Reed Hastings: Disc the Primary Format for Two More Years7 Oct, 2009 By: Erik Gruenwedel
Packaged media, specifically DVD and Blu-ray, will continue to be Netflix’s primary delivery format for the next two years, said CEO and co-founder Reed Hastings.
In an Oct. 7 audio interview with TheMotleyFool.com, Hastings said DVD would thereafter play a supportive role as the Los Gatos, Calif.-based online DVD rental pioneer transitions further into digital distribution and streaming.
“DVD still has the huge advantage, [with a] huge number of titles and all of the new releases,” Hastings said.
He said Netflix subscribers increasingly are opting toward the one-title-at-a-time unlimited ($4.99) and two-title unlimited monthly ($8.99) rental plans with unlimited streaming — the two lowest-priced plans. Hastings said DVD would be a part of Netflix’s offering for another 10 to 20 years.
“So a very long time,” he said.
Hastings said the significant growth of subscribers (about 11 million) had not resulted in obtaining better license deals with the studios. However, he said the added revenue had given the service the ability purchase better titles.
“It’s not that we are getting a better deal, [but] we are spending more to get more titles,” he said.
The CEO said he saw no need to get exclusive releases from the studios or create so-called “house brand” releases. Instead, Hastings said would like to focus on acquiring newer-release titles, which he said consumers want.
“We are really focused on the broad range of content that already is out there,” he said.
He said it was important that tech companies stay on the cutting edge in order to remain relevant.
Hastings said Netflix was focused on developing the streaming option and remaining relevant, which meant the service would not seek to establish an international presence.
He said Cadillac Records was the last great movie he watched via the Watch Instantly streaming service.