Netflix CEO Reed Hastings doesn't think launch of Apple TV+ and Disney+ will affect its growth
In his letter to investors for Q1, CEO Reed Hastings said that things were looking great for Netflix, with revenue surpassing $4.5 billion in the first quarter that also happened to be the highest quarterly paid net adds in its history
As Apple TV+ and Disney+ prepare to dip their toe in the streaming industry, Netflix is gearing up for the battle as well.
In his letter to investors for Q1, CEO Reed Hastings said that things were looking great for Netflix, with revenue surpassing $4.5 billion in the first quarter that also happened to be the highest quarterly paid net adds in its history. Paid net adds in Q1 are up by 16 percent this year, the letter revealed, amounting to 9.6 million. Hastings also spoke to the ones watching him closely as the other two giants step in to compete. "We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on-demand entertainment is so massive and because of the differing nature of our content offerings," he said.
"We believe we’ll all continue to grow as we each invest more in content and improve our service and as consumers continue to migrate away from linear viewing (similar to how US cable networks collectively grew for years as viewing shifted from broadcast networks during the 1980s and 1990s). We believe there is vast demand for watching great TV and movies and Netflix only satisfies a small portion of that demand. Last quarter, we talked about how our streaming hours in the US (our most mature market) on TV still only represents roughly 10% of total TV usage. We are much smaller and have even more room to grow in other countries and on other devices like mobile," he said.
He also shared his plans for the upcoming year and their strategy going forward. It looks like Netflix will be focusing on its audience more than ever before. "For 20 years, we’ve had the same strategy: when we please our members, they watch more and we grow more," he said in the letter, perhaps implying that they would be spending much more on original content. They've also planned to experiment with a weekly Top 10 list for their popular shows and films, to make it easier for users to select and consume content that others were watching.
"Later in Q2 we’ll be running a test to improve our UK member experience by releasing weekly top 10 lists of the most popular content on our UK service across various programming categories," he announced, "For those who want to watch what others are watching, this may make choosing titles even easier. After a few months we’ll decide whether to end or expand the test." he said.
You can also expect a price hike in the coming days. The company is currently working through a series of price increases in the US, Brazil, Mexico, and parts of Europe. Prices in the US and Canada have already seen an increase since its fourth quarter last year. "We’re looking forward to a strong slate of global content in the second half of the year, including new seasons of some of our biggest series, 'Stranger Things' (July 4), '13 Reasons Why', 'Orange is the New Black', 'The Crown' and 'La Casa de Papel' (aka Money Heist) as well as big films like Michael Bay’s 'Six Underground' and Martin Scorsese’s 'The Irishman', "he said.