Netflix Faces Life in the Mainstream

Netflix's Chief Executive Reed Hastings said that the recent “phenomena” of channels becoming apps, easily watched across an array of devices, has validated Netflix’s “fundamental thesis.” While that means more competition for Netflix, he said, Internet TV becoming mainstream is a welcome trend. But as networks such as HBO, CBS and Viacom ’s Nickelodeon begin offering programming directly to customers via the Internet and distributors such as Dish Network launch online-streaming TV services, Netflix’s place in the puzzle of TV’s future looks a bit murkier.

There is a risk that the burgeoning streaming-TV sector could end up eclipsing Netflix. The company is moving aggressively already to avoid that fate. To maintain its share of attention and wallets, not to mention achieve pricing power, Netflix needs distinctive content that can’t be found elsewhere. Hence its decision to release 320 hours of original programming in 2015, triple 2014’s total. Netflix also said it plans to keep increasing the percentage of its content spending, roughly $3 billion in 2015, dedicated to original material.