Netflix CEO weighs on future of Internet TV
|Report an Error|
Share via Email
Netflix CEO Reed Hastings isn’t afraid of competition.
As more companies hitch their futures to the Internet video stream business, Netflix has the distinction of being there first, having pioneered app-based TV. Hastings, in Toronto Tuesday to give the keynote speech at the Canadian Digital Media Network 3.0 conference, predicts the future of Internet TV will be filled with apps — and he can’t wait to duke it out.
“We are now in 40 countries around the world, so people are starting to watch Internet video and you can start to see the outlines of what TV will be like in the future,” he said. “The simplest explanation is if you take your iPad and you stretch it out to be two metres and hang it on a wall that’s what it will look like. It will be beautiful, it will have all kinds of applications and it’s constantly getting better.”
Netflix’s job is to be one of your favourite apps, he said, providing updates with improvements every month. The company continues to garner good buzz, impressing with recent buoyant stock news growing 198 per cent over the past year and hitting a high of $245 on Monday.
Sandvine, a Waterloo-based company that measures broadband usage, just released its quarterly report that showed that a third of all prime-time data usage in the U. S. is people viewing Netflix. The buzz is only going to get louder as the company prepares to launch its latest original series, the resurrected Arrested Development, on May 26.
It’s that type of success that has traditional media companies targeting the company with their own similar services. Just recently, the CRTC heard from telcos talking about taking Netflix on with their own offerings. Hastings said that’s something he would welcome.
“For a lot of people, Internet video is a novelty. To television, Internet video is a novelty, so where it really helps as it mainstreams is to have a lot of competitors because everyone talks and then it helps build the market much faster and larger than it otherwise would be,” he said.
“What we can look forward too … is then having the competitive response, so Rogers will launch a Netflix-like service. Vidéotron has launched a Netflix-like service, and it does a great job on the French-language offerings, and through all of these competitive offerings, we all learn and we all get better. There are more bidders for content, so the content owners are happy, and there are more choices for all of you.”
Hastings doesn’t believe traditional cable is going anywhere, just like the land line at home. But those cable channels and network see the Internet TV future, and the key is creating applications that are specific to the content.
“Networks that want a strong position in the future will be great application developers. And the applications will be unique to the content.”
He cited, Major League’s Baseball’s online video offering, as an example. As well as games, it also has information about player statistics and biographies.
As for traditional companies catching up, it is already happening. Just recently ABC announced a pilot project in New York and Philadelphia to launch an app that will stream their channels. It will be a free trial for the first two months, and then the company will reportedly move to an authentication model that subscribers access with their cable info.
One thing he did not mention in his speech was his ongoing issues surrounding broadband data caps, but he’s on record as being critical of ISPs in Canada.
He also praised Canada though as it was the company’s first international market and also where Netflix started as a pure streaming product, (it began in America as a DVD rental company through the mail). The company launched in Canada two and half years ago, and since then has expanded to 38 markets around the world.
“For us, it inspired us that this pure streaming business was very possible. The downside is that we got so excited about pure streaming that we split our U.S. business,” Hastings said. “So we fell a little too in love with pure streaming but then we recanted and recovered in the U.S.”