Netflix Earnings: Reed Hastings Reveals Details Behind the Curtain

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Netflix (NASDAQ:NFLX) CEO Reed Hastings announced plans for his company to expand its streaming content library during Monday’s earnings call. Even though Netflix’s first-quarter earnings came in ahead of analysts’ expectations, Hastings still had to respond to a tirade of questions and discuss his company’s future plans.

Hastings reiterated that his company’s streaming strategy will differ from Netflix’s past. The company will emphasize a narrower selection of exclusive and original content rather than the more comprehensive selection that the service had with DVDs.

Hastings compared Netflix to cable, saying that it is normal for a network to start out with low-end, non-exclusive content and want to move up in the content-buying economic strata. But that is no different than competing with other cable networks for exclusive syndication rights over premium content. According to Hastings, that trend will continue and there will always be a broad range of non-exclusive content.

Original content may not be the future of Netflix. Hastings said that it is too early to make original content a big percentage of Netflix watching. Currently, Netflix’s only original show to premiere on the service is Lilyhammer, which Hasting says is proving to be a worthwhile investment for the company. High-profile original programming, like House of Cards, should continue to build a nice percentage of total viewing.

Hastings Netflix also made clear that Netflix had no plans to create a tiered pricing plan that charges some customers a higher rate in return for access to more content. Netflix is a long way from offering different streaming plans, but if the market matures, Netflix could make a turn in that direction. Hastings asserts that streaming video is still in its growth phase, and he is interested in keeping things as simple as possible.

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