At this week’s Wired Business Conference in New York, Netflix co-founder and CEO Reed Hastings discussed his company’s growing success and its reliance on the evolution of bandwidth-related technologies. Netflix recently announced its first quarter earnings (up 88 percent with revenues at $719 million). The subscription-based rental service added 3.6 million new customers during the quarter, double the growth from one year ago.
Hastings indicated that streaming was always the goal of Netflix, but the technology was not ready when they launched the subscription service in 1999. Based on number of hours viewed, the Netflix streaming option surpassed its DVDs for the first time in Q4 2010. This is due to a larger selection of streaming content and improved bandwidth to subscribers.
Hastings has been waiting for this moment. “We took out our spreadsheets and we figured we’d get 14 megabits/second to the home by 2012, which turns out is about what we will get,” he explained. When asked about the next ten years he added, “If you drag it out to 2021, we will all have a gigabit to the home.”
Hastings was also careful to point out that he does not see Netflix streaming as a competitor to cable, which is why his service focuses on older movies as opposed to new releases, sports, or news (although Netflix is experimenting with original programming). “It would start an Armageddon battle, and we would not emerge alive from that battle. So we are concentrating on our niche,” he said.
Related Wall Street Journal article: “Netflix CEO Reed Hastings Swears He’s Not Going to Kill HBO: ‘We Compete Like Football and Baseball'” (5/6/11)
Related Engadget article: “DirecTV asks its customers what they like so much about Netflix, could launch competitor” (4/26/11)
Related ReadWriteWeb article: “Netflix Letter to Shareholders Shows It Couldn’t Care Less About DVDs” (4/25/11)
Related TechCrunch article: “Netflix Earnings Up 88 Percent, Adds 3.6 Million Subscribers” (4/25/11)
Related Home Media Magazine article: “Marvel Superheroes Stream on Netflix” (4/29/11)
2 Comments
Hastings doesn’t want to replace cable. But what about those original series?
Hastings doesn’t want to replace cable. But what about those original series?
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