Netflix CEO Says Online Streaming Will Soon Overtake Cable Offerings

Reed Hastings, CEO of Movie on Demand media giant Netflix, recently spoke at a UBS investor conference in New York this past week. Among other things, he says that he believes that consumers will turn away from traditional cable fare, and instead turn more often to streaming options. And according to the Hollywood Reporter, that he believes Netflix will come out on top, despite the series of setbacks the company has incurred, resulting in a stock price drop of nearly seventy five percent since just last summer.

Hastings, in a move to counter the criticism that he and his company have endured since first suddenly raising prices on its services some sixty percent, then announcing it would split DVD rentals and streamed content into two distance companies, then announcing he'd changed his mind. All of this was then followed by some less than convincing moves to raise money to buy the licensing agreements that Hastings has insisted is the key to success in the coming media war.

Now, during his address, after admitting that he'd suffered some slings due to past missteps, he said the company is poised to move forth in the new era, leaving the less than pleasant taste of past mistakes behind, "like a bad movie made by a great director."

Hastings says the immediate future for streaming will likely be a head to head match between Netflix and HBO Go, which he refers to as his primary competition. Though it's likely there were be more than just the two of them duking it out for streaming supremacy, if streaming does indeed go mainstream. He says the switch over could come as soon as the next three to four years as the Internet backbone is improved to handle such a load, and more consumers move to high broadband access.

In his talk he also mentioned that his company will be investing at least $2 billion over the next year to obtain licensing rights to more popular movies and that Netflix will also be moving into creating its own content as HBO already does.

What's not certain is if Hastings and his company will be able to raise that kind of money in an environment where its stock price is continuing to slide to the extent that its credit rating has been reduced to BB. Hastings claims it's still just a temporary slide brought about by customer anger and will dissipate when customers start seeing how much the inflow of cash from the higher priced service affects their viewing choices.