Netflix sees in itself “a once-in-a-generation opportunity ahead to build...
Netflix sees in itself “a once-in-a-generation opportunity ahead to build the world’s most popular TV show and movie service,” CEO Reed Hastings said in a letter to shareholders Tuesday accompanying the company’s release of its Q2 financial results. Asked on…
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a webcast how the company can reach that goal by charging only $8 for monthly streaming subscriptions and still afford to pay content owners what they demand, Hastings said: “We've been charging $8 a month for streaming for several years and continue to grow the subscriber base and continue to grow the content. We're continuing to execute on that game plan. And that’s helped us to grow very considerably. So I don’t see what the issue is per se with an $8 service, if you get a lot of members, and that’s what we're focused on -- to be able to build up the content.” On the webcast, emailed questions were read aloud and Hastings answered them live. In Q3, viewership of the London Olympics likely will hurt new Netflix subscriber “sign-ups,” Hastings said in the letter. Netflix estimates it will have 1-1.8 million net subscriber additions in the U.S. in Q3, the letter said. “If we finish Q3 in the high end of that range, we would remain on track for 7 million domestic net additions for the year. Otherwise, it would be challenging to achieve that goal by year end. In either case, we are generating impressive growth this year in our most developed market.” In the letter, Hastings singled out HBO as having done “great work” with the HBO GO on-demand streaming service. “While we compete for content and viewing time with HBO, it is also possible we will find opportunities to work together -- just as we do with other networks,” he said. “Consumers who are passionate about movies and TV shows are quite willing to subscribe to multiple services.” Asked on the webcast to elaborate on how Netflix and HBO might collaborate, Hastings said: “I'm not sure what we would do. My point is that we're just another network, and when you have multiple networks, they often find ways of working together. So it’s a general point, that it’s not a zero-sum game between HBO and Netflix, and that in fact, there may be ways of working together. There’s nothing particularly pressing.” HBO is “not in discussions and has no plans to work with Netflix,” a spokesman said.