Netflix's CEO says he isn't worried about streaming competition - but traditional TV and YouTube could be threats
- Netflix's Reed Hastings said traditional TV and YouTube are the largest competitors in viewing time.
- The company downplayed competition in the streaming market when it reported Q1 earnings.
- Netflix missed its Q1 subscriber growth target and said it did not believe it was because of rivals.
Netflix CEO Reed Hastings said the company isn't seeing much of a threat from streaming rivals - but in terms of viewing time, traditional TV and YouTube are its largest competitors.
Hastings made the comment during the streaming giant's first-quarter earnings call with investors, in which Hastings downplayed the threat that rivals like Disney pose to Netflix.
"Our largest competitor for TV viewing time is linear TV," he said, referring to traditional scheduled television programming. "Our second largest is YouTube, which is considerably larger than Netflix in viewing time. And Disney is considerably smaller - we're sort of in the middle of the pack."
Hastings also said that "there's no real change that we can detect in the competitive environment."
The streaming market saw a boom in 2020 as people were driven into their homes and turned to entertainment online. Netflix, long the power-player in the industry, saw increased competition from Disney Plus, HBO Max, Amazon's Prime Video, and others.
In its Tuesday shareholder letter, Netflix said it did not believe that competing streaming platforms played a role in the company's Q1 results. Netflix said it added 4 million new paid memberships in the first quarter, compared to analyst estimates of 6 million.
That dip in membership growth, Netflix said, is in part due to the COVID-19 pandemic and the "lighter content slate in the first half of this year" because of social distancing-driven production delays. Original Netflix programs specifically have fallen by 20% since this time last year.
But Netflix said in its shareholder letter on Tuesday that it expects paid membership growth to "re-accelerate" in the second half of 2021 "with the return of new seasons of some of our biggest hits and an exciting film lineup," including "a large number of returning franchises." It said it will spend over $17 billion on content this year as long as vaccine distribution continues to be successful and production can return to normal.