Netflix CEO explains why he doesn’t mind that his company will pay hundreds of millions more to renew its streaming deal with Starz
Netflix CEO Reed Hastings doesn’t seem mind playing Daddy Warbucks for Hollywood.
During a session with AllThingsD’s Kara Swisher at the D9 conference Wednesday, Hastings cheerfully explained why he doesn’t mind rising content costs: Because it means that his company is growing.
“Part of our goal is to make our subscribers happy and part of it is to make content producers really happy,” he said. “And that’s in writing big checks.”
He also noted that the bigger checks offer a tantalizing promise to Hollywood — that, “as we grow, the checks will get bigger and bigger.”
He said that the company views rising content expense a positive as long as it roughly parallels subscriber growth.
Quizzed about the company’s negotiations to renew its streaming deal with Starz Media, he admitted that he expects the cost to be much higher than the original terms, reported to be $30 million.
That deal is up in 2012, and renewal fees have been projected between $200 million to $350 million. Asked by Swisher to comment on the estimates of $200 million to $300 million, he noted that the deal had not yet been made, before conceding that those figures “wouldn’t be shocking.
“In other words, we’ve grown a lot since then and we’re paying a lot more for the content,” he added.
Hastings also acknowledged that he would love to license HBO content for his online rental and streaming service, but so far the Time Warner company has resisted Netflix’s checks. He also shot down the notion that he expects to sell Netflix soon, alluding to the company’s global aspirations.
Noting that Netflix now has more than 20 million subscribers, he pointed to the 5 billion mobile subscribers around the globe as would-be consumers of streamed content through his service.
“We’re very focused on growing our business, as would anyone would be in our shoes,” Hastings said. “And we’ve got a very long term, great future.”
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