Is This Why Reed Hastings Left Microsoft?

It's now been 14 months since Netflix (NASDAQ: NFLX  ) CEO Reed Hastings stepped down from Microsoft's (NASDAQ: MSFT  ) board of directors, but we're still not any closer to finding out why he left the tech titan, where he could have conceivably been a CEO candidate to replace Steve Ballmer.

"I've decided to reduce the number of boards I serve on, so that I can focus on Netflix and on my education work," he offered up in the original press release.

Focusing on Netflix has certainly helped. Shares of Netflix have more than quintupled since Hastings revealed that he wouldn't be seeking reelection for his seat on Microsoft's board. However, the fact that Hastings didn't leave any of his board appointments outside of Mr. Softy suggests that there was something else brewing that may one day make Netflix and Microsoft more foe than friends.

Nothing meaty has materialized on that front, but now we have Variety reporting that Microsoft's Xbox will begin offering original programming by early next year. 

Nancy Tellem -- Microsoft's president of entertainment and digital -- is hoping to have something out during next quarter. At the latest, the push for original content will have to wait until the following quarter. She made these comments during a Variety industry presentation. 

If there are any doubts that this could be the reason for Hastings bowing out of Microsoft, keep in mind that Tellem -- a seasoned TV executive -- was hired by Microsoft to do exactly this just two weeks before Hastings made his announcement. 

Microsoft's decision to set its Xbox platform apart by cranking out original programming isn't something that's going to make Netflix lose any sleep. As rich as Microsoft may be, it's not going to be making the kind of capital investment necessary to bring a House of Cards or Arrested Development revival to its fold. 

However, it's also easy to see why Hastings left when he did. Even if Microsoft will never pose much of a threat to Netflix as a video service -- and there are no assurances that Mr. Softy will be a non-factor forever -- it would have been awkward for Hastings to sit around as the board discussed its digital future. 

As tech companies expand their business models, expect more board resignations to continue when a new turn hits too close to home.

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  • Report this Comment On December 16, 2013, at 6:43 PM, AceInMySleeve wrote:

    "If there are any doubts that this could be the reason for Hastings bowing out of Microsoft, keep in mind that Tellem -- a seasoned TV executive -- was hired by Microsoft to do exactly this just two weeks before Hastings made his announcement. "

    That seems like pretty good evidence.

  • Report this Comment On December 16, 2013, at 10:53 PM, SpinelessWonder wrote:

    What a silly and pointless article. Microsoft has been involved in digital TV content, including interactive TV, since before Netflix and YouTube even existed.

    This is simply click-bait by way of a manufactured story.

  • Report this Comment On December 17, 2013, at 7:25 PM, RobertBrad wrote:

    Reed Hastings founded Netflix (NFLX) in 1998, after he was forced to pay a large amount of money as late fees for a film rental.

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