Reed Hastings: Pandemic Video Trends Not Relevant to Real World

When Netflix failed to meet its own subscriber growth projections in the third quarter, ended Sept. 30, co-CEO Reed Hastings shrugged off the shortcoming as inconsequential “forecast noise.” Speaking Oct. 20 on the fiscal webcast, the co-founder of the SVOD behemoth contends the service’s 195 million global subs is a statistical force to be reckoned with going forward.

“We’ve been doing high 20s [in terms of millions of net adds per year] for four years,” Hastings said. “And this year on guidance for 34 million, so [we’re] setting all kinds of records.”

Hastings said the pull-through in outsized sub growth in 2020 due to the coronavirus pandemic into 2021 would be relatively modest, around 5 million to 6 million subs. He said factors such as how much the quality of the service and word-of-mouth increases affects sub growth as well.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Our growth sort of seesaws around that number depending on the particular conditions going on in that quarter, but year-after-year, it’s fundamentally followed that improvement in the service growth curve,” Hastings said.

The executive downplayed the pandemic significance on OTT video as a one-time phenomena with a “minor background effect” on the distribution channel. Hastings said Netflix competes against a wide range of distractions, including social media, TikTok, YouTube and Fortnite, among others. He said user engagement, subscriber churn and related trends on the service are similar to what management expected a year ago.

“There was temporary learning when there’s no [live] sports, but it’s like, well, it’s not really that interesting finding because it’s just not relevant to the [non-pandemic] world,” Hastings said. “Now we’re back in a world with partial [TV] sports and that’s fine and we’re [still] growing.

“So really, the limiter for us is what’s the quality of our service, how often, how many nights can you say, ‘oh my God, I want to go to Netflix and watch the next show.'”

Leave a Reply

Your email address will not be published.

12 − 11 =

This site uses Akismet to reduce spam. Learn how your comment data is processed.