Netflix aims for 90M U.S. subscribers


Netflix may have lost a few customers in the wake of last year’s Qwikster debacle, but it still has very ambitious goals for subscriber growth: the video service wants to eventually be two to three times as big as HBO, which would equal between 60 million and 90 million domestic subscribers, according to a presentation published by CEO Reed Hastings this week. The slide deck, titled “Netflix Business Opportunity,” is meant to explain the company’s business to potential new hires — but it also provides interesting insights into Netflix’s goals as well as its take on competitors and the changing video marketplace.

Hastings remarked in the presentation that HBO currently has about 30 million U.S. subscribers but that Netflix has a number of competitive advantages over the cable network. It’s unbundled, so users don’t need to buy it in conjunction with an expensive cable package; it offers a wider selection of content, including kids shows and anime; and it comes with a personalized UI that works on multiple devices. “Netflix USA should grow to 2-3x of HBO,” he concluded.

The presentation includes a number of other interesting tidbits:

  • Hastings painted Netflix as part of a new generation of Internet TV networks, which also include YouTube, Hulu and iTunes. YouTube gets some props for being the first truly global player, but Hastings still sees Netflix as the core innovator in this space. “Netflix is radically improving video entertainment by creating a leading global Internet TV network that others will follow,” one of the slides reads.
  • Speaking of others: Hastings still believes that the “most direct competitor for viewing time will be HBO,” but he also acknowledged Hulu Plus, Amazon Prime and “large new entrants willing to invest heavily in content, marketing and technology” as competitive threats.
  • Other factors mentioned by Hastings as long-term threats include ISP interference through bandwidth caps or net neutrality violations as well as unlicensed sites like The Pirate Bay.
  • Hastings believes that TV Everywhere will eventually transform existing pay TV providers to become “mostly a billing aggregator for many networks.”

It’s worth noting that this is the second edition of this particular presentation, if only to point out one interesting omission: the previous version, posted by Hastings two years ago, predicted that DVD shipments would continue to grow for a few more years, after which they would slowly decline. This time around, DVDs aren’t even mentioned.

Check out the entire presentation below:

Netflix Business Opportunity

View more presentations from Reed Hastings.

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