Netflix co-CEO Reed Hastings believes that linear TV will die out in the next decade.
“Streaming is working everywhere. Everyone is pouring in,” Hastings said on the media giant’s second-quarter earnings call on Tuesday. “It’s definitely the end of linear TV in the next five, 10 years.”
After the maker of “Stranger Things” reported a loss of 970,000 subscribers in the second quarter, the estimate was two million less than the company’s guidance. In the first quarter, the streamer lost 200,000 subscribers — its first decline in a decade.
“We’re improving everything we do around marketing, improving service, merchandising, and it all benefits,” Hastings added. “But again, we’re talking about losing a million instead of losing two million. So the less bad results dampen our spirits.”
Netflix said in its shareholder letter that the company generated more TV viewing time than any other outlet during the 2021-2022 TV season, nearly matching CBS and NBC, the two most-watched broadcast networks. Netflix’s share of total US TV viewing reached an all-time high of 7.7% in June.
In the near term, the company said it is focused on re-accelerating revenue and customer growth. Netlfix will introduce a cheaper, ad-supported subscription tier in partnership with Microsoft in early 2023.
“Over time, we hope to create a linear-TV advertising model that is more seamless and relevant for consumers and more effective for our advertising partners,” Neflix said. “Although it will take some time for our subscriber base to increase to the advertising tier and associated ad revenue, we believe that advertising can lead to significant incremental subscriptions (through lower prices) and increased profits (through advertising revenue).”