Influx of OTT Competitors Creating 'Bigger Ecosystem' That Benefits All, Netflix CEO Says

The “attention” that has ensued as new competitors such as HBO Now and Sony Vue enter the over-the-top space “is only creating a bigger ecosystem, drawing more and more people into thinking, ‘Hey I’ve got to check that out and try this Internet TV thing,'” Netflix CEO Reed Hastings said Wednesday in the company’s quarterly online interview. Though “linear TV” has had an “amazing 50-year run,” Internet TV is starting to grow now, and “clearly over the next 20 years Internet TV is going to replace linear TV,” Hastings said. “And so I think everyone is scrambling to figure out how do they do great apps.” The ecosystem “will just keep getting built up and so it's a transition into figuring out the Internet,” Hastings said. “And the way people do that is to get involved with us, with our competitors, to try to start to learn what are the new patterns and modalities because Internet TV is the way that people will consume video in the future.” Netflix is “super-happy right where we are” on its pricing plans relative to the new competition, Hastings aid. “We’ve got a great mix of pricing plans and options for those who get a new 4K television and they are excited about 4K content. We are the leading service in the world for 4K and that plan is a little more expensive at $11.99. So as more 4K TV is sold, we will get people to upgrade to the $11.99 plan.” Of the company’s “total pricing structure,” Hastings said: “We couldn't be happier with the way it creates an incredible value for the consumers. It feels fair to them and it's propelling our growth.” Netflix has seen smart TVs “just continuing to grow and grow in usage and sales,” Hastings said. “Virtually every new TV sold now is a smart TV, at least at the middle and high-end, and it's natural for people to use. Now, do they also watch on tablets? Yes, and on phones. So really all those categories are experiencing absolute hours growth, but on a percentage basis, smart TV is one of our fastest-growing categories.” Netflix is “very encouraged” with the “general consumer perspective” at the FCC that “broadband access is so important that it is a utility,” Hastings said, of the commission's decision reclassifying broadband as a Communications Act Title II service. “It is like power distribution where it's a natural monopoly in the last mile. There should be one fiber or one cable going to a home with super high speed and that's the architecture of the future. So everything around it being a utility is great for Internet companies like ourselves and it's great for consumers.”