Netflix Doesn't Want to Own Content


It’s “quite unlikely” that Netflix would buy or invest in a movie studio, or otherwise produce its own content, CEO Reed Hastings said on the company’s Q4 earnings call (see Netflix Tops 20 Million Subscribers).

“When we start taking creative risks — that is, reading a script and guessing if it was going to be a big hit and who might be good to cast in it — it’s not something that as fundamentally a tech company or a company run by at tech CEO like myself is likely to build distinctive organizational confidence in,” Hastings said on the company’s Q4 earnings calls, responding to an analyst’s question on the subject.

Netflix, Hastings continued, is “better off on letting other people take creative risks, [and getting] the rewards for when they do that well. And then what we do is focus on matching the different products that are made with the right consumers, the sort of very technological aspect of matching it and streaming it.”

Listening to Hastings’ comments, I recalled a meeting I had with Starz Entertainment CEO Bob Clasen in the fall of 2006.

I asked whether Starz had plans to produce its own original series, given this was a major focus for his competitors Showtime and HBO.

No, Clasen answered. We’re all about movies. That’s what people expect when they order Starz, and we’re not gonna change it.

Fast-forward to today, and Starz is going gangbusters with the Spartacus franchise — see Starz Nets 2.8 Million With ‘Spartacus: Gods Of The Arena’ — and in December 2009 hired ex-HBO chief Chris Albrecht to shepherd more originals.

Separately, BTIG analyst Rich Greenfield suggests that Comcast — now that the NBCU deal is done — buy Starz, to compete with HBO and keep valuable content out of Netflix’s hands.

“While we doubt that consumers are ‘cutting the cord’ in meaningful numbers (subscribing to Netflix in lieu of multichannel television), given that Netflix now has over 20 mm subscribers and there are only so many hours in a given day, it is hard not to be concerned that Netflix usage will begin to eat into existing, core media viewership levels,” Greenfield writes in a blog post (registration required).