The Cable Show

Netflix: OK, Maybe We're Cannibalizing Something

But It Might Not Be TV, Chief Content Officer Ted Sarandos Says

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Netflix, which has been very vocal in positioning itself as a complementary service to cable, may be starting to change its tune.

Ted Sarandos, chief content officer at Netflix
Ted Sarandos, chief content officer at Netflix

Sitting on the same panel at The Cable Show in Boston on Wednesday as top executives from Time Warner , Cox Communications and News Corp., Netflix Chief Content Officer Ted Sarandos finally admitted the streaming-video provider could result in some form of cannibalization.

CNN host Piers Morgan asked Mr. Sarandos whether Netflix is more like Mother Teresa, who gives to all, or Hannibal "The Cannibal" Lecter.

"We have billions of hours of viewing, so we are going to take away from something," Mr. Sarandos said. But he stopped short of saying that something would necessarily be linear TV. "It could be another activity," he said.

"I don't think there's a black or white answer to what role we play in the industry," he added. Depending on the content, Netflix can be a little bit of both, he said.

On the question of Nickelodeon's ratings plunge this season, which many people have blamed on Netflix, Mr. Sarandos said a scientific answer was hard to find and argued that Netflix had boosted ratings for new episodes of AMC's "Mad Men" by letting non-viewers catch up.

At times Netflix has been considered as a content provider along the lines of a cable or satellite distributor, but it has increasingly moved into content creation as well.

Netflix decided to start making its own series because it couldn't get "premium" programming from HBO, Starz and Showtime, Mr. Sarandos said.

As for how the rest of the industry views Netflix, Cox Communications President Patrick Esser called Mr. Sarandos a "frenemy."

Mr. Esser also said that while Netflix may migrate viewers away from some programming, it is also a catalyst for the adoption of high-speed internet -- a growth business for cable providers. In March, 40% of Cox's customers were using their online service to stream Netflix content, he noted.

Netflix and other streaming-video options have served to increase the overall use of TV, Time Warner CEO Jeff Bewkes said, saying fears of cord-cutting had subsided.

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