For Netflix CEO, Change Is Just A Channel Thing

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Netflix mailers on a conveyor i

DVD-rental giant Netflix has worked to automate major portions of its shipping operations ... hide caption

itoggle caption
Netflix mailers on a conveyor

DVD-rental giant Netflix has worked to automate major portions of its shipping operations ...

A Netflix shipping center i

... but the company's core rent-by-mail business still requires a substantial staff. Photos courtesy Netflix hide caption

itoggle caption Photos courtesy Netflix
A Netflix shipping center

... but the company's core rent-by-mail business still requires a substantial staff.

Photos courtesy Netflix

For years now, those little red envelopes have been ubiquitous in America's mailboxes — as ubiquitous as the phrase, "It's in my Netflix queue."

But when you think about it, that movies-by-mail business sounds almost old-fashioned: In a digital age, it's movie rentals at the speed of a telegram.

Netflix CEO Reed Hastings acknowledges that from an operational perspective, he is juggling several balls at once. Hastings tells NPR's Ari Shapiro that even as the company expands its DVD-shipping business, it's also focusing on streaming movies — "making it very simple just to click and watch," whether on computers, through TiVos and other set-top boxes, or even straight to some newer TVs.

Instant Gratification On Movie Night, But Only If You're Lucky

If you're a Netflix customer, you know how annoying it can be when you impulsively decide you want to stay in and watch a movie — but the movie you suddenly feel like seeing is at the bottom of your Netflix queue. (Or worse, all you have on hand is Episode 6 of In Treatment.) Netflix does have that "Watch Instantly" option that you can click on when you haven't planned ahead — but it's not always able to serve up the movies you actually want to see.

Why can't we watch more titles instantly? Hastings explains that legally, streaming isn't like rent-by-mail. All Netflix has to do to rent you a movie is buy a copy of it — from the studio, from a distributor, even from Walmart or Costco. Once the company owns the disc, it can rent it out.

But for every single movie or TV show you want to stream from Netflix, a deal has to be negotiated. Movie studios like Paramount, television networks like A&E, Biography or TNT — they own the rights to each thing you want to watch, and "we have to do an individual deal with that content producer for that piece of content," Hastings says.

A Future Without That Red Mailer, Maybe — But Not Without Theaters

A TiVo box with a TV showing Netflix i

The company's video-streaming strategy embraces options including Netflix-ready boxes from TiVo (pictured), Roku and Microsoft; streaming-enabled DVD players from Samsung and others, and browser-based options for PCs and Macs. The newest options: stand-alone TVs that can access the service with built-in WiFi. Netflix hide caption

itoggle caption Netflix
A TiVo box with a TV showing Netflix

The company's video-streaming strategy embraces options including Netflix-ready boxes from TiVo (pictured), Roku and Microsoft; streaming-enabled DVD players from Samsung and others, and browser-based options for PCs and Macs. The newest options: stand-alone TVs that can access the service with built-in WiFi.

Netflix

As Netflix gets more subscribers, Hastings says, the company will have more capital to make the deals that enable you to watch instantly. The funny thing about that is, that's what's going to put an end to those little red envelopes.

"I think that we're on a trajectory over probably 10 years to have nearly everything on streaming," Hastings says. "Not just Netflix, but other firms also — and also, to have WiFi built into every television over 10 years."

Hastings is especially focused on the streaming-to-television option, at least for the present. And what about streaming to mobile phones?

"It's definitely in the pipeline, but not in the short term," he says.

Given all the change he has helped bring to the delivery pipeline, how does the king of movie rentals prefer to see a movie himself?

"I'm still biased," Hastings says. "There's nothing like going to the theater, especially for comedies, [with] the whole audience laughing."

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