Reed Hastings, CEO, Netflix, Inc. (NASDAQ:NFLX)
Sure. The biggest one is our $12 month plan is our plan for UltraHD. Now, today, there are very few televisions that are UltraHD and we only have a few titles. We have more than anybody else but we only have a few titles. But if you look ahead, two years, four years from now, many of the TVs sold at BestBuy will be ULtraHD and lots of our content will be UltraHD, and it’s a natural match. So I think what we will be able to do is, as the high end of the markets spends $2,000 to get ULtraHD televisions, it seems fair and natural to them that just like you pay for a difference between standard HD, that there’s a difference between HD and UltraHD. So that’s the way that we get incremental revenue without making any changes ourselves, by just letting the tide come to us.
Ted Sarandos, Chief Content Officer, Netflix, Inc. (NASDAQ:NFLX)
And Reed, if I could add to that, I think what’s exciting about this move is, unlike other format changes, this one is led by a thin layer of content but the front-end of the content. So we are shooting all of our originals series with very few exceptions in UltraHD — Breaking Bad, licences are all in UltraHD, Blacklist — all the very front line shows and then complimenting it with more and more of the catalogue, but it’s not a show off of weird, quirky things that look good, it’s actually the program and people are watching.
Mark Mahaney, RBC
Another question for Ted. You talked about your overall content — that you are gaining efficiencies in terms of your procurement of content. Can you tell if whether the competitive landscape is changing at all? Amazon may be getting critical acclaim, it’s hard to tell whether they are getting customer claim for their shows. Are you seeing anything in the market that suggests that your ability to acquire content, get content, is getting easier or harder?
Ted Sarandos, Chief Content Officer, Netflix, Inc.
On the original side, it’s a very competitive market and we are fortunately have positioned ourselves as a kind of a premier destination for the biggest and best projects. We don’t say yes to all of them and we see them show up in other places, but we do think that we are the first or second go-to for most of the projects that we are looking for.
On the licensing side is it kind of the same thing — which is, we increase our footprint, our ability to compete in that space really helps being able to get the most high profile shows. By doing that, by being more and more confident at earlier and earlier stages. So, being able to license that content with much greater confidence sometimes, pre-pilot gives us the ability to find those efficiencies.
Richard Greenfield, BTIG
But Ted, just to follow on that, stacking rights has become a real issue for US studios and they are now looking at your requirements for limiting stacking and also the global buying, meaning, you don’t want to buy things that don’t have that global license attached to it. Is that making it harder for you to buy content from some of the big TV produces as you look at over the course of the next 12 months, whether it be the Foxes, the Warners, the CBSs, or is that a non-issue?
Ted Sarandos, Chief Content Officer, Netflix, Inc. (NASDAQ:NFLX)
I think really the truth of it is that it doesn’t make it harder because it actually makes it more attractive as the studios kind of streamline their operations, I think they are looking for more streamline ways to selling their programming efficiently. On the stacking rights, we’re not standing in the way of the network withholding those rights. We are just saying we’re not paying full freight if it is not fully exclusive. So if they want to withhold the right for stacking, they are welcome to do that, it’s just there is a price tag to it, and some portion of the $3 billion we’re spending this year.
