RICHARD BRIAN/REUTERS - Netflix chief executive Reed Hastings says the company is investing big in its Web-streaming service with new studio-content deals and creating its own series to compete with offerings from HBO and major television networks.
Tech giant Netflix is going Hollywood. As the dominant paid provider of streaming online videos, it now sees making its own videos as the key to its future.
This big bet — and an expensive one — turns the ever-evolving company into a chief rival of HBO and major television networks.
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Chief executive Reed Hastings was in Washington last week to promote Netflix’ s $100 million Web-only series “House of Cards,” starring Kevin Spacey. He dropped by The Washington Post to talk about the future of television entertainment and the tensions he’ll have to sort out with his biggest frenemies — networks and the telecom providers that deliver Internet services like his to homes.
The company is regaining steam on Wall Street after a stock freefall last year, following the embarrassing mistake of prematurely canceling its DVD mail-order business. Hastings changed his mind and announced that the company will keep that service for at least a decade, he says now — or as long as the Postal Service survives.
Here’s an edited version of the discussion:
What’s in store for the next couple of years? Will you look more like NBC Universal or YouTube?
We want more members, more content and to serve more countries. The people at YouTube have that space figured out; it’s all ad supported. For us, we will license more movies, television shows and create more original content.
Why do you do original content? For buzz?
For subscriber enjoyment and the buzz. If there is more buzz, more people join.
But it seems awfully high-risk.
That’s how you differentiate. With on-demand, you can have doubles and not a home run. But networks can’t. That’s why they have to do pilots and pay for overhead. We don’t. We have incredible shows for the Hindi community and other audiences. The whole notion of what is a hit is different. We are about figure out what people are passionate about. We aren’t trying to program to the lowest common denominator. Linear TV has had a one-to-many broadcast, whether its NBC or HBO. We have more creative latitude.
What will the market look like in five years?
Linear TV today will be like landline telephone. You’ll still have it. Many people will pay for it but won’t use it very much. The most communication will go to the mobile phone. Electronics will get better. There will be an iPhone 9 or iPhone 10, and it will be impossibly thin and have amazing resolution, and we’ll have incredible bandwidth.
We’ll have 4K TVs that will be cheap and have large screens. You will control your TV with your smartphone. So the smartphone will be the remote control for your car, give you diagnostics. It will open your house, and it will be your remote control for your life, too. You’ll buy channels like Netflix, Hulu and others on that remote control phone. And whatever screen, whether upstairs, downstairs or in a hotel, will recognize you from your mobile phone-centricity.
Who will own the pipes for Internet connections?
For residential, cable will have their own, fiber will have theirs, too. There will be radio stacks and different providers. The question is how much speed will there be and how much competition.
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