2009.03.16: March 16, 2009: Headlines: Figures: COS - Swaziland: Business: Internet: Movies: Entrepreneurship: Reuters: Reed Hastings eyes international markets amid record growth
Peace Corps Online:
Directory:
Swaziland:
Special Report: RPCV Reed Hastings:
Reed Hastings: Newest Stories:
2009.03.16: March 16, 2009: Headlines: Figures: COS - Swaziland: Business: Internet: Movies: Entrepreneurship: Reuters: Reed Hastings eyes international markets amid record growth
Reed Hastings eyes international markets amid record growth
Despite some analysts' forecasts that Netflix may not fare so well as the recession deepens in the second half of the year, Hastings may be in a position to dream big. This year, the company will have operating income of about $150 million, "substantial" free cash flow and no debt, he said, and it has about $250 million of cash. "I don't think there is anything we need other than to continue to execute very well," he said. Businessman and Internet Visionary Reed Hastings of California, the founder of Netflix, served as a Peace Corps Volunteer in Swaziland.
Reed Hastings eyes international markets amid record growth
INTERVIEW-Netflix CEO eyes int'l markets amid record growth
Mon Mar 16, 2009 2:03pm EDT
By Gina Keating
LOS ANGELES, March 16 (Reuters) - Netflix (NFLX.O) Chief Executive Reed Hastings is looking at ways to double his subscriber base and expand overseas amid the worst economic climate in decades -- one that is propelling his online movie rental company to its second consecutive quarter of record subscriber growth.
In an interview on Friday afternoon, Hastings told Reuters that the company's arrival five weeks ago at the benchmark of 10 million subscribers was "startling because we all have so many friends who are ... laid off and businesses are down."
The company, which charges monthly fees for various DVD rental packages, expects to report a record number of net subscriber additions for the quarter ending this month due to rapid growth of its online streaming service as well as consumers' search for entertainment bargains.
"We are fortunate that in a recession we have rotated into favor," Hastings said.
Despite some analysts' forecasts that Netflix may not fare so well as the recession deepens in the second half of the year, Hastings may be in a position to dream big.
This year, the company will have operating income of about $150 million, "substantial" free cash flow and no debt, he said, and it has about $250 million of cash.
"I don't think there is anything we need other than to continue to execute very well," he said.
As a result, Netflix is revisiting goals that it put on hold when Blockbuster Inc (BBI.N) entered the online rental market in 2005 with an aggressive push to knock out its smaller rival.
A GLOBAL COMPANY
Hastings and Netflix executives "fantasize" about expanding the streaming service internationally in a twist on the 2004 British expansion plan it abandoned to fend off Blockbuster at home. "Most Internet companies are global companies," Hastings said, "and when you think about that kind of big opportunities for us, you'd have to say, 'Jeez, isn't there a big opportunity in China, Brazil, India, Europe?'
"We don't have any specific plans, but over the next several years, it's definitely something we want to look at."
Hastings also hinted at resurrecting the company's 2006 goal of reaching 20 million subscribers by 2012, which Netflix later retreated from as the battle with Blockbuster deepened.
"That's a bit aggressive, but it's theoretically possible," he said in the interview.
But while competition from debt-plagued Blockbuster eases, Hastings sees a tough competitor in Redbox, which offers $1 DVD rentals through self-service kiosks in chains like McDonald's (MCD.N), Wal-Mart (WMT.N) and Walgreens (WAG.N). The fast-growing company expects to have 20,000 locations by year's end.
"When we ask our customers who are leaving what they are going to do for movies, Redbox is coming up more and more," Hastings said. "For the next couple of years they may be our largest competitor. Of course, they are not going to get into streaming so our competition will only be on the DVD side."
Despite dour forecasts for DVD sales and predictions by Walt Disney Co (DIS.N) Chief Executive Bob Iger and other media industry executives of a fundamental shift in consumer buying patterns, Hastings sees the Blu-Ray format fueling "at least five years" of growth in DVD rental.
"For us it's just growing like weeds," he said. "Nearly 10 percent of our subscribers are paying for Blu-Ray. Even in the last three months, it's continued to grow very rapidly."
The growth of the streaming service to 20 percent of Netflix's subscriber base, many of them PC and game console users, is bringing costs with it.
"We are paying the studios a lot more and the post office a little less, but that's this early phase where we are supporting both services," Hastings said.
But those larger payments have yet to translate into content deals that give Netflix access to new movie releases, a competitive advantage Hastings doesn't expect for a decade or more.
"That has not moved at all," he said. "(It will take) a lot more money -- we've just got to keep growing and keep asking, and we'll see what comes about."
(Editing by Lisa Von Ahn)
Links to Related Topics (Tags):
Headlines: March, 2009; RPCV Reed Hastings (Swaziland); Figures; Peace Corps Swaziland; Directory of Swaziland RPCVs; Messages and Announcements for Swaziland RPCVs; Business; Internet; Movies; Entrepreneurship; California
When this story was posted in March 2009, this was on the front page of PCOL:
Peace Corps Online The Independent News Forum serving Returned Peace Corps Volunteers
| Director Ron Tschetter: The PCOL Interview Peace Corps Director Ron Tschetter sat down for an in-depth interview to discuss the evacuation from Bolivia, political appointees at Peace Corps headquarters, the five year rule, the Peace Corps Foundation, the internet and the Peace Corps, how the transition is going, and what the prospects are for doubling the size of the Peace Corps by 2011. Read the interview and you are sure to learn something new about the Peace Corps. PCOL previously did an interview with Director Gaddi Vasquez. |
Read the stories and leave your comments.
Some postings on Peace Corps Online are provided to the individual members of this group without permission of the copyright owner for the non-profit purposes of criticism, comment, education, scholarship, and research under the "Fair Use" provisions of U.S. Government copyright laws and they may not be distributed further without permission of the copyright owner. Peace Corps Online does not vouch for the accuracy of the content of the postings, which is the sole responsibility of the copyright holder.
Story Source: Reuters
This story has been posted in the following forums: : Headlines; Figures; COS - Swaziland; Business; Internet; Movies; Entrepreneurship
PCOL43120
82