Netflix Cites ‘Very, Very Beneficial’ Results From ‘New Bundle Models’ With MVPDs

Netflix’s “partnering strategy” is on an “an evolving trajectory across all the markets that we serve in,” said Chief Product Officer Greg Peters Monday on the company’s quarterly earnings interview webcast. The “new wave” of partnerships Netflix started with MVPDs, ISPs and mobile operators is beginning to bear fruit, he said. “Based on what we've seen with these new bundle models,” through Comcast and others (see 1804130004), “we've seen the economics of those, if you take in the retention, the acquisition characteristics to be very, very beneficial,” he said. “We love the fact that we can work with these partners to access whole new groups of consumers, make it easy for them to find out about Netflix, to sign up and have a great way to access the service and watch more and more.” It’s “easier” than ever to “create a television network called an app,” said CEO Reed Hastings. “Think of all apps on your phone” as having “some form of video, or most apps will,” he said. All of that “mobile phone energy will spread to the television with operating systems like Roku’s,” he said. Netflix wants to be “one of the apps that nearly everybody has on their home screen, whether that's on the phone or on the television,” he said. Looking at the mobile phone “ecosystem, it's very rich, and we see television getting close to that,” he said. Despite all its recent successes, including easily beating forecasts on Q1 net subscriber additions (see 1804160065), Netflix's biggest challenge is that it still accounts for only "a fraction of the hours of viewing of YouTube," said Hastings. "We're a fraction of the hours of viewing of linear TV. We've got some great momentum, and we're very excited about that, but we have a long way to go in terms of earning all of the viewing that we want to." Netflix shares closed 9.2 percent higher Tuesday at $336.06.