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Netflix CEO Reed Hastings Says Company’s Model Inoculates It From Tech’s Privacy Woes

”We’re really pretty different from the pure tech companies,“ Hastings says during the company’s earnings interview

In the wake of Facebook’s data scandal with Cambridge Analytica, people have gotten even more paranoid about who has access to their personal data and what they’re using it for.

During Netflix’s quarterly earnings interview on Monday, Netflix chief Reed Hastings was asked by Morgan Stanley analyst Ben Swinburne how the new focus by regulators and consumers might impact the streaming giant.

Hastings is pretty confident it won’t.

“Well I’m very glad that we’ve built a business not to be ad supported but to be subscription. We’re very different from the ad supported businesses and we’ve always been very big on protecting all of our members’ viewing,” Hastings said, reiterating that Netflix doesn’t sell ad space on the platform. “I think we’re substantially inoculated from the other issues that are happening in the industry, and that’s great.

“Second, I’d point out that we’ll spend over $10 billion on content and marketing and $1.3 billion on tech so just objectively we’re much more of a media company in that way than pure tech, ” he continued. “Now, of course, we want to be great at both, but again, we’re really pretty different from the pure tech companies.”

In a March interview with Recode’s Kara Swisher, Apple boss Tim Cook said: “I wouldn’t be in this situation,” referring to Facebook CEO Mark Zuckerberg

He also noted that Apple’s business is fundamentally different from the ad-driven juggernaut Zuckerberg built. “The truth is, we could make a ton of money if we monetized our customer — if our customer was our product,” Cook added. “We’ve elected not to do that.”

During Netflix’s 2018 first quarter ending on March 31, it reported revenue of $3.7 billion and earnings of 64 cents a share, just edging analyst estimates of 63 cents a share and $3.69 billion in revenue. The Los Gatos, California-based company increased revenue 43 percent year-over-year.

The key for investors was the 1.96 million U.S. subscribers and 5.46 million internationally that Netflix added during the quarter. Those additions pushed the company past 124 million overall members. Analysts had anticipated 1.45 million domestic subs and 4.9 million internationally.

Netflix’s international subscriber base now accounts for 50 percent of the company’s revenue, Netflix said in a statement.