Hastings addresses HBO competition: 'It's just one more channel'

With Time Warner Inc. announcing that HBO would launch as a standalone product in 2015, available for streaming without a pay-TV subscription, Netflix (NASDAQ: NFLX) CEO Reed Hastings was predictably asked about the move during his company's third-quarter earnings call Wednesday.

After all, Hastings has for several years identified HBO--not Hulu or Amazon (NASDAQ: AMZN)--as his SVOD service's biggest business rival.

"On the consumer side, it's just one more channel," Hastings told investors. "Consumers already have access to Hulu, Amazon, pay-per-view … so many great sources of entertainment. It's not much of a change in the direct competitive landscape. We have completely different content, so I don't think there will be a huge change on the consumer level."

Noting that Netflix and HBO have competed over-the-top in the Nordic region already for several years, Hastings said, "When we talk to people in that region who are really into content, they subscribe to both services. And I think many, many people [in the U.S.] will subscribe to both services."

Hastings did concede competition could become more intense on the content acquisition side.

"There's another buyer on the market now," added Netflix content chief Ted Sarandos.

Addressing a wide number of issues ranging from quickening international growth to slowing domestic growth, Sarandos was asked about some of the more recent content deals Netflix has made--specifically, the four-film deal with Adam Sandler.

"That deal was driven by following market after market and seeing how Adam's films perform, from the deepest catalog to the newest releases," Sarandos said. "Not only do his titles outperform the box office, they defy the convention that American comedy doesn't travel well. His last movie was 60 percent international [in terms of global box office gross]."

Sandler's last film, Blended, grossed $80.5 million overseas but only $46.3 million domestically. In fact, after producing a string of comedies that grossed $100 million or more at the domestic box office, only one Sandler film out of his last five, the 2013 sequel Grown-ups 2, has achieved that benchmark.

For more:
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