Netflix CEO Reed Hastings says that he sees an "arms race" in the streaming entertainment sector that his company currently dominates, and the biggest competition they face is Time Warner's HBO Go.
"The competitor we fear most is HBO Go,” Hastings said this week at the UBS media conference in New York. "HBO is becoming more Netflix-like and we’re becoming more HBO-like. The two of us will compete for a very long time."
While Hastings may fear HBO GO, he doesn't seem to be too scared of services from Verizon and amazon.com, who he says will have to spend $1 – 2 billion a year on content licensing deals to be any kind of threat. He also adds that services like these will first need to get on various devices like Internet-ready TV's Xbox 360, PS3, Roku, Wii, 3DS, and more.
Half of home-video viewing will come through the Internet as soon as 2016, according to Hastings.
“The industry is very motivated around this concept of smart TVs,” Hastings said.
But Netflix has bigger problems than HBO GO in the short-term; after announcing pricing changes and talking about making drastic changes to its disc-based service earlier this year, customers decided to bail. The company lost 800,000 subscribers in the US during the third quarter. Hastings would not comment on fourth-quarter subscriber numbers, but predicted gains in 2012.
"We are very optimistic that we can put up very substantial growth next year," Hastings said.
On a side note, perhaps Netflix shouldn't worry too much about HBO GO in the short term – many of Time Warner Cable's own customers don't have access to it yet… but they do have access to Netflix.