Netflix CEO Reed Hastings Predicts 50% Of TV Viewing From Web In Decade: UBS Confab

Netflix CEO Reed Hastings had the best line of the day at the UBS Annual Global Media and Communications Conference. Told that last year his company was the object of ”mystique, envy and fear” at the confab, Hastings said: ”Now it’s just pity.” Well, yes — considering that his company’s stock has fallen 77% since mid-July, when Netflix boosted prices by 60% for consumers who wanted to continue to receive DVDs and stream videos. ”We had done so many difficult things that we became overconfident,” Hastings says. “Our big obsession for the year was, ‘Let’s not live and die by DVD.’ ” But the change ”turned out to be a little too fast. … We berate ourselves tremendously for that lack of insight.” But his appearance at the UBS gathering was designed to demonstrate that Netflix is back on track — and that its shares are worth buying again. For investors who believe that Web video is going to soar, ”we’re the leading play on that thesis. … As long as we don’t shoot ourselves in the foot anymore, it’s a great opportunity.” He adds that “there’s no effective competitor for exactly what we do.”

Hastings predicted that within the next 10 years about half of all TV viewing will come via the Internet. He says that TV manufacturers ”want you to live in their device.” While about a third of TV sets sold today can connect directly to the Internet, “in a few years most of the TVs sold will be smart TVs. … It’s a phenomenal revolution.” The biggest loser will be broadcast TV, he says. “It’ll be declining like land-line telephony. … To some degree we’ll look at broadcast in 20 years as being like (telephone) party lines.” And as broadband providers include more fiber optic lines in their networks, they’ll be able to transmit Internet video at speeds of 1 gigabit per second. “Peak Netflix viewing on a Saturday night could still fit through one fiber optic (line),” he says. “A gigabit is a tiny fraction of what’s possible over fiber optic.” Hastings says that providers shouldn’t have to raise prices, or resort to usage-based pricing, to handle all of that Internet video traffic — although they might try to do so. ”It would be unfortunate because it’s not based on the costs,” which are fixed, he says. Consumers also might balk. ”Time Warner Cable tried it a couple of years ago in Texas and backed down. … I doubt it will happen.” Read More »

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Netflix Stock -9.4% As Wall Street Wonders How Low It Can Go

Reed Hastings’ Apology Fails To Stop Stock Slide
Hastings Says “I Messed Up”; DVD Unit Will Split, Rebrand As Qwikster

The Netflix situation is becoming scary. The stock was down another 9.4% today, to $129.66. That means the company has lost 55.4% of its value since July 11, the day before it announced its decision to split the streaming video service from DVD rentals — upping the subscription price by 60% for those who still want both. Yesterday, CEO Reed Hastings apologized for his PR blunder by trying to gloss over that fact. He adding that the DVD-rental business will have a new name, Qwikster, and begin to rent video games as well. How low can Netflix go? Read More »

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Netflix CEO Reed Hastings’ Apology Fails To Stop Stock Slide

Netflix CEO Reed Hastings had better hope that consumers are more forgiving than Wall Street. The company’s shares fell 7.4% on Monday following Hastings’ mea culpa for botching the roll out of Netflix’s decision in … Read More »

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Netflix Shares -9.6% In After-Market Trading Following Earnings Report; CEO Won’t Comment On DreamWorks Animation Talks

UPDATE, 3:25 PM: This is weird. It isn’t just that CEO Reed Hastings wouldn’t comment on the big story of the day — his talks to secure an exclusive streaming deal for DreamWorks Animation’s films. Netflix requires analysts to email their questions, so there was no opportunity for someone to ask a follow-up. Hastings simply says that “we’re always in talks with all of the different providers.” Ugh. As for the price change, Hastings says that although “we feel bad about having customers upset with us,” the company anticipated the widespread anger and still feels “great about the decision.” Netflix wasn’t looking specifically to raise consumer prices, he says. The company wanted to separate the U.S.-based DVD rental business from its global streaming-only business — the main focus now. “The pricing change was an outcome of that.” He says it will generate more revenue for the company by year’s end.

PREVIOUS, 1:27 PM: Looks like Netflix won’t escape unscathed from the 60% price hike for its combined DVD rental and online streaming service. CEO Reed Hastings says in a letter to shareholders that in Q3 “we will see only the negative impact of the pricing change,” with domestic subscriber net additions lower than in the same period last year. Also, revenues “will only grow slightly on a sequential basis.” Still, Hastings defends the price change saying that Q4 could be “our first billion-dollar revenue quarter, driven by strong U.S. performance.” Netflix says that in Q2 it generated $68M in net income, up 54.5% vs the same period last year, on revenues of $789M, up 51.7%. The profit figure, at $1.26 a share, solidly beat the $1.11 consensus among analysts who follow the company. But the revenue figure was light. Analysts expected nearly $792M. Read More »

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Netflix CEO Reed Hastings Friends Facebook Board Of Directors

If you thought that Facebook might be gearing up to compete with Netflix, then think again. Netflix CEO Reed Hastings just joined Facebook’s board of directors. “Facebook is propelling a fundamental change in how people connect with each other … Read More »

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EXCLUSIVE DEADLINE LIST: Media Moguls With Pay Compensation NOT Out-Of-Whack

EXCLUSIVE: Media Moguls With Out-Of-Whack Pay Compensation

My previous post showed that a lot of media company bigwigs have pay that’s out of whack with the other 4 top executives … Read More »

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