Fresh off a series of comments about the semi-imminent demise of DVD as its primary format, Netflix CEO Reed Hastings has called the growing streaming video market “wildly competitive”. Hastings’ comments came this week at the Magazine Innovation Summit in New York. The summit brought together executives from the publishing world, another industry that has seen unprecedented upheaval and uncertainty in recent times.
In his keynote address, Hastings admitted that his company is in an “enviable position” compared to many magazine companies:
“’The fortunate thing for us is video stores are closing, meaning more people are renting online,’ Hastings said, pointing out that unlike, say, BusinessWeek, its competitors on the DVD side of the business are few and ‘fixed’: Blockbuster and Redbox.”
Streaming is a completely different story, Hastings said, stating that the market is becoming “wildly competitive”. Nevertheless, streaming remains extremely attractive to Netflix because of the enormous amount of money the company saves by not paying postage on digitally delivered films. Hastings revealed that his company will spend quite a bit on stamps next year: $600 million. This makes the U.S. Postal Service Netflix’s biggest vendor, “larger than any one studio,” according to Hastings. Another benefit to streaming is that it would be unaffected by any potential delivery schedule cutbacks by the USPS.
As competition heats up and Netflix and other content providers inch ever closer to streaming-dominated models, will you mourn the slow demise of physical media or welcome it?
[via The Wrap]