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Netflix CEO Reed Hastings   (Source: Reuters)
Hastings says it is a long-term goal in order to compete with HBO Go

Netflix CEO Reed Hastings said it's likely that the video streaming service will end up doing business with cable service providers in the future, despite being competitors now.

At the Morgan Stanley Technology, Media and Telecom Conference in San Francisco, California, Hastings said that many misconstrue "copycat competition" like Amazon Prime as the main competitors to his service, but mentioned that HBO's Go on-demand service is the real competition for his company. For instance, HBO just announced that Go would be on Xbox Live beginning April 1, which will give users an alternative to Netflix.

"It's very easy for companies to over-estimate copycat competition and not see the real threat," said Hastings. "You go back to 1995, and you talk to the Netscape sales force and ask them what their number one competition is, and they'd say Spy Glass, which was taking a little market share from them at the time. But the real competition was Microsoft and bundling."

This is why Hastings sees Netflix eventually joining forces with cable service providers in the future. Instead of focusing on the likes of Amazon Prime, Netflix wants to give cable service providers an alternative to HBO's Go on-demand and hit the real competitor right where it hurts.

"It's not in the short term, but it's the natural direction for us in the long term," said Hastings. "Many [cable service providers] would like to have a competitor to HBO, and they would bid us off of HBO."

Netflix has already began to take HBO on by releasing original programming such as "Lilyhammer," which premiered February 6, and "House of Cards," which will debut later in 2012.

Source: Netflix



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By The Raven on 3/2/2012 11:55:28 AM , Rating: 2
I don't think it necessarily means commercials. I think it will be more exclusivity crap, like pay per view titles not conflicting with Netflix titles or something like that.

It is fine just the way it is. I think Reed is probably just worried that the others will get in bed with the evil cable companies/studios before they do.


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