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Netflix co-founder Marc Randolph: 'Focus' will help it beat Apple, Disney

Alexandra Canal

The streaming wars are just getting started.

With NBCUniversal (CMCSA) unveiling the official name of its streaming service, WarnerMedia’s HBO Max (T) landing a mega deal for “The Big Bang Theory” and Apple TV+ (AAPL) and Disney+ (DIS) gearing up for November launches, it might look like the established players are losing steam.

But one former executive is still betting big on Netflix (NFLX), despite the increased competition.

“I don’t look at ‘strongest players’ based on content, I look at ‘strongest players’ based on focus,” Netflix co-founder Marc Randolph told Yahoo Finance during a recent interview.

Marc Randolph & Reed Hastings celebrating Netflix's IPO in 2002 (Courtesy: Marc Randolph)
Marc Randolph & Reed Hastings celebrating Netflix's IPO in 2002 (Courtesy: Marc Randolph)

Randolph, who led the company in its early years, outlined critical ingredients for entrepreneurial success in his new book “That Will Never Work” and said “the number one [ingredient] is focus.”

He added: “Look at Netflix — the only thing they do is what they’re doing. Disney of course has a range of business, [so does] Apple. I think the thing you’ve got to worry is when Netflix either launches a theme park or brings out a telephone.”

‘Not like cable’

Netflix recently increased the prices on its basic, standard, and premium plans. After the biggest fee hike in the company’s history, the platform’s offerings now cost between $9 and $16 per month.

Yet Apple made waves last week when it revealed its ultra-competitive price of $4.99 a month for TV+. Meanwhile, while Disney+ will cost $6.99 a month, with an ESPN+ and Hulu bundle for $12.99.

Still, Randolph isn’t concerned.

Graphic by David Foster/Yahoo Finance
Graphic by David Foster/Yahoo Finance

“This is not what it was like with cable 10 years ago where you had to pay $129 to $140 [for one thing],” he explained. “With these prices ...there’s no reason you can’t have multiple competitors on your TV at the same time.”

Randolph added that was “a great thing.”

And Netflix is spending a pretty penny to stay ahead — Forbes estimating the platform will spend $17.5 billion this year alone on content.

“You do not build a company for the present, you’re always betting on the future,” Randolph said, citing Netflix’s recently reported $500 million-plus ‘Seinfeld’ deal, which it snagged away from Hulu for top dollar.

Randolph said the deal was akin to when Netflix “paid for the Starz catalogue that seems like nothing, but at the time people said we were crazy. I think that’s the nature of a company that is growing,” he added.

Alexandra Canal is a Producer at Yahoo Finance.

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