Reed Hastings at D9 Conference: Netflix Will Remain Complement, Not Competitor, to Cable

Netflix has had an incredible run at transforming television, so I’m always interested in what CEO Reed Hastings has to say. This morning, AllThingsD‘s Kara Swisher is interviewing him at the D9 conference in Southern California. I’m not attending, but AllThingsD is doing a livestream of a few sessions, including Hastings. Here’s what he had to say:

Q: Is Netflix so successful that it’s driving up the cost of content beyond what even it can afford? Hastings: We’re in this virtuous cycle. We’re paying more for content, but we continue to grow with 35% gross margins. So it works as long as subscriber growth continues.

Q: Is it just handing over money to Hollywood that has improved its perception of Netflix? Hastings: Yes (in a word).

Q: What about the Starz deal (a key one for lots of movies and TV shows, which Netflix got cheap a couple years ago)? Hastings: We’ve grown a lot since then, so we’ll pay more for the content.

Q: $200 million as rumored? Hastings: Wouldn’t be shocking. (Though Starz wants a lot more than that.)

Q: Where do you go next to get fresher content? Hastings: We look at what we think our subscriber count will be at the end of the year, so what is our budget? Then we go out and do deals. Consumers want us to have all the new stuff. But the new stuff is very expensive. You can’t get it at $8 a month. We’re really much more of a complement for the new-release business.

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Television in the Cloud: ActiveVideo’s Jeff Miller at NewTeeVee Live

You can’t walk through a Best Buy these days without tripping over another new TV add-on box that lets you watch TV shows and movies from Netflix or Amazon Video On Demand, access apps like Pandora, or even (in the case of Google TV) browse much of the Web. ActiveVideo Networks, though, has a different idea: Create and distribute content from the cloud, avoiding the need to write apps and run them on myriad devices.

So I’m watching ActiveVideo CEO Jeff Miller at GigaOm’s NewTeeVee Live, a conference in San Francisco on the future of television in the Internet era. (I’m unexpectedly housebound this morning, so instead of blogging from the show as I had hoped, I’m blogging from the cloud via Livestream‘s stream of the show.) Here’s what Miller had to say:

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Shakeout Coming in Internet TV Boxes

If consumers are likely confused by the raft of devices to bring the Internet and apps to the television, the TV industry isn’t so sure what they will mean for various players, from content providers to cable networks to cable and satellite TV providers. Folks attending the Streaming Media West conference in Los Angeles today got some answers from a panel of TV and device makers.

The gist: There’s a shakeout coming as more and more devices come to market this year and next. While the growth of interest in alternatives or supplements to cable TV may drive sales for the next year or so, the ones that don’t catch on quickly will start dropping like flies. And with Google and Apple putting bucketloads of bucks into their offerings, it seems likely there won’t be room for all the alternatives that already exist, let alone new ones still to come.

On the panel were moderator Andrew Wallenstein, senior editor at; Dan Kelley, senior director of marketing for D-Link, which worked with Boxee on its over-the-top device to be released on Nov. 10; Jim Funk, VP of business development at Roku; John Griffin, director of connected electronics at Dolby; and John Koller, direct of hardware marketing for Sony Computer Entertainment America. Here in more detail is what they had to say. Continue reading

Cutting the Cord, Part 2: Still Small, Still Scary for the TV Biz

It’s the topic du decennie for the television industry: How many people are cutting the cable cord and getting their TV and movie fix from Netflix, Amazon Video On Demand, and other services on new TV add-on boxes such as Apple TV, Roku, and the like, or from other less savory sources? I explored the topic a bit a few days ago, since I’m taking a close look at where television is headed.

This morning, a panel of TV luminaries offered their take at the Streaming Media West conference in Los Angeles. On the panel, entitled Cutting the Cord on TV: Will Online Video Really Lead to Cable’s Demise?, were moderator Jonathan Hurd, director of research firm Altman, Vilandrie & Co.; Bruce Eisen, BP of online content development and strategy for Dish Network; Greg Kampanis, senior VP of content strategy and operations for South Park Digital Studios; and John Paul, executive VP of products for Sling Media.

Hurd said those viewing TV episodes on the Internet daily is still small at 15%, but that’s more than double a year ago. “Cord-cutting, if it’s happening, is relatively small,” he says–about 2% to 4% depending on age group. But the firm asked its survey group if they’ve seriously considered dropping subscription TV services. Most said not, but those aged 18-24 are much more willing–about 25% of them.

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