Netflix CEO Reed Hastings told attendees at the UBS Global Media and Communications Conference in New York that streaming video will grow to replace cable as the viewing option of choice within 3-5 years. In reality, streaming video could leapfrog ahead of cable even sooner than that, but as Netflix gets ready to renew contracts with Hollywood studios, he might want to keep his cards closer to his chest.
Studios still prefer cable, where they have more control over their content. Starz, you might recall, opted not to renew its contract with Netflix, a decision that was reportedly made because Netflix refused to charge subscribers a premium for access to Starz content. Studios want the consumer to expect premium channels and content to cost more, and Netflix's all-you-can-consume media buffet threatens that mindset.
Regardless, studios will only be able to fight the transition to streaming for so long, and despite some recent bumps in the road, Netflix intends to not only ride the wave, but create them.
"We have got to get as big as we can before the rest of the world catches up," Hastings said, according to an AP report .
Netflix isn't alone, and Hastings identified one competitor in particular that keeps him up at nights.
"The competitor we fear the most... is HBO Go," Hastings said. "The two of us will compete for a very long time."
Both Netflix and HBO Go are spending billions of dollars on content every year, putting them a league of their own. Verizon could emerge as another competitor, but at this early stage, the chatter didn't elicit so much as a casual shout out by Hastings.