If there’s any one individual most responsible for the upheaval now afflicting the television industry, it’s Reed Hastings, the chief executive and co-founder of Netflix. Having started life as a DVD rental business, Netflix has successfully pivoted to be the leading subscription video streaming service, with more than 36 million paid members in the U.S and nearly 51 million globally.
Netflix’s success, and the rising number of people eschewing pay television for broadband-delivered video, is now luring traditional TV channels into the streaming space. Just last week HBO and CBS announced plans to launch streaming services in the U.S. for a monthly fee. That increased competition highlights the importance of Netflix’s push to make its own content like “House of Cards,” a strategy it has extended into financing Hollywood movies, rather than relying on rerun TV shows and movies available elsewhere.
For all its success, Netflix still faces much uncertainty. Its subscriber growth was weaker than expected in the third quarter, which it reported last week. It has taken on $8.9 billion in obligations to pay for streaming content in coming years to help drive a global expansion. Mergers could give broadband providers like Comcast more leverage over Netflix. We recently talked to Mr. Hastings about HBO’s newly announced streaming plans, Netflix’s riskier bets to finance original films, sports programming and more. Edited excerpts below.