Netflix CEO Hastings Gives Qualified Support for AT&T, Time Warner -- Update

By Deepa Seetharaman 

Netflix Inc. Chief Executive Reed Hastings offered his qualified support of AT&T Inc.'s $85.4 billion deal to buy Time Warner Inc. -- as long as the deal doesn't give an "unfair advantage" to Time Warner's networks.

Mr. Hastings said he would back the deal "as long as HBO's bits and Netflix's bits are treated the same," he said Monday, speaking at the WSJDLive conference in Laguna Beach, Calif.

"The key thing is whether there is going to be net neutrality, which hasn't been AT&T's favorite topic," he said. "If they got there...then good things might happen."

The AT&T deal with Time Warner, reached this weekend, faces a tough political and antitrust climate. It would combine the carrier's millions of wireless and pay-television subscribers with Time Warner's media lineup, which includes networks such as CNN, TNT, and HBO and Warner Bros.' film and TV studio.

By comparison, Netflix is a small player, but Mr. Hastings looks to other Silicon Valley giants as his benchmark. With 87 million world-wide subscribers, Netflix has a long way to go to reach the billion-plus audiences on Facebook Inc. and Alphabet Inc.'s YouTube, Mr. Hastings said.

Mr. Hastings, who sits on Facebook's board of directors, said the breakdown of Netflix's subscribers should be similar to Facebook, which has more than 80% of its users outside North America.

"That should be us," he said. Netflix has rolled out its service to dozens of countries in recent months, but less than half of its subscribers are outside the U.S.

Mr. Hastings said Netflix would focus on entertainment and would stay away from news and sports. But he said he could envision a day when movies and TV shows would fall out of vogue -- "like opera" -- in favor of entertainment consumed on Facebook and Snap Inc.'s disappearing chat app Snapchat, virtual reality and augmented reality.

"In the long run, there will be substitutes," Mr. Hastings said. "The ultimate challenge for us is: What is that new form of content? Is it VR, AR? Is it pharmacological?" he joked.

Write to Deepa Seetharaman at [e-mail]

(END) Dow Jones Newswires

October 24, 2016 23:50 ET (03:50 GMT)

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