Highlights from Netflix’s Q3 Earnings Hangout

/ Oct 21, 2013

Netflix Netflix

Netflix Q3 earnings report hit the web today, and shockingly (I’m deploying sarcasm here), the streaming service’s execs still aren’t talking about individual numbers — especially those surrounding original series.

In the earnings report, CEO Reed Hastings wrote that original series “Orange is the New Black” is Netflix’s most-watched series ever. The earnings report also stated that the series brought in viewership numbers comparable to those shared by successful cable shows. However, when asked about whether or not “Orange is the New Black” is in large part responsible for Netflix’s Q3 success during a live earnings interview today, Hastings stated that the company has no way of determining how large of a role the show played.

“It definitely helped, we are thrilled about it. But there is no clean analysis.” Hastings said about the audience-generating power of “Orange is the New Black.”

Here are a few more things that came up during the Q3 interview that proved to be interesting:

– The launch of Google Chromecast was not a major boon for Netflix at this stage. According to Hastings, early adopters of Chromecast are already tech enthusiasts, thus leading him to believe that they would also be Netflix subscribers. The company looks forward to seeing growth down the road.

– Hastings believes that both technology and original content bring in new subscribers equally. No branch of Netflix is above the other, according to the CEO. Hastings explained it as,“a plane with two engines, you want both engines working as fast as you can.” In addition to tech and “incredible content,” Hastings also mentioned that an increased advertising effort was equally responsible for Netflix’s Q3 growth.

– Chief content officer Ted Sarandos remained relatively cagey about upcoming original series throughout the interview. However, Sarandos explained that as content improves, Netflix will continue to invest in it. Sarandos mentioned that Netflix is the first or second stop producers and writers make when pitching a new project. Sarandos explained that Netflix wants to move on from being a place to watch original content to being the place to watch content.

– Netflix has a remarkable completion rate when it comes to its original programming. Sarandos explained that Netflix sees a steady growth of viewers as they initially binge then settle into a more comfortable rate of vieweing. Sarandos said that in terms of Netflix originals, series like “House of Cards” and “Orange is the New Black” have a more favorable completion rate than than those on cable.

– Netflix is expecting a solid bump in viewership as season two of “House of Cards” rolls around. According to Hastings, the launch for season two will most likely lead to a surge in new viewers looking to catch up on season one.

– Sci-fi original series “Sense8” is slotted to land on Netflix in 2014. However, that could change according to Sarandos.

– Netflix is open to experiment with releasing multiple seasons of an original series at once. The company does worry about sacrificing quality over speediness, however.

– When asked if Netflix is looking into launching original films, Sarandos explained that they are working on several documentary projects. In terms of Hollywood-style films, Sarandos leaned more towards shortening the time between a film’s theatrical release date and the time it appears on Netflix.

– Netflix does not see Hulu and Amazon as its only competitor. Hastings explained that Netflix was also competing against cable, the video game industry, and regular web browsing. He does not see one as being a bigger threat than the other.

– Mobile vieweing (non Wi-Fi) makes up a very small percentage of Netflix’s viewership. Hastings chalked this up to consumers’ data limitations. However, in-home viewing is a huge boon for Netflix as people can be connected to Wi-Fi.

– Perhaps most important of all, it was announced that the final season of “Breaking Bad” will air on Netflix after the show’s DVD cycle starts. Netflix is aiming towards “the next couple of months.”

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