THE CONVERSATION: REED HASTINGS ON THE FUTURE OF MOVIES

Photo courtesy of JD Lasica

Moderator:

Tiffany Shlain, Filmmaker, The Tribe and Connected

Interviewee:

Reed Hastings, CEO & Founder, Netflix

Notes:

1.9 million discs are processed everyday
Netflix expects to still be shipping DVDs in 20 years, they’ll be around like CDs are still around now just less demand and different audience
Physical DVD sales will be flat for the next two years then dovetail within a decade
Using a lower value per use basis, more efficiency, hasn’t improved the business
The subscription format makes audiences more adventurous – first two months of a new customer they choose films out of the top 100 then begin to pick outside the box
Getting harder to predict what people like – although film taste doesn’t change much over the years
Demand generation is key and still very hard to do, this is why the recommendation system is key
Jokingly: there are no bad films, there are just films that are great for only a few people!
Regarding the closing of their film distribution arm Red Envelope Entertainment: fixed costs added up – well intentioned, well executed, but they “didn’t crack the nut”
Regarding the “Watch Now” option: customers by and large after watching first five minutes of a film will finish the film
Currently only microstudios provide access for indie films to get on to Netflix
Privacy issue of customers doesn’t allow for filmmakers to get demographic information – possibility of collecting ZIP code information though
CRASH is the #1 all-time rented movie on Netflix and continues to hold that spot
Netflix not interested in developing a separate social network, will develop apps for Facebook etc instead – go where everyone else is.
It’s clearly all about creating demand for Hastings – calls it the big unsolved problem