WHEN: Today, Tuesday, October 25th
WHERE: CNBC's Business Day programming
Following are excerpts from the unofficial transcript of a CNBC interview with Netflix CEO Reed Hastings. Excerpts of the interview will air today, Tuesday, October 25th, throughout CNBC's Business Day programming. Following is a link to the story on CNBC.com: http://www.cnbc.com/2016/10/25/netflix-ceo-reed-hastings-talks-content-costs-competition.html. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000562262
All references must be sourced to CNBC.
HASTINGS ON AT&T/TIME WARNER DEAL AND HBO
BOORSTIN: WHAT DOES AT&T'S ACQUISITION OF TIME WARNER MEAN FOR NETFLIX?
HASTINGS: IT'S HARD TO TELL. IT'S VERY EARLY. WE DIDN'T KNOW ANYTHING ABOUT IT, SO WE'RE JUST SORTING THROUGH IT. FOR SURE WE WANT TO MAKE IT SO THAT WE WANT TO REQUIRE THAT FOR AT&T CUSTOMERS THAT HBO AND NETFLIX ARE TREATED THE SAME. NOW THAT THEY ARE GOING TO OWN HBO, WE THINK ANY SPECIAL TREATMENT FOR HBO DATA WOULD BE INAPPROPRIATE. BUT I THINK THAT'S PRETTY BASIC.
HASTINGS ON REGULATORS
BOORSTIN: ARE THERE ANY OTHER REQUIREMENTS, CONDITIONS THAT YOU'D ADVOCATE FOR WITH REGULATORS?
HASTINGS: IT MIGHT BE OVER TIME, BUT AGAIN, WE'RE JUST STARTING TO LOOK. IT IS SORT OF FOUR DAYS OLD IN THE NEWS. SO, WE'LL GIVE IT A COUPLE OF MONTHS AND SORT THROUGH IT.
HASTINGS ON COMPETITION
BOORSTIN: BUT IS THIS GOING TO BE A NEGATIVE FOR NETFLIX IN TERMS OF MORE COMPETITION – AT&T HAVING MORE AMMUNITION FOR ITS OVER THE TOP SERVICES?
HASTINGS: COULD BE A LOT OF THAT. HAS A LOT OF AT&T INVESTMENT IN CONTENT. THAT COULD MAKE THINGS TOUGHER. ON THE OTHER HAND, IT'S PROBABLY GOING TO GET EASIER FOR US TO RECRUIT TIME WARNER EXECUTIVES, WHICH ARE A VERY TALENTED BUNCH. SO, YOU KNOW, YOU'VE GOT SOME PUTS AND CALLS.
HASTINGS ON SELLING TO APPLE
BOORSTIN: YOU'VE BEEN THE SUBJECT OF SOME M&A SPECULATION YOURSELF. AT WHAT PRICE WOULD YOU SELL NETFLIX TO APPLE?
HASTINGS: OH, THAT'S A QUESTION I WOULDN'T WANT TO SPECULATE ON.
HASTINGS ON AT&T AND TIME WARNER DEAL
BOORSTIN: BUT DO YOU THINK THAT THERE'S SOMETHING GOING ON RIGHT NOW IN TERMS OF TECHNOLOGY COMPANIES' INTERESTS IN MEDIA ASSETS? THAT IF THERE WERE INTEREST RIGHT NOW, THAT YOU'D HAVE TO TAKE A DEAL?
HASTINGS: I DON'T REALLY SEE A LOT OF THAT HAPPENING. BUT YOU CAN NEVER KNOW. WE HAVE BEEN PUBLIC FOR 14 YEARS. OUR STOCK IS UP ALMOST 100 FOLD IN THAT 14 YEARS. SO WE HAVE DONE PRETTY WELL FOR SHAREHOLDERS AND WE'RE PRETTY INVESTED IN TRYING TO KEEP THAT GOING.
HASTINGS ON DISNEY
BOORSTIN: WHAT ABOUT DISNEY? THERE'S BEEN SOME SPECULATION THAT NETFLIX WOULD BE A PERFECT FIT FOR WHAT DISNEY IS TRYING TO DO RIGHT NOW.
HASTINGS: THERE HAS, BUT ALL WE DO IS FOCUS ON HOW WE DO GREAT SHOWS, HOW WE GROW OUR BUSINESS. AGAIN, THAT'S WHAT MADE US SUCCESSFUL FOR THE LAST 14 YEARS. WE HAVE DONE NO M&A, WE STAYED OUT OF ALL THESE DISCUSSIONS, WE DON'T DO BANKERS MEETINGS. WE'RE VERY OLD SCHOOL IN THAT WAY. LET'S JUST BUILD THE GREATEST SERVICE ON EARTH. AND AGAIN, IT HAS DONE VERY WELL FOR OUR SHAREHOLDERS.
HASTINGS ON COMPETING WITH AMAZON
BOORSTIN: IN TERMS OF COMPETITION, ON THE CALL WITH ANALYSTS, YOU SAID REPEATEDLY THAT YOU'RE NOT CONCERNED ABOUT AMAZON. THERE WERE A NUMBER OF SPECIFIC QUESTIONS ABOUT AMAZON. YOU SAY YOU'RE NOT CONCERNED ABOUT AMAZON, BUT THERE IS NO DOUBT THAT AMAZON IS SPENDING A LOT OF MONEY ON CONTENT. AREN'T THEY EVEN JUST DRIVING UP YOUR CONTENT COSTS BY COMPETING WITH YOU FOR SHOWS?
HASTINGS: SO WE COMPETE WITH FX, WITH AMC, WITH HBO, WITH SO MANY NETWORKS – EVEN WITH THE BROADCAST NETWORKS FOR NEW SHOWS. AND AMAZON IS ONE OF THOSE BIDDERS, THEY'RE NOT EVEN THE BIGGEST OF THOSE BIDDERS. SO, IT'S ONE MORE BIDDER. AND THEY'RE DOING SOME GREAT WORK. THERE'S SOME OTHER SHOWS THAT ARE STILL WORKING OUT, BUT WE CAN'T GET OBSESSED ABOUT ANY ONE COMPANY.
HASTINGS ON HULU
BOORSTIN: WHAT ABOUT HULU? NOW THAT HULU IS OWNED PARTIALLY BY TIME WARNER, NOW THAT HULU IS WORKING ON ITS OWN DIRECT TO CONSUMER STREAMING SERVICE, WHAT KIND OF THREAT DO THEY POSE?
HASTINGS: YOU KNOW, IF THEY DO GREAT SHOWS, PEOPLE WILL WATCH THEM. AND I THINK THEY KNOW THAT. THEY'RE STARTING TO DO MORE AND MORE ON THE ORIGINALS SIDE. AND AGAIN, THAT'S ONE MORE CHANNEL.
HASTINGS ON CONTENT SPEND
WELL, I THINK EVERYBODY LOOKS AT A BUSINESS LIKE OURS AND SAYS, "ARE THEY GOING TO BE ABLE TO FINANCE ALL THOSE GREAT INVESTMENTS?" BUT WE HAVE A MARKET CAP OVER 50 BILLION AND 3 OR 4 BILLION OF DEBT. SO, IT'S LIKE HAVING A MILLON DOLLAR HOUSE AND HAVING $50,000 OF DEBT ON IT. IT'S REALLY NOT THAT SCARY ON A MILLION DOLLAR HOUSE.
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