Netflix CEO: Sorry, we're not making a streaming device

Reed Hastings says Netflix has no interest in making its own video-streaming device like Amazon's Fire TV, nor will it pour money into licensing live sports.

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Netflix CEO Reed Hastings Screenshot by Joan E. Solsman/CNET

If you're a Netflix superfan, Chief Executive Reed Hastings may have just burst a couple of your bubbles: dreams of a Netflix-made streaming-media box and live sports.

In a Q&A session at the Recode technology conference in Palos Verdes, Calif., Hastings said Thursday his subscription-streaming-video company has no interest in making a device, and it doesn't have the time, energy or money to buy the rights to live sports content.

Competitor Amazon launched a media-streaming device, Kindle Fire TV, earlier this year. The e-commerce giant competes with Netflix with its Prime Instant Video streaming service, which is part of its $99-a-year Prime membership program best known for free two-day shipping on qualifying Amazon purchases. However, Amazon has long been part of the consumer-electronics game, with its ubiquitous Kindle e-readers and Kindle Fire tablets.

Netflix, as superfans may recall, once had a hand in developing a streaming box. Roku founder Anthony Wood once worked at Netflix as its vice president of Internet TV, helping on a project to deliver movies directly to subscribers' televisions over the Internet. But Netflix later jettisoned the project to Wood's own company Roku, which eventually released the streaming boxes many use today to watch Netflix in their living rooms.

"We're working with over 1,000 devices now," he said. "There's no value-add for us to do a device."

A more drastic departure for Netflix would be a foray into live sports. The company has focused entirely on libraries of legacy video content, first with DVDs, then with streaming movies and past-season television, and lately with fresh original television developed by Netflix itself like "House of Cards." Sports programming is a realm that traditional television has continued to keep in its grasp, as its live nature makes it difficult to deliver through a streaming service reliably en masse. And the most popular live sports typically fetch top-dollar advertising rates, which in turn makes the content some of the most expensive to license from rights holders like pro leagues.

Netflix expanding its scope to include live sports would quickly turn the service into a much closer approximation of a pay-TV replacement -- but thus far Netflix has focused more on being more like an online TV channel than an online TV distributor along the lines of Comcast or DirecTV.

According to Hastings, that's not likely to change.

"Live in general isn't a big area for us," he said. "But it's just beginning."

Hastings also discussed a high-profile quarrel with Comcast over interconnection -- a way content providers like Netflix can link up their systems to Internet service providers to ensure better reliability. He called it a matter of principle, and said the declining performance of Netflix to Comcast's customers meant Netflix "had to take a deal."

"If they charge the Internet a little bit now, as they grow, they're going to charge more and more and more. It's getting ahead of that principle," he said. Similarly, consumers who use more broadband shouldn't have to pay more than anyone else, he said, just as people who listen to radio constantly don't have extra payments.

Wednesday, Comcast Chief Executive Brian Roberts spoke at the Code conference as well, saying Netflix simply would like to pay nothing, but everyone has to pay something to get to the Internet.

Netflix shares were recently up $12.90, or 3.2 percent, at $414.09. The stock has been climbing steadily through the day.

Update, 11:48 a.m. PT: With further details from conference.

 

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