Netflix Announces No Plan to Combat Cable Television

Netflix may have as many subscribers as some cable television providers, but the popular video rental and streaming service has no plans to formally compete with its cable TV counterparts. With 22.8 million paying customers – comparable to that of Comcast’s subscriber base – Netflix has been perceived by many as a threat to traditional …   Read More

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Netflix may have as many subscribers as some cable television providers, but the popular video rental and streaming service has no plans to formally compete with its cable TV counterparts.

With 22.8 million paying customers – comparable to that of Comcast’s subscriber base – Netflix has been perceived by many as a threat to traditional cable TV media consumption, particularly given the company’s recently expressed appetite for original programming.

But not so fast, says Netflix CEO Reed Hastings.

Speaking this week at the Wired business conference in New York, Hastings said there’s no plans to compete with cable.

“The fear is that if Netflix gets bigger that it tries to become an internet MSO,” Hastings revealed according to Advertising Age. “But if you play in too big a market, the incumbents will fight you and you’re unlikely to emerge alive from that battle.”

Netflix – which “purposefully plays in a niche market and lies somewhere between raw online video and a full-fledged pay TV service such as Comcast” – doubled its net income in the first quarter of this year on revenues of $719 million.

For the time being, the likes of Hulu is poised to remain a bigger competitor to Netflix.

Hulu Plus, which similarly delivers a comprehensive library of rerun content, also charges a $7.99-per-month fee.

“Hulu Plus launched about nine months ago but we’ve been able to grow in that time,” Hastings told Ad Age. “I think we’re doing alright.”

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