June 22nd, 2009

We’ve been talking about Netflix’s sure move to the Web for a long time now. In our presentations, we show how Netflix DVDs that today mostly arrive in the U.S. mail, if sent in high-def (HD) over the Net, would total almost eight exabytes per year. That’s almost half of all U.S. Internet traffic in 2008.

Well, here’s CEO Reed Hastings in Tuesday’s Wall Street Journal:

Netflix Inc. is a standout in the recession. The DVD-rental company added more subscribers than ever during the first three months of the year. Its stock has more than doubled since October.

But Netflix’s chief executive officer, Reed Hastings, thinks his core business is doomed. As soon as four years from now, he predicts, the business that generates most of Netflix’s revenue today will begin to decline, as DVDs delivered by mail steadily lose ground to movies sent straight over the Internet. So Mr. Hastings, who co-founded the company, is quickly trying to shift Netflix’s business — seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets.

His position offers a rare look at how a CEO manages a still-hot business as its time runs out. “Almost no companies succeed at what we’re doing,” he says.

Tags: Exaflood, netflix, Web video

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