Reed Hastings, Netflix CEO, decided to keep calm in the face of pending competition from Disney’s upcoming over-the-top video service.
Hastings stated that he has plans of subscribing to Disney’s upcoming service. The approaching video service is meant to compete with Netflix, and include content that Disney will pull out of Netflix.
“I think in particular Disney, with its strength of brand and unique content, will have some real success. I know I’ll be a subscriber of it for my own personal watching. The same way as many Disney and Fox executives also subscribe to Netflix,” said Hastings in a conference call.
Disney was also involved in a deal with Twenty-First Century Fox last year, buying assets off of the latter. The deal gave the combined company a considerable stake in Hulu, another Netflix rival.
Despite this, Hastings was still optimistic; pointing out that Netflix is different in key ways, including its lack of advertising.
“Everyone knows the costs of competition, but the benefits are that your competitors are challenger brands, so they don’t tend to follow your strategy,” stated Hastings. “We get to learn from that. Our view would be to let them try to innovate on those aspects and watch what they do, and learn from consumers. Do they really love it? It doesn’t change our strategy.”
Netflix Crosses $100 Billion Market Capitalization
Investors are taking Hastings side on the matter, causing Netflix shares to rise more than 9 percent during after-hours trading. This followed the company’s better-than-expected subscriber growth in its Q4 2017 report released on Monday.
“Our thing is working, and what we have to do is not get distracted,” Hastings pointed out. “Total streaming will grow faster because of the competition.”
The media streaming service provider added 2 million more subscribers during the final three months of 2017. Netflix surpassed expectations of 5.1 million subscribers.
It tripled profits of the entertainment company who is quickly producing programs meant to dominate internet television across the globe.
These results pushed Netflix to reach more than $100 billion of market capitalization for the first time. More than half of all U.S. broadband households are signed up to the video streaming service. It’s working on buildings its customer base in 190 countries through spending billions on programming.
Netflix gained 6.36 million subscribers in international markets from October through December of last year. This was due to new season releases of critically acclaimed shows “Stranger Things” and “The Crown”, and Will Smith’s action movie “Bright.”
Netflix shares climbed to a total of 53 percent in 2017 alone.
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