Netflix CEO Reed Hastings Interview
Question 1: The big challenge is getting the movies and content to TV sets, right?
Answer 1: Cell phones have a lot of online content & game systems have a lot of online content, so we’re already seeing the beginnings of connectivity. New televisions in the next two years will have WiFi just built into them. . . .
Question 2: Blockbuster has strong resources, combining stores with online rentals and brand identity. Do those advantages make it an inevitable winner against Netflix?
Answer 2: I’d like to say they don’t have a chance on the planet, but the reality is they do, and that’s what makes it an interesting battle. They have stores they have a brand that’s known by every American. We’re known pretty broadly and we’re known very well in the online segment, but they have broader branding.
Question 3: One view is that Netflix and Blockbuster are in a mutually destructive competition that threatens to erode both companies. How would you describe it?
Answer 3: It’s growing the market. Investors are concerned about eroding profits, but not an eroding market, not eroding revenue. Consumers are signing up for online rental in droves. Two years ago, it was about 2.1 million net additions to the online market. Then it was 2.5 million, mid-year to mid-year. And then the last 12 months, it went to 3.7 million in increased total subscribers. We got about half that, and Blockbuster got about half that. So the total market is steeply accelerating.
Question 4: What kind of timeline do you envision for most movies or mainstream entertainment content being downloaded instead of being on the various DVD formats?
Answer 4: It was 10 years ago when we started. And what we realized is, yes, there’s going to be a world of Web-based television, and you’re going to be able to watch all kinds of video content from all kinds of sources. But we realized that there was going to be a generation before that of digital, of optical, disc, and that we could build a company because not many people would realize this.
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