with cable networks. Hastings talked about Netflix’s “niche” philosophy of staying “not too big, not too small” — in a discussion at the Wired Business Conference in New York City.
“We’ve consistently said getting into current season TV or newer movies would not be profitable for us,” Hastings said. “It would be an Armageddon. It would be World War III, and we likely wouldn’t survive that battle.”
Hastings acknowledged that his company doesn’t expect to compete on sports and breaking news, which are suited to live broadcast. “[Netflix is] not every single thing all of you folks want to watch, but it’s $8 a month,” he said.
Nonetheless Netflix is prioritising quality content; on top of licensing its first original series — “House of Cards,” it has recently snapped up reruns, including “Mad Men” and the first season of “Glee.” “You have to make a deal with the content owner,” Hastings said. “Luckily we’re bigger now, so we can write the check and get the content flowing.”
Hastings says that although Netflix attracted most of its subscriber base — which now tops 22 million in the US — through its DVDs-by-mail rental service, streaming has been the real goal ever since the company’s inception in 1997. “We had set up the whole business essentially for streaming, but the network wasn’t big enough years ago,” he said. “But in 2005 we clicked on YouTube and watched cats on skateboards — and we thought, it’s here! Since then, we’ve had so much fun finally delivering on our name: Net.”