Netflix CEO Reed Hastings on Motley Fool Radio

The Motley Fool Radio Show on NPR has recorded an interview with Netflix CEO Reed Hastings.

Tidbits from the show:

Hastings says that Netflix has more than 250,000 copies of the Oscar winner Crash.

Netflix determines the number of copies of a movie to order using formulas similar to picking stocks. They have an incredible amount of data and can forecast how many copies to order based on the success of similar movies, among other factors.

Hastings on throttling: "I'm not sure what the term "throttling means, per se." He goes on to explain how they allocate movies based on customer usage if they have a limited number of copies.

He doesn't believe that video stores will disappear anytime soon, and notes that Blockbuster is about the size of Google.

Watching full-length movies on Netflix will be similar to watching a movie trailer.

The Netflix & TiVo partnership is on hold due to the lack of available releases from the studios

More than 500,000 copies of Born into Brothels have been rented through Netflix.

He notes that despite the success of music download sites, 90% of all music is still purchased on CD. He believes that DVD has a long way to go before downloading makes the DVD format obsolete.

Hastings on iTunes movie downloads: He watches Lost and Desperate Housewives on iTunes.

Comments

[Hoyt Pollard]

I'm not sure what this means:

"Watching full-length movies on Netflix will be similar to watching a movie trailer."

Please clarify. Thanks.

[mikek]

He just mentioned that watching a trailer will be similar to watching a full-length movie (I highly recommend you listen to it -- it's only about 20 minutes).

They're getting some experience with downloads, encoding, and handling the bandwidth demands by offering trailers.

Hopefully we'll be able to watch as many movies as we want each month. ;-)

- Mike

[RAYMOND KNIGHT]

Give me a break. Mr. Hastings doesn't know what the term "throttling" means. He knows exactly what it means and how NETFLIX engages in this practice. In other interviews, he has said that NETFLIX does not throttle. It is interesting since NETFLIX throttles both old and new movies.

[Rusty Ramrod]

"Hastings on throttling: "I'm not sure what the term "throttling means, per se." He goes on to explain how they allocate movies based on customer usage if they have a limited number of copies."

OMFG!!!!!

That almost caused me to have an aneurysm.

Even the staunchest NetFlix fanboy would have to admit Hastings is *very* aware of what true throttling is.

But then again, just like Swayse (or whatever his name is) Hastings tries to pump out misinformation, attempting to fool the uninformed into thinking that throttling means product allocation rather than the true meaning of artificially imposed rental limits, while they continue to merrily advertise the service as unlimited.

[NetflixShill]

"I'm not sure what the term throttling means, per se."

Let me explain, Reed. It means that you artificially delay admitting the receipt of movies and/or sending out new movies and/or sending from farther away than necessary, so as to limit customers to one movie per week per slot (e.g. 3 a week on a 3-out plan). When the customers should theoretically be able to get 2 or 3 shipments a week (6-9 on 3-out), assuming they watch and return immediately and get 1-day delivery.

[NetflixShill]

Netflix throttles everything - not just new releases and movies in short supply. Also, discs have a habit of changing from "Available Now" to "Short Wait" or "Long Wait" when you move them to the top of a heavy user's queue. So either you're lying about inventory or you're deliberately punishing heavy users. Maybe both. I'd like to hear a sound ethical justification for this dishonesty and fraud.

[CJ]

A few comments on Mr. Reed's points.

The Netflix "picking stock" approach to number of copies ordered must not work well since my detailed queue records going back to year 2000 clealy show that something in the last 2 years is holding up rental turn around times.

Of course video stores and the DVD "movie container" aren't going to disappear anytime soon. People still want "impulse renting" - hence the video store. There is nothing out there yet to replace the physical DVD "movie container" - thank you MPAA and your DRM paranoia, and thank you FCC for your regulations hindering Broadband infrastructure.

The lack of Broadband really guiles me - in Europe and Asia you can get real Broadband download speeds of 25 to 50 Mbps for $20 USD/month, while here in the USA you get 1.5 to 5 Mbps speeds for $45/month. Practical digital downloading of movies, i.e. Netflix/TIVO, is a long way off.

[scotty321]

Reed Hastings is an arrogant liar!! Yeah, right, he doesn't know what throttling means. Have you guys ever seen this guy talk? He is so arrogant and full-of-himself, and all he has is a bunch of irate customers.

[C Nyze]

As long as they keep providing a valuable service, I don't care how much he lies ... he's gotta make his money too. All is fair in love, war, and on-line DVD rentals.

[Dr. Cogent]

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Hastings on throttling: "I'm not sure what the term "throttling means, per se." He goes on to explain how they allocate movies based on customer usage if they have a limited number of copies.
***************************************

Oh give me an f'in break. What a tool.

[corey3rd]

let me get this right - this guy is trying to strike a deal with Tivo yet he's willing to pay $2 to watch an episode of Lost instead of recording it off TV?

Remember that like any great CEO, it's all about constructing walls of denial. Throttling is something done by a suit without his knowledge

[BoB]

Hastings has not heard of the Easter Bunny, The Tooth Fairy or Santa Claus either!

[Phdsvp]

He probably said it so he could go home, log on to this site, and watch all of the commenters with anger mangement issues go apoplectic. Reed Hastings: Super Genius.

[E. Craig Crawford]

per se

Function: adverb
Etymology: Latin
: by, of, or in itself or oneself or themselves : as such : INTRINSICALLY

Oh, you are a slick one, Reed. Thought you could stick in a "per se" at the end of your throttling comment, and you could get away with it. However, you know very well that we customers know what throttling is as it applies to your company's practice of slowing the delivery of movies to us.

If your company is going to restrict me to receiving only a certain number of movies a month, simply have the integrity to tell me so. Either log in a movie the day after I mail it to my local DC, and ship me ANY movie in my queue that same day, or tell me up front that I can expect only X number of movies shipped to my door in any given month.

[noe638]

Netflix really has done a masterful spin job of lumping in the delay of acknowledging receipt of movies and slowing down sending the next movie out for high volume renters, into how their allocation algorithm works. Brilliant public relations.

[E. Craig Crawford]

I'm guessing that these delays of logging movies back in are across the board. I'm on the 1 Out plan and I get throttled ...erm.. "per se."

[Doc Blase']

Hastings on throttling: "I'm not sure what the term "throttling means, per se."

Lying, scheming, nasty steaming sack of crap!

[CJ]

"Hastings on iTunes movie downloads: He watches Lost and Desperate Housewives on iTunes."

I used to think Reed Hastings was a cool guy - but I've really changed my opinion. I mean, itunes movie downloads? How neaderthal - small screen, no resolution, crappy sound. And "Lost", "Desperate..." - exactly why I don't bother watching Network TV. A cultural wasteland!

Reed should wake up, smell the coffee, and watch a few of the DVDs that made him his most recent millions...

[Nereid]

"I'm not sure what the term throttling means, per se."

The way he says that just kind of makes my eye twitch. Unless you're a complete moron who literally does not want to know the meaning of something, than you most definitely should have some kind of idea on what throttling can possibly mean, i mean just reading the word autamtically makes your brain generate an image of something, and even a definition.

The way he spoke that sentence sounds as if he were mocking us, which i probably would not doubt.

even if anyone pays service for anything, there's always no guarantee that you get 100% wonderful service, and all that.

My father's been in a war with our wireless phone company for about a year now... for being such cheaters, raising our bill every month for no reason, and unfortunately for us we can't even switch because other services work poorly or not at all in our area.

this unfortunately just means that wherever, or whatever you're doing has some kind of problem attached.