Reed Hastings, Netflix’s co-founder, chairman and CEO, acknowledged that Amazon is a very large and formidable rival — even as he praised the e-commerce giant as helping to grow the streaming-video sector.
“We’re continuing to watch them and be impressed with them,” Hastings said in an interview on CNBC’s “Squawk Alley” Wednesday. “They’re helping to grow the industry… [but] they’re awfully scary.”
At the same time, Hastings drew a distinction between the overall strategy of the two companies, noting that Netflix is focused entirely on subscription VOD whereas Amazon is trying to sell hundreds of different products. “We’re trying to be Starbucks, they’re trying to be Walmart,” he said.
Amazon’s video content budget for 2017 will be about $4.5 billion, according to J.P. Morgan estimates. Netflix is set to spend $6 billion on content this year — as well as another $1 billion marketing it.
Amazon is paying about $50 million for NFL’s “Thursday Night Football” package of 11 games next season. But Netflix still has no interest in acquiring right to live sports, Hastings said, reiterating the position he and other execs have expressed. Netflix also doesn’t plan to invest in live news programming, he added.
In the CNBC interview, Hastings said Netflix is continuously investing in artificial intelligence in order to improve its content recommendations. “We want you to turn on Netflix with a row of four shows, you just want to watch them all,” he said.
Even with all of Netflix’s ballyhooed expertise in crunching data, Hastings said that the company’s content acquisitions are “fundamentally a creative bet” and gave props to chief content officer Ted Sarandos. Netflix — which famously does not reveal viewing metrics — mostly measures the success of its content based on how many people watch the programming, as well as how it affects subscriber signups and retention, Hastings said.
Netflix was surprised by the popularity of teen-suicide drama “13 Reasons Why,” according to Hastings. He noted that the company has not canceled many shows; while he didn’t mention it, last week Netflix canceled Baz Luhrmann’s pricey original series “The Get Down” after one season.