While it will have original content, Apple’s service will most likely initially focus on third-party content, competing against Amazon Channels with la carte subscriptions to third-party channels (Amazon’s lineup includes HBO, Showtime, Cinemax, Starz, but not Netflix, which prefers to control its own in-app experience).
Asked how Netflix will compete against rivals with a lot of money like Amazon and Apple, Hastings said “with difficulty,” adding that “it is definitely getting more expensive to source content” as the streaming video market becomes increasingly fragmented.
As the largest video streaming service in the United States, however, Netflix has been the subject of antitrust lawsuits and debates. When asked about potential antitrust regulations aimed at large tech companies, Hastings describe Netflix as “really mostly a content company powered by tech,” saying it spends much more on content than tech (Netflix’s chief content officer Ted Sarandos said last year that 85 percent of its total spending goes to new shows and movies, and in October the company announced plans to raise $2 billion in debt to fund new content).
Despite its focus on international growth, Hastings also said that even though Netflix once considered entering China by creating a joint venture with a local partner, it currently has no plans to do so, noting that the strategy still didn’t help competitors such as Apple’s iTunes.
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