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Just because I am bearish on Netflix's (NASDAQ:NFLX) long-term prospects does not mean I think CEO Reed Hastings is dumb. While I would never call most CEOs dumb, even if they deserved it, I would never even euphemistically imply that somebody like Hastings is less than smart. He proved as much on Wednesday during his performance at the pow-wow All Things D held in Rancho Palos Verdes, California.

Hastings is a master in the use of rhetoric. I won't call it spin because that diminishes the real ability it takes to use words to construct a sound argument. People like Hastings practice rhetoric. An important distinction exists between the two, particularly when you consider what lays ahead for Netflix as well as NFLX.

Hastings said many of the right things on Wednesday. He is a master at addressing problems and deflecting criticism without ever really admitting that problems or criticism exists. As an example, consider this excerpt from the Q&A with Kara Swisher.

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What Hastings did there was nothing short of solid, maybe even brilliant, rhetorical maneuvering. He answers without directly addressing the concern that Netflix has no or weak fiscal constraint, boundaries, or foresight. Hastings sticks to the mantra that as we make more money, we prudently spend more money. He makes sure to highlight fiscal sanity, like a sensible new car buyer opting for a Toyota over a Lexus, by pointing out that Netflix simply "can't afford" new releases.

Later, Hastings drives a home a point he's been trying to make for a while: Netflix really doesn't compete with as many companies as everybody claims we do.

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It's a relevant distinction to make. A commenter to a recent article I wrote about Pandora (NYSE:P) and Sirius/XM (NASDAQ:SIRI) made essentially the same point:

While I don't completely go along with that view of competition, it's sensible. Basically, this line of thinking posits that the existence of Pandora will not make Sirius/XM go away, just like Hastings notes that the existence of Hulu and others will not render Netflix extinct. Sure, time spent with Hulu could represent time a consumer might otherwise spend with Netflix, but as long as that consumer still finds value in her Netflix subscription, and does not cancel it, it really doesn't matter. Perfectly sensible -- on the surface, as of today.

As ways to monetize subscribers, viewers, listeners and what have you evolve, it might just matter how much time a user spends with you versus another option. Time spent listening, or TSL, has been the driver of ratings in terrestrial radio for years. Similar concepts will be increasingly at play as the new media frontier continues to get forged.

In downplaying competition, Hastings goes on to play not only the line of fiscal responsibility, but the role of the little guy.

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Not many people pull off humble and cocky, concurrently, quite as well as Hastings. Everybody loves an underdog that's, don't look now, actually winning the race. Again brilliant.

And, if I was one of those guys who beat my chest over "predicting" the obvious, I would do that right about here.

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All in all, Hasting's performance at the event made me like him more. The big thing that Hastings did, for me at least, was clearly draw the battle lines. I hate to deal in dichotomy, but in this case, I might just be better of conceding to black and white logic.

At day's end, Hastings considers Netflix's spending habits on both content and international expansion "a virtuous cycle." The company's detractors believe it's a vicious cycle. If we ever find out who is "right," I think one side is going to fall really, really hard. It won't be a judge's decision or TKO. It will be like a final round knockout from a Rocky movie (not available for streaming at Netflix, by the way). Right now, Netflix has the shorts and other critics on the ropes. That could change in an instant.

Even up here, I will not be shorting this thing (I "short" via puts, if I "short" at all) with the exception of catching a downward move intraday. I would rather wisely pick my battles. I just don't think it's wise to battle Hastings' long sentiment (even though he's currently a seller) on his company's stock.

Disclosure: I am long SIRI.

Source: Why Netflix's Reed Hastings Is No Dummy