Richard Greenfield, BTIG
But you are essentially limiting their downside but you are also limiting the studio’s upside, if they agree to sell the content to you. Is that fair?
Ted Sarandos, Chief Content Officer, Netflix, Inc. (NASDAQ:NFLX)
In what way?
Richard Greenfield, BTIG
Well, they don’t have the ability to sell it to — based on the success here, they are selling to you, let’s just say, pre-release. They can’t go out and sell it in other markets overtime if they basically limit the stacking, they obviously can’t leverage all of their other platforms with those full and season stacking.
Ted Sarandos, Chief Content Officer, Netflix, Inc.
They can do it, Rich. They just can’t do it for free.
Richard Greenfield, BTIG
Right.
Ted Sarandos, Chief Content Officer, Netflix, Inc.
Yeah.
Mark Mahaney, RBC
Question for Reed. Reed, a couple of months ago, I think HBO talked about plans to launch a stand-alone streaming service in sometime in 2015. Any thoughts you have on what kind of impact that can have on your business, since specifically, do you think there is a probability that there would be a broad-streaming solution that will come out that at price point lower than Netflix?
Reed Hastings, CEO, Netflix, Inc. (NASDAQ:NFLX)
It’s really hard to speculate on what they’re going to do on pricing to the degree that they go really aggressive and match Netflix’s price for HBO, then it is extremely disruptive to their current ecosystem since the prices are higher than that. They generally give in the signal that they are going in softly in terms of not going too disruptive using existing partnerships. That would tend to imply a litle bit higher price point. In the Nordics, they did choose — which is the first place they competed over the top — to be directly on top of us, about 79 Krona for pricing.
So we’ll just wait and see. I think even at they would have matched us in pricing, it’s just going to be a lot of people subscribing to both. I think over the last five years, with HBO and Showtime, when Showtime has a great run with Homeland and The Affair, it increased Showtime’s subscriptions. It doesn’t decrease HBO. And I think we’d see the same with us and HBO which is they do great work, people will additionally subscribe to them because their cost is pretty small per month, ours is small per month, relative to all the other entertainment options. So it is definitely not a zero-sum situation.
Richard Greenfield, BTIG
I guess both Reed and David on the next question as it relates to Dish and Sling TV. MVPD integration in this country has been really a challenge for Netflix. I think you’ve had a lot more success signing deals outside of the United States. What does the Dish deal mean initially in terms of the willingness in the US? Will be ever see you on the X1 integrated into the platform? And then to the extent that DISH is actually creating subscribers, this is the part for David, curious how you are compensating Dish if they are able to actually grow your editions?
Reed Hastings, CEO, Netflix, Inc. (NASDAQ:NFLX)
I can answer both but certainly not going to talk about the financial details with Dish. Dish has always been a maverick doing something’s first, to the degree that they enjoy great success like Virgin in the UK with the platform and it helps the Hopper get more popular because it is also an internet platform. I don’t think it is likely that Dish’s competitors would want to call off that benefit and integrate with us. But right now, everyone is in a watch-and-see, let’s see how Dish succeeds with the Hopper hardware which is what has Netflix and that is independent of Sling TV so those are two different things.
