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Netflix’s CEO just revealed the most important issue for Internet TV

 

Netflix executives dished insights on the company, and the emerging internet TV industry during a post-earnings call.

Netflix has no immediate plans to raise prices for U.S. subscribers, and will instead seek to lift profits by encouraging customers to upgrade to video on demand service that comes with better resolution. Meanwhile, the company plans to beef up its film library by adding new movies from Disney and by releasing more homegrown shows like the upcoming Narcos.

Those are some of the strategic insights shared by Netflix executives on a conference call following followed the release on Wednesday of its surprisingly buoyant second quarter earnings.

During the 45-minute discussion, which was broadcast on YouTube, the company also repeated its mantra that it “wants to get like HBO before they get like Netflix.” Translation: Netflix wants to master the content-production game before its rival can match it wide reach.

But the most significant moment came when CEO Reed Hastings explained the company’s decision to support a big cable merger between Charter and Time Warner Cable. The key to Netflix’s support, said Hastings, was the companies’ agreement to abide by settlement-free peering, which means the companies will not charge content providers for distributing their Internet traffic.

This is important because Netflix, in 2014, was locked in a bitter war with Comcast and other Internet Service Providers over paying extra charges, which some likened to a form of extortion (ie “pay up or your Internet stream will get choppy”). The dispute led Netflix to ferociously oppose a proposed merger between Comcast and Time Warner Cable.

Read the entire story here.

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