Although Netflix have embarked on a charm campaign with cable providers to get it’s internet TV service installed on cable boxes, CEO Reed Hastings has said it will be, “many years before cable set-top boxes match Internet set-top boxes for Netflix streaming volume.”
He was talking in a letter to shareholders as Netflix released it’s quarterly earnings report, where they announced they now have 40million subscribes worldwide, and 30 million in the domestic market. The shares hit $354.99, which is a rise of $21.49 (6.44%) in regular trading.
The streaming company now has more subscribers than the more expensive cable service HBO, showing how fast the streaming service is growing. Netflix are also negotiating with cable companies to offer streaming as an add-on service.
Already they have struck deals with cable operator Virgin Media in the UK, and speaking with CFO David Wells, Hastings said, “We launched with Virgin Media, the UK’s leading cable company, a world first: Netflix on a major cable set-top box. It is rolling out over this quarter to Virgin Media’s subscribers. The integration of search and suggestions between broadband and cable is great for customers, and we want this superior experience to help Virgin Media gain market share in the UK.
Cable operators like Virgin Media believe that by enabling their subscribers to do more with their cable set-top and remote, they can increase satisfaction, relative to their subscribers using a separate Internet set-top box or smart TV to enjoy Netflix. We are open to more of these integrations with cable set-tops around the world, but given the fragmented technology footprints, we think it will be many years before cable set-top boxes match Internet set-top boxes for Netflix streaming volume. As a general rule, we’re happy to support devices from other video providers as long as we get application placement commensurate with our popularity.”
He also confirmed that for each dollar spent on content next year, over 90 cents will buy movies and shows, with the rest paying for original shows. He also said that surprisingly Orange is the new Black would end the year as the most-watched original show.
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