Netflix FY 1Q17 Earnings Call Notes

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Reed Hastings – Founder and Chief Executive Officer

YouTube has a billion users

“Well, I’m – we’re super excited expecting to cross 100 million this weekend, that’s a big accomplishment. But it’s really just the beginning. When you look at YouTube having a billion active users and a billion hours every day. When you look at Facebook’s, multi-billion numbers. We see that the Internet is just a phenomenal opportunity, of course, we’re pay service, not ad supported. We’re not as deep in international as those companies. But we definitely see a big opportunity around the world to just continue to do what we’ve been doing, which is make fantastic content, get people really excited about that content, and then we’re just continuing to grow.”

Viewing is nowhere near as big as YouTube

“Yes, viewing is very large and growing, but nowhere near as big as YouTube. So we definitely got YouTube envy and we’ve got a lot a room to go. And some of the new shows like Ted was talking about, our movie out of Korea [indiscernible] has great global potential. So, we’re finding great talent around the world and that’s what drives up the viewing.”

We don’t see a wall that’s going to stop us from getting most people in the US

“A couple of years ago, Doug, there was a bunch of fear about the 30 million sub wall, with AOL had hit that and HBO would hit that. And the thing is everybody watches TV and nearly everybody has the Internet. So I don’t see anything that’s going to stop Netflix from getting to most people in the United States and then eventually hopefully most people around the world. But we’re not – we’re just going to focus on the everyday of making the services better and better.”

Competition doesn’t affect us

“Like at one level, Amazon is an amazing company and doing so many different things, it’s really incredible. And then you think of Jeff Bezos in addition to all of Amazon doing a Washington Post and Blue Origin Rocket. So, I will say, we do think about all of that and their tremendous track record. On the other hand, they’re doing great programming and they’ll continue to do that. But I’m not sure if it will really affect us very much, because the market is just so vast. Think about it when you watch a show from Netflix and you get addicted to it, you stay up late at night. You’re really – we’re competing with sleep on the margin. And so it’s a very large pool of time. And a way to see that numerically is that, we’re a competitor to HBOs and yet over 10 years we’ve grown to 50 million, and they’ve continued modestly growing, they haven’t trunk. And so if you think about it as we’re not really affecting them, the answer is, well, why? And that’s because we’re like two drops of water in the ocean of both time and spending for people. And so Amazon can do great work and it would be very hard for it to directly affect us. It’s just home entertainment is not a zero sum game. And again, HBO success, despite our tremendous success is a good way to illustrate that.”