Reed Hastings: The 4K King
- 9 January 2014
- From the section Technology
In a suite in the same hotel where Prince Harry had his famous Las Vegas party, I met the man whose mission is to revolutionise television. Reed Hastings, the CEO of Netflix, has been chipping away at this task for 15 years since founding the company as an online movie rental service.
For long periods, it looked like it was going nowhere, and investors questioned its future. But now Netflix is on a roll, its shares have risen almost fourfold in a year and its CEO has been awarded a big pay rise. And the luxury suite where we met told the story of how perceptions of Netflix have changed.
It was furnished with what appeared to be framed family photographs - actually stars of some of Netflix own productions, including Kevin Spacey in House of Cards. This expensive, ambitious series was a gamble that paid off, attracting millions of new subscribers around the world.
Until then, Netflix had been dependent completely on bought-in content, which came with lots of restrictions. That, says Hastings, meant painful negotiations with Hollywood and TV producers - "they'd say we want $10m for this show, we'd offer $1m" - and lots more aggravation once a price had been agreed.
"We realised with each country that we had different licensing issues, different release dates," he explains. "It made no sense - the only way to fix it was to do our own shows then they're available to everyone at the same time."
That's a revolutionary move - and one that speaks to the frustrations of anyone who has wanted to get hold of latest episodes of popular new shows without resorting to illegal downloading.
Around the hotel suite, different screens showed the various ways you can now get access to the Netflix platform, but pride of place went to a Sony 4K television showing a trailer for the second series of House of Cards. At CES, Hastings took to the stage with Sony's Kazuo Hirai to announce that the series would be filmed in the new ultra-high definition format.
He says 4K is a big opportunity for Netflix and for internet television in general. "It will be the first format that is internet only - broadcast, cable, satellite they're not going to have ultra HD at least in the next five years," he says.
So, if you want to see every bead of sweat on Kevin Spacey's forehead as he plots his way across Washington, you'll need to splash out on a new television and a Netflix subscription. This makes Hastings an even more powerful figure in an industry which will have to work hard to persuade consumers to move to the new format.
But shooting in 4K won't come cheap, meaning Netflix investors will have to wait even longer to see their company make decent money. Hastings seems to be following the same line as other internet firms, notably Amazon, in worrying far more about growth than profits. "We're similar to Amazon," he admitted to me. "We focus on growth."
The internet revolution has been much slower to change TV viewing habits than many - including Hastings - predicted in the late 1990s. But now that change is coming - and like Amazon in online retailing, it is Netflix which looks best placed to profit in an on demand world.