Netflix plans mobile phone, TV downloads

Hastings: Company plans to be 'premiere movie brand' in space

By Jennifer Netherby -- Video Business, 3/7/2007

MARCH 7 | Netflix plans to eventually offer digital movie viewing on mobile phones and TVs in addition to the PC, company CEO Reed Hastings said Wednesday at the Morgan Stanley Technology Conference in San Francisco (webcast).

In January, Netflix began streaming movies to the PC through its new Watch Now service, offered for free to its DVD rental subscribers. (Read our review.)

Although connecting the PC to the TV for Internet-delivered movies is important, Hastings said the PC and smaller screens also are an important market for tapping younger generations who grew up with smaller screens.

Hastings predicted that in the next 20 years, the TV will change greatly. He envisioned a channel lineup more like the blogosphere, with millions of different programming choices.

“Our view is in long term; TV is going to be transformed as video is transformed,” he said.

Netflix intends to be the “premiere movie brand” in that space, competing in the rental segment of online video, similar to the DVD rental space it competes in today, he said.

The company believes that having an online subscriber base will give it an edge in the world of Internet-delivered movies.

Hastings said Netflix has been building up a cash reserve in case it needed an upfront cash payment for digital licensing deals with the studios. But so far, he said, the company hasn’t needed it.

Asked about the growing video-on-demand business threatening Netflix’s DVD rental business, Hastings shook off concerns, saying the company is focusing on growing its subscriber base and improving customer satisfaction. In the next few years, he said, Blockbuster Online will be Netflix’s main competition.

He said it would make sense for his competitor to buy Movielink, when asked about reports that Blockbuster is in talks to acquire the Internet movie download service. But Hastings added that Blockbuster has many options for entering the download business and said he expects “every company under the sun” to be a competitor in downloads.

“It’s not about technology in this space; it’s about how do you make money off of it,” he said.