Comcast CEO: Netflix Is Good For Business
While Netflix's plethora of TV and movies on-demand threatens to steal consumers from cable providers offering premium content packages, one CEO claims he is not worried about Netflix's growing reach.
Brian Roberts, the chief executive of Comcast, told Fortune that Netflix has not yet shown any real negative impact for cable providers, and that in fact, for Comcast's broadband business, has proved a boon.
"We recognize that the business is changing and has changed, and we're well aware that there's new competition," Roberts said, saying that the "jury's out" on whether Netflix is a danger to cable companies. "So far, it's not having much effect...the pie is just getting bigger," he concluded.
Roberts says Netflix has actually improved business for Comcast's broadband division, considering that the service requires a great deal of broadband to function effectively.
"Netflix needs one of the strongest broadband connections you can get," he said. "We're seeing a surge in our broadband usage. We sold more broadband last year than we did the year before and yet it's a 10 year old product. We sold more broadband last year, every quarter than Verizon, AT&T, and Qwest combined."
On the question of whether Netflix will adversely affect Comcast and other cable providers' content business and cable subscriptions, Roberts seemed optimistic, saying that Netflix contained mainly "reruns," which could be leveraged to Comcast's benefit.
"Whether its business prospects are good or over-hyped . . . your guess is as good as mine. But they do a lot of things really well and they resonate with consumers, so there will be people who try and copy that," he said, calling Netflix "a window, seeming to get defined as what syndicated television used to be to broadcast."
Netflix CEO Reed Hastings has stated that he does not see his service as a true competitor to cable offerings, and instead, as a complement. Netflix does not offer television from shows that are currently on the air, and lacks cooperation from premium channels including HBO, which provides its own on-demand platform for online video.
But relations between Comcast and Netflix have been far from cozy. Last year, Level 3 Communications, an Internet backbone company that supports Netflix accused the carrier of imposing unfair tolls on its broadband use. Comcast had reportedly threatened to block access to the site unless Level 3 paid up.
And Comcast might have something to worry about: In April, Netflix overtook Comcast in subscriber count, with 23.6 million users to Comcast's 22.8 million. And a new study showed that at least 32 percent of current Netflix subscribers plan to ditch cable sometime soon.