Netflix not threatened by Hulu, Disney: Barry Diller
IAC Chairman Barry Diller said it’s unwise for other streaming companies to try to compete with Netflix.
“Netflix was another kind of accident which is all of the incumbents, all the movie companies, television companies all sold their product to Netflix, built Netflix and now are at the mercy of Netflix,” Diller said during an exclusive interview with FOX Business’ Maria Bartiromo on Friday.
Netflix, which was founded in 1997 by Reed Hastings and Marc Randolph, is the streaming leader, with 130 million paid memberships in over 190 countries.
Netflix posted strong third-quarter earnings, crushing revenue and subscriber targets with more than 6 million new subscribers. The company also projects it will add another 9.4 million net subscribers next quarter.
Diller said subscribers give it a big advantage over competitors.
“Its closest competitor has less than half,” he said. “The idea that you can compete head to head with Netflix, I think it’s a fool’s day.”
But companies like Disney and Hulu continue to pour cash into content.
And with that comes downside risk for these companies.
“The danger is, they are spending more money right now than will sustain them in terms of net profits today. They're all deficit spending,” he said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NFLX | NETFLIX INC. | 612.09 | +2.62 | +0.43% |
| DIS | THE WALT DISNEY CO. | 105.80 | +0.36 | +0.34% |
Likewise, Netflix will also spend billions on new content for its original series and movies. In Diller’s opinion this will be the endgame for competitors.
“Netflix doesn't make any money, but it is pouring money in to get up from 130 to 250 million subscribers, in which case, the game is basically already called, but it will be truly called,” he said.
“Hulu doesn't make money, it's invested, it loses a billion or whatever it loses a year investing for the future,” he added.
“Now if you’ve got all these people over-deficiting to build a business for tomorrow… let’s call it, four chairs in the musical chair thing and there are 10 chairs – 10 people running around the circle, this can be a lot of destruction.”
