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Netflix’s Hastings Praises Disney Streaming Strategy - Broadcasting & Cable

Netflix’s Hastings Praises Disney Streaming Strategy

CEO doesn’t see Amazon as a threat
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After announcing third-quarter earnings that surpassed Wall Street expectations, Netflix CEO Reed Hastings may have been justified in asserting that the future of video is internet TV.

“The age of linear is starting to fade and it's going to be replaced by internet,” Hastings said during Netflix’s earnings video presentation for analysts. “And those firms like the BBC or CBS, that's doing All Access, that invest heavily, I think will move into the future on internet consumption.”

Hastings also talked about The Walt Disney Co., both as a potential competitor and as a content supplier.

“They have a great strategy. They've got Hulu. They've got the Major League Baseball initiative and they bought some of that. And then of course, they've got Disney Life, which they operate in a number of countries. So it makes a ton of sense for them to be growing on the OTT side and to figure that out as it does for us to do content,” Hastings said.

Disney has done content deals with Netflix, which currently is streaming the film Zootopia to subscribers. Hastings says Zootopia is doing big numbers for Netflix. Netflix might do another deal with Disney, but it’s going to focus on making its own films too.

“It’s great kids viewing, beyond being great movie viewing. And the Disney brands are different from any other studio can deliver that kind of tentpole kids programming that the family loves and as long as it continues to perform at those levels, we'd look to expand it with Disney,” he said. “But I don't think any other studio really can match that output and match those economics and therefore deliver that viewing. So we're going to still look opportunistically. Our films are available for that window. But really continue to put energy behind our original film initiative as well.”

Netflix chief content officer Ted Sarandos noted that companies like Disney can be both a competitor and partner.

“This kind of frenemy model has existed for decades in television where competing studios produce for one another constantly. And it's really the question I think that our suppliers want to make when they're making decisions around their expansion over the top is, can they make better returns selling to Netflix or building their own thing? And that's both a long-term and a short-term question,” Sarandos said.

Hastings was asked about another potential competitor, Amazon, where founder Jeff Bezos is talking about video becoming an important business.

“Well, we think about it as share of screen time. And when people are doing other things with their screens be they mobile or television screens, they're not doing Netflix,” Hastings said. “So Snapchat, YouTube, Facebook video, all of that is it takes a lot of hours, probably much more so than Amazon. But there are so many competitors out there for screen time than we win today. Such a small percentage of total screen time bit moves by specific competitors are unlikely to have a material effect.”

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