Netflix's Hastings Calls Amazon 'So Scary'

31 May, 2017 By: Erik Gruenwedel

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Netflix CEO Reed Hastings has run the gamut characterizing Amazon Prime Video — from “confusing mess” in 2012; “complementary” rival more recently, and “so scary” in a May 31 interview.

Speaking on CNBC’s “Squawk Alley,” Hastings was asked about Amazon’s renewed efforts to up Prime Video content spending and offer the service globally, among other issues.

“Everything Amazon does is just so amazing. How are they doing so many business areas so well? Like they’re trying to repeal the basic laws of business,” he said.

Hastings said Prime Video’s uptick in original content spending (reportedly $4.5 billion) is helping to grow the SVOD industry.

“The Grand Tour,” Amazon’s rookie motoring series featuring the original cast of BBC’s “Top Gear,” reportedly cost upwards of $200 million for three seasons. Amazon will soon launch “Jack Ryan,” a new action series based on Tom Clancy’s CIA hero and starring John Krasinski (“The Office”).

Amazon recently took content spending to a place Netflix heretofore refuses to enter: Live sports.

Amazon is spending $50 million to stream 10 NFL Thursday Night games next season. Hastings reiterated management’s previous comments that Netflix has no interest entering distribution sweepstakes for professional sports. 

Netflix did bow “Ultimate Beastmaster,” Sylvester Stallone’s global gladiator-based competition show.

“We’re continuing to watch [Amazon] and be impressed with them,” Hastings said.

Separately, Hastings dismissed assumptions that SVOD is driving cord-cutting in the pay-TV universe. He said Netflix has about 50 million subscribers domestically, with cord-cutting affecting about from 2million to 3 million of those subscribers.

“Very few people have cut the cord. Don’t think of it as a big overlap, that we’re driving cord-cutting. That’s mostly from [channel bundle] pricing,” Hastings said.

He likened cord-cutting to declining broadcast TV ratings, or 2% to 3% per year. Hastings said instead there would be a “long slow secular decline” in broadcast TV, with the industry adjusting the economics of the business model.

“No big calamity,” he said.

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