Streaming to overtake cable in 3-5 years: Netflix

December 6, 2011
Internet-streamed video will overtake cable to dominate home video viewing within three to five years, Netflix chief executive Reed Hastings, pictured in September 2011, predicted Tuesday, with stiffer competition to come.

Internet-streamed video will overtake cable to dominate home video viewing within three to five years, Netflix chief executive Reed Hastings predicted Tuesday, with stiffer competition to come.

Hastings said that the rapid growth in high-volume home internet links over will boost consumer use of on-demand viewing services over traditional cable viewing.

Streaming "is all people are going to care about" in a few years. "People are in love with broadband, in terms of click and watch."

Hastings also told an audience of that his company, making the shift from a traditional DVD service to an online entertainment provider, expected to pay $1-2 billion a year for new content to stay ahead of challengers.

"We have got to get as big as we can before the rest of the world catches up," Hastings said at the UBS and Communications Conference in New York.

He added that a deep battle is developing for the streaming market but that his company, which has some 24 million monthly subscribers, and HBO's HBO Go service already dominate and will be the suppliers to beat.

"The competitor we fear the most... is HBO Go," he said. "The two of us will compete for a very long time."

He did not address speculation that the dominant US cellphone provider, Verizon, will use a new $3.6 billion purchase of to push into video streaming.

But he said both and HBO are spending $1-2 billion on new content each year, he said, a level matched by no other .

HBO, a well-established premium , has long produced its own series and movies, and is now making it available for streaming via HBO Go.

Netflix, built on the back of its popular DVD-by-mail rental service, has spent more acquiring rights to stream the videos and only recently moved to develop its own programs.

Earlier this year the company won a bidding war with for the rights to make a US version of the hit 1990s British political drama "House of Cards".

The 26 episode production, which will star Kevin Spacey, will cost the company $100 million, according to various media estimates.

Netflix shares have plunged 77 percent since their mid-July peak on worries that the company is not adding subscribers quickly enough to boost its bottom line and fund the content expansion.

Hastings acknowledged the loss of business after a poorly-handled price increase in September alienated customers.

But he said the company expected "substantial" subscriber growth over the next year as the company expands its offerings and pushes into foreign markets, starting with Britain and Ireland early in 2012.

Explore further: Netflix vying for first rights to new TV series (Update)

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not rated yet Dec 06, 2011
I would much rather watch on demand movies from NetFlix that the old style DVD process. As far as I am concerned, just making a much larger percentage of their already huge set of offerings available online will go a huge way to keeping them top-dog.
not rated yet Dec 06, 2011
Unfortunately, the best internet access is still through cable, which is owned by....the cable company.

It'll still be a while before wireless exceeds the bandwidth of cable.

Additionally, much of the existing infrastructure of the internet is owned by the cable companies.

On Demand and premium channels were just a way to get more money out of people for the same things they used to get for free.

Don't be so naive people.

The streaming will be pay per view eventually, and probably eventually more expensive than whater you're doing right now too.
1 / 5 (1) Dec 06, 2011
Some of us live beyond wire/fiber line so sneaker-net/satellite is the only way to go.
2.3 / 5 (3) Dec 07, 2011
In retaliation for netflix having the audacity to attempt video streaming, AT&T and the other corporate entities that own America's network infrastructure are about to impose a costly pay by the bit network access scheme that guarantees the continuation of their exorbitant profits.

Troll prices are going up on America's Corporate controlled, information highway while in the thinking world, internet access costs continue to fall and access speeds continue to rise well beyond anything Americans have experienced.

It is as if in America corporations owned the interstate highway system and demanded that all automotive traffic on those highways start to pay by the inch traveled because the owners want to avoid capital losses in the rail system which they also own.

1 / 5 (2) Dec 07, 2011
When it comes to Internet access, America's reliance on a capitalist market system is falling flat on it's face.

As usual.
not rated yet Dec 07, 2011
if you are not in a city in the uk, your internet is down the old telephone system,. this is one country where streaming media will not work.
unless you like films to stutter and go blocky, this service will be doomed to failure.

get the infrastructure sorted first, then bring it in.

that this from someone who has to either play online or browse the net at different times, not at the same time..
not rated yet Dec 07, 2011
yeah this market idea holds about as much water as a colander since the internet/cable companies are imposing data maximum limits that can only be reached by watching about 1/2 hour of streaming video. Ergo, unless you're the internet provider and are able to provide enough bandwidth.... this business model is a recipe for failure. Gotta have the infrastructure first...
not rated yet Dec 07, 2011
My cable is 15 times faster than the fastest 4g wireless, and it still isn't fast enough.

Actually, it's supposed to be about 5 times faster than it already is, but it never gets what they claim it is, so it's BS.

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