Why Netflix Doesn’t Care About Amazon Fire TV (NFLX, AMZN)

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The fastest-selling Amazon (AMZN) product ever, the Fire TV Stick, is coming to Japan. And despite the strategic timing of the move — Netflix (NFLX) unveiled plans to expand into Asia about two weeks ago — Netflix CEO Reed Hastings likely doesn’t care one lick.

Amazon Fire TV Gaming Edition

Source: Amazon

The Amazon Fire TV and Fire TV stick are devices that allow users to access thousands of movies and TV shows on their HDTVs through a wide variety of apps. You can also connect your computer to the TV and conduct your “work” on a larger screen.

Google (GOOG, GOOGL) makes a similar device, the Google Chromecast, which has also been a bestseller.

If you own NFLX stock, you might naturally be inclined to worry about AMZN and its encroachment upon Netflix’s newfound territory. But if you can already see past Netflix’s valuation at these levels, then you’re far braver than I. And you certainly shouldn’t be sweating a little heat from Jeff Bezos.

Reed Hastings Thinks Really Big

This isn’t a knock on Jeff Bezos, of course. AMZN, which started out as an online bookseller, now sells anything and everything online, makes e-readers and smartphones, is getting into the grocery market, and of course competes with NFLX.

Amazon Fire TV will go on sale today for 12,980 yen, or around $110, and the Fire TV Stick will go for 4,980 yen ($40), while the fancier Fire TV Stick, replete with a voice-remote, will go for 6,480 yen ($55). But perhaps the most important part of the offer is that all devices will include Prime Video — the streaming video service that goes head-to-head with NFLX and Hulu.

So why shouldn’t the folks at NFLX be threatened by the sudden and aggressive entry of AMZN into a market that it literally just entered? Isn’t this tantamount to a declaration of war?

Not exactly. Reed Hastings, the iconic CEO of Netflix, thinks of competition in a far broader sense. It’s not that he doesn’t think NFLX and AMZN are competitors — they are, most certainly — it’s just that he thinks Amazon is an almost infinitesimal part of his competition.

When rumors of the Amazon Fire TV first sprang up in 2013, Hastings essentially dismissed the hubbub as overblown, explaining that NFLX competes with not only other video-streaming services, but other ways people spend their time. He considers anything you do when you’re NOT watching Netflix — be it surfing the web, watching regular TV, playing frisbee, or even working — to be a competitor.

The company’s ultimate goal is pretty grand: eradicating boredom and loneliness. NFLX might not have gotten there yet, but judging by the company’s rapid subscriber growth this year, you’d have to agree it’s making progress.

And the arrival of the Amazon Fire TV in Japan won’t stop that.

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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