Netflix CEO Has No Fears of Competition

In less than ten years Netflix has become not just a great company but also a great company model. Despite all attempts from Blockbuster and others to compete with the online rental service, Netflix continues to be the champion in its industry. But will the industry eventually be obsolete with all the other internet distribution options? Netflix CEO Reed Hastings says that DVD rentals will indeed become extinct in the next 20 years, but he says that fortunately for him Netflix is not simply a DVD rental service. "If one thinks of Netflix as a DVD rental business," he told the Wall Street Journal, "one is right to be scared. If one thinks of Netflix as an online movie service with multiple different delivery models, then one's a lot less scared. We're only now starting to deliver the proof points behind that second vision."

One of Netflix's plans for the future is a streaming video-on-demand option, which they began rolling out as a bonus to subscribers in January (I still haven't received my upgrade, which is expected to hit all members by June). Hastings claims that by the end of this year 5,000 films will be available in that format. He defended the relatively small amount (compared to 75,000 titles available via snail mail) by pointing out that Netflix originally started out offering only 1,000 titles on DVD. Netflix has also been planning for the future of high-density discs by stocking every title available on Blu-Ray and HD-DVD, though Hastings told the WSJ that the formats are not renting too well, and the competing brands are neck-in-neck neck and neck for this small market. He also said that he expects little increase on interest in the discs until one brand is declared the standard.

As for things on the horizon that haven't been officially announced, Netflix is working on developing an internet-to-television device. Hastings isn't worried about coming up with something to compete with the new AppleTV, and he seems to not be concerned with creating a similarly exclusive product. "We're big believers in the power of the open Internet to get to the television," he told the WSJ. "Our view is it's certain that, from the television, consumers will be able to browse online video from millions of Web sites because the demand is there."

Hastings doesn't seem to be scared of anything, especially not to threats to his business. He recommends five movies with important leadership lessons: The Endurance ("constant adaptation"), Little Miss Sunshine ("the journey and the determination"), The Usual Suspects ("downplayed persona"), Animal House ("a resourceful plan passionately executed") and Branagh's Henry V ("words can inspire legions"). He also states that it is detrimental* important to be able to discern between real threats and small companies doing their own thing (like Movielink). "It's conventional to say, 'only the paranoid survive' but that's not true. The paranoid die because the paranoid take all threats as serious and get very distracted."


* not sure what word I was thinking of here. Thanks to Becky from the Netflix Fan Blog for pointing out my confusing word choice.

[via Hollywood Wiretap]