Internet TV to replace linear in 20 years, says Netflix

Netflix co-founder and CEO, Reed Hastings

Over the next 20 years internet TV is going to replace linear TV as the way that people consume video, according to Netflix president and CEO Reed Hastings. 

Speaking on the firm’s first quarter earnings call yesterday, Hastings said that after linear TV’s  “amazing 50 year run” the industry is now transitioning with “everyone scrambling to figure out how do they do great apps.”

For the quarter, Netflix revealed that it had surpassed 60 million global subscribers and said that members streamed 10 billion hours of content – “evidence that consumers around the world are embracing the Internet TV revolution.”

Also speaking on the earnings call, Netflix’s chief financial officer David Wells re-iterated the firm’s ambition to launch globally in 200 countries by the end of 2016, claiming there will be some “significant” launches in the second half of this year.

Netflix also hinted at an upcoming Polish launch, with Hastings twice referring to the market during the call, noting “Netflix is not yet in Poland.”

Discussing competition in the online TV space, Hastings and Wells said in a letter to shareholders that the recently launched HBO NOW service in the states is not a substitute for Netflix given the different content available.

“We view ‘Internet MVPD’ offerings like the rumored Apple offering, Sony’s Playstation Vue and Dish’s Sling TV as more competitive to the current pay TV bundle than to Netflix which is lower cost, has exclusive and original content, and is not focused on live television,” said Wells and Hastings.

The pair noted that piracy remains a “considerable long-term threat, mostly outside the US.” Discussing users accessing Netflix from countries where it is not yet live using virtual private networks, Hastings said on the call that this is “certainly less bad than piracy” but added it is “very hard to detect.”

“Because we are focused on getting global very quickly, I think we will see this issue disappear and it will disappear because we will be able to meet the demand directly in all the countries,” said Hastings.

Chief content officer Ted Sarandos added: “The best way to really make the VPN issue a completely nonissue is through global licensing that we are continuing to pursue with our partners.”