Sept. 8, 2020

Who’s the next Netflix? Let’s ask CEO Reed Hastings

I’m not going to bury the lede here, and that’s mostly because I need to get back to my Ozark binge: This episode of Business Casual features Reed Hastings, cofounder, chairman, and co-CEO of Netflix.

There’s a lot to unpack with Reed. Because companies don’t just become cultural cornerstones overnight. It takes luck, hard work, and, as it turns out, a very distinct corporate strategy. After all, what you watch on Netflix says a lot about you run Netflix might say more.

The ways Reed runs Netflix might surprise you. In this interview, he gets candid about his triumphs and failures and gives us the state of play in these so-called streaming wars. Spoiler alert: Netflix is winning. 

Reed gives an inside look at what makes Netflix tick—and how it became a $200 billion company with more than 190 million subscribers worldwide...some 3x the subscriber count of its biggest competitor.

And most importantly, Reed predicts how Netflix might meet its demise. Because for every Netflix, there’s a Blockbuster. And someday Netflix will be the Blockbuster.

Listen now.


Kinsey Grant, Morning Brew business editor and podcast host [00:00:08] Hey, everybody, and welcome to Business Casual, the podcast from Morning Brew, answering your biggest questions in business. I'm your host and Brew business editor, Kinsey Grant. And now, let's get into it. [sound of a ding]

Kinsey [00:00:19] I spend most of my time on this show talking to you and with my guests about the stories and trends and themes that define business. Oftentimes, those stories and trends and themes do just that for entire generations. There are only a handful of companies I would characterize as generation-defining, though. These are businesses so integral to the zeitgeist and the cultural conversation that not knowing about them or the ways they make money is unheard of. There aren't a lot of them, but Netflix is one. 

Kinsey [00:00:48] The company, which you might remember started out as a DVD rental company, has become an absolutely integral part of the culture of today. It's one of the earliest and best examples of disruption. Just ask Blockbuster. But how did it become a $200 billion company with more than 190 million subscribers worldwide, some three times the subscriber count of its next-biggest competitor? Did Netflix win these so-called streaming wars we've been talking about for the past year? And better yet, who disrupts Netflix? 

Kinsey [00:01:19] I'm taking it straight to the source for answers. So today, I have the distinct pleasure of welcoming to Business Casual, the co-founder, chairman, and co-CEO of Netflix, Reed Hastings. Reed, thank you for coming on the show. 

Reed Hastings, chairman and co-CEO of Netflix [00:01:31] Thank you, Kinsey. Pleasure to be with you. 

Kinsey [00:01:33] Now, Reed, you've been quite busy, obviously, as the leader of Netflix, but also because you do have a book coming out September 8th called "No Rules Rules: Netflix and the Culture of Reinvention." Congratulations on the forthcoming book. 

Reed [00:01:46] Thank you. We are super-excited. Erin Meyer and I have been working on this book for several years, and I think it's going to be fascinating for people. Controversial. People will talk about it. But I think there's some really fascinating lessons in there for creative companies. 

Kinsey [00:02:03] Right. And a little controversy is good. We like a little healthy controversy every now and then. So now let's get into the nitty-gritty of the book and of how you built Netflix from a DVD rental company to a $200-plus billion company. You have been building Netflix into this juggernaut for many years, 20-plus years, and surely it has taken on several iterations. It's looked different ways at different times during your career. 

Kinsey [00:02:27] But I think that one of the constants when it's a story about Netflix is culture. Explain to me a little bit more how you define that culture, what that culture means to you. When we hear freedom and responsibility in terms of Netflix, how did you land on that and why does it matter? 

Reed [00:02:43] I had the great fortune in my life to start two companies, and my first one was in the 1990s. And we made many mistakes in that company by putting in a lot of process, by trying to be very efficient, things that sound good to some people. And what we realized is that made us very rigid and not very flexible. And with Netflix, we've really focused on being flexible, and we're willing to tolerate some inefficiency. 

Reed [00:03:14] And that flexibility has allowed us to grow against Blockbuster when we were DVD by post, and then to continue to thrive as we added some streaming, and then as we became mostly streaming, and then as we got into our original content, like "Stranger Things" and "Orange Is the New Black," and then to be able to go global. And now we're about one-third U.S. members, two-thirds non-U.S. So all of those things are very hard to do. And the success is because of our focus on flexibility over efficiency. And that's what "No Rules Rules," the book, is really about. 

Kinsey [00:03:53] Explain a little bit more what you mean by tolerating some inefficiency. That's not typically something you hear from a tech company or even an entertainment company, sometimes. 

Reed [00:04:02] You know, we really try to inspire our employees rather than manage them. And so then, you know, there's not management checking lots of things and double-checking things. So some things get done that are not optimal. And we're willing to accept that because what we want to do is stimulate a lot of creativity. We want people to try things, to question things. 

Reed [00:04:26] And overall, that leads to lots of great discussion. Some of it slows you down a little bit or does the wrong thing. But most of it helps you be really first principle and think through the right things. 

Kinsey [00:04:40] How do you think that that culture breeds innovation? Is it more so in hoping that people will actually be innovative? Or is there a way to measure that it actually has impacted the way people think about problems put in front of them? 

Reed [00:04:52] Again, in my first company in the '90s, as the book "No Rules Rules" goes through, what happened accidentally is most of the people who thrived there were those who followed process well. And could you follow the rule book? And so it's selected for people who like that and were good at that. And then, when the market challenge came, those were not the same people who could think completely differently, as we needed to do. And ultimately, that company we had to sell to our largest competitor. 

Reed [00:05:23] So with Netflix, we really set out to have a culture where maverick people were really valued and were the center of the culture. And so, an example is we don't have any rules around vacation, how much to take, how long to take, or about expensing. Our expense policy for employees is do what makes sense for Netflix. 

Reed [00:05:45] And it's very broad and they use good judgment, but that's very different than most companies that don't want to be defrauded for $100 of something that shouldn't be expensed that is. And we're willing to tolerate that occasional problem because what we want is people who can think and have flexibility and like that freedom. 

Kinsey [00:06:07] How do you make sure people don't abuse those policies? 

Reed [00:06:10] Well, sometimes they do, and so then you just have to be willing to tolerate some minor losses. But what you gain for that is being able to attract great creative people that are worthy of the trust, and those great creative people help steer the business. And so while we might have slightly more edge-case, minor fraud than other companies, what we do have is a lot more creativity also. 

Reed [00:06:36] So, again, that's an example of why sometimes focusing on the micro problem creates a macro problem, which is lack of creativity, and why we think for a creative company like ours, it's better to focus on the big picture and ignore many of those little things. 

Kinsey [00:06:54] Do you think that it's possible to scale this to the nth degree? Could this become the biggest company in the world with this culture intact? It sounds like one thing when you have a startup and a couple of unresolved expenses or something like that, or someone takes more vacation days than they should, is one thing. But when you have thousands of employees like Netflix does, I imagine it gets a little bit more difficult to ensure that this is still a productive culture. So how did you scale the culture at Netflix and how do you continue to scale it as you do grow? 

Reed [00:07:24] When we were 200 employees and went public about 20 years ago, we did worry about that. How are we going to hold on to this as we get to 400 or 600 or 800 employees? And the answer was by always seeking to be better. So we're always trying to improve the culture as we grow—so to get better, as we get bigger. And we can do that—it's definitely harder when you're bigger—but we can do that because we have more smart people thinking about how to improve the culture. 

Reed [00:07:56] And so, for example, in the last three years, we've really focused on inclusion, which we had not focused on before. So that's an example of improvement. And so now, at about 8,000 employees, we're definitely a better culture than we were five years ago, 10 years ago, or 20. So to answer your question, it's by always trying to improve as you grow. And that's really what the book is about, is all these stories and tips to be able to help people with that process as their organization grows. 

Kinsey [00:08:30] And improving as you grow is an interesting concept, especially in the world in which we live today. So often founders fall into this trapping of I liked it better when there were five of us. It was so much easier to do things when our company was smaller. It's interesting to hear your perspective that a company can actually improve the larger it gets. It doesn't have to be a headache. You don't have to run into all of these unforeseen problems. It can actually be a very beneficial thing for culture, at least. 

Reed [00:08:57] It certainly has in our case. But again, that's probably because I get the benefit of doing this the second time. 

Kinsey [00:09:03] Right. 

Reed [00:09:03] Because I would say in my first company, I felt like that typical founder that you describe. And so what the book goes through is that journey. And it's unobvious because you do have to let go of control, and you do have to be less obsessive and really focus on inspiring creativity from others. 

Kinsey [00:09:23] Do you have an ideal size for Netflix in terms of number of employees? 

Reed [00:09:27] No, we don't focus really on an ideal size. We want to make a big impact in the world. We want people to enjoy our titles and to be talking about those titles. And we're doing pretty well in the United States, but we have a long way to go outside of the U.S. So we've definitely got a lot of growth to go. 

Kinsey [00:09:46] Right. And I would like to talk about those original titles and international growth as well. But quickly, before we get into that, Reed, I'm interested to hear how you think this culture, which is pretty atypical for today, today's sort of, you know, business, tech cultures. How do you think that that acts as a competitive advantage for Netflix? 

Reed [00:10:04] We're really mostly an entertainment company or tech-powered, for sure. But about two-thirds of our expenses are content expenses, and that's the dominant share—creating all the great new content. We just had a film, "The Old Guard," which is sort of really reinventing the superhero genre and modernizing it. And so, you know, we're incredibly proud of that kind of work. And the culture is perfect for that of stimulating lots of amazing creativity in the titles and in the stories that we tell. 

Kinsey [00:10:41] Reed, let's dig into the ways that that heavy, heavy investment in content has created an advantage for Netflix against the competition. But first, a short break to hear from our partner. — And now back to the conversation with Reed Hastings. So, Reed, do you view content as a major moat for Netflix? 

Reed [00:11:03] Everything we do is trying to be better for our consumers. And the more they love us, the better. But it doesn't really form a moat in the traditional sense, because like Disney+ has grown to over 50 million overnight. I mean, it's incredible growth. So there's a lot of room and streaming, and not many effective moats. It's really about execution. And every day we get up to have the best recommendations we can, to have the easiest sign-up we can, to have the best titles, the best recommendations. 

Kinsey [00:11:35] All right. So let's talk a little bit about this execution of [indistinct] practice where they meet. You were expected to spend north of $17 billion on content in 2020. Now, this was an estimate. Do you have any sort of indication what that number is going to look like, given circumstances? [chuckles]

Reed [00:11:51] COVID has been a great challenge for organizations all over the world, including ours. And it's another testament to the flexibility that we talked to in the book, which is, if you're really flexible, then when something like this hits, people are used to making decisions, and they do so in each local area of the business. 

Reed [00:12:13] And so it's been marvelous how our employees have rallied both in the very initial phase, doing things like setting up our animation, where we moved hundreds of employees to working from home and really creating animated films from home, which had never been done, to all the things that we've done in customer support and elsewhere. 

Reed [00:12:35] So, you know, really COVID has been this great chance to show what a difference investing in flexibility over efficiency, where, you know, in efficiency, you go and you seek approvals constantly. There was a famous phrase that I loved out of Sun Microsystems, which is to seek approval is to seek denial. 

Reed [00:12:57] And what they're trying to do is get people to realize that the safe thing to do may be to seek approval, but the fast thing to do, and the inventive thing to do, is just move ahead. And those are the kinds of things that we try to share with our employees. And so that's again, you know, one of the stories in the book. 

Kinsey [00:13:17] Do you think that that has anything to do with this concept, when it comes to Netflix's content, of having something for everybody? 

Reed [00:13:23] Having many things for everyone, not just one thing, is great for customer satisfaction. And what our book is about is really, you know, everyone's goal is serving their customers. How you do that changes over time. And so you want a culture that's very inventive and flexible for adapting to, and inventing, new ways of serving your customers. And it takes a lot of cultural practices so that then goals, like having lots of content for everyone with incredible recommendations, becomes very practical. 

Kinsey [00:13:59] So is that the goal right now? It is to have many good things for everybody and also a recommendation system that makes sure that you see all of those good things? 

Reed [00:14:08] Sure, but the recommendation system's invisible to most people. 

Kinsey [00:14:11] Right. 

Reed [00:14:11] They just open up Netflix and say, wow, there's all this stuff I want to watch. So often the magic is behind the scenes. And we're certainly a case of that, where the ideal state is you just open Netflix on your phone or on your TV, and there's like three things you're just dying to watch. 

Kinsey [00:14:29] Right. And hopefully you don't re-watch the same series that you've watched a million times already. [laughs]

Reed [00:14:34] You know, re-watching is great too, because there's a comfort, you know, and whether that's "West Wing" or whether that's "Vampire Diaries," or anything, there's just sometimes you want to be really challenged and that's intense. And sometimes you want to just unwind and be very comfortable. So it's just like food in that way. A mix of comfort food and stimulating food is excellent. 

Kinsey [00:14:59] Can you tell me a little more about the thinking that went into getting into original content in the first place? I mean, Netflix a decade ago was not—we would never think about it for Emmys or BAFTAs—and now look at Netflix. So what inspired that decision? What made it clear to you that this was going to be a worthwhile investment because it's been a billion and billion of dollar investment? 

Reed [00:15:20] My co-CEO, Ted Sarandos, grew up in the content business and really educated us about how, say, HBO had started on other people's content back in the '80s and '90s, and then moved into their own content. And obviously that was very successful for them. And so that was the source of his famous quote that, you know, we had to become HBO, meaning strong and original content, before they became us, meaning strong on the internet. 

Reed [00:15:49] And I think we succeeded at that. So now we're really invested in this kind of global sharing of content so you can get incredible variety, but not feel like it's, you know, shoved down your throat. Instead, it's just we present the ones that you're likely personally to love. 

Kinsey [00:16:08] So when you think about the relative importance of original content versus license content on Netflix today, does original continue to outweigh license content in terms of importance to the business or the business' bottom line? 

Reed [00:16:22] Yeah. Now we've got such a great set of productions going on. The movie, "The Old Guard," I referred to it, came out two weeks ago. "Kissing Booth 2," in a different genre, it's been super-successful for us also. So now we're set on really producing, around the world, some of the best stories and backing people. And again, the license titles are great too. We're not the only one to produce great work. And, again, the main thing we focus on is our member satisfaction. And so where there's a licensed title that will do that, we love to carry it. 

Kinsey [00:16:59] Do you think that the new shows or the license content or what's driving new subscribers most? 

Reed [00:17:06] Oh, it's very clear that people come for the new shows that they're talking about. We were just talking about "India Matchmaking" and what a cultural phenomena that's been for people who are, you know, a little bit around the Indian community. It's a great look into that. 

Reed [00:17:23] There's "Last Chance U" about community college football. There's, of course, "Tiger King," which was this amazing, crazy story. And all these things unite people to learn about, talk about. And then there's just incredible stimulating entertainment, like we talked about "Ozark." 

Kinsey [00:17:43] I have to wonder, did you know, on the business side of things, that "Tiger King" was going to be what it was? 

Reed [00:17:49] No. [laughs] It's clear to say I did not. And yet when you watch it, you can see the characters are so compelling, you can't believe those are real people doing that. And that's all — 

Kinsey [00:17:59] Right. 

Reed [00:18:00] That's all documentary footage. I mean, just what an incredible insight. 

Kinsey [00:18:06] And honestly, really great timing too. With that, and with "Outer Banks" right at the beginning of quarantine, I spent most of my early hours on Netflix at that time. 

Reed [00:18:15] At Netflix, we want to be a place you can just go to and curl up and have comfort. And obviously, it's super-important that you don't watch too much in a day. We really have evolved from, you know, the kind of binge-viewing excitement, which was the novelty of the internet, to really watching a little bit every day. And I try to be a good role model of that, of sort of watching an hour, an hour or two a day and not being too obsessive about it, trying to develop good habits. 

Kinsey [00:18:46] That's interesting. How much content consumption is part of your job? Do you have defined hours of like, nine-to-five content, and then free time content? 

Reed [00:18:55] I'm so lucky that I get to watch for pleasure. [Kinsey laughs] My co-CEO, Ted Sarandos, he watches everything and got an amazing memory. I mean, he's unbelievable. And so he really anchors that part of the business. 

Kinsey [00:19:09] Right. So, Reed, you brought up this idea that you want Netflix to be somewhere that people can come curl up, cozy up, watch something, find something intriguing, or something challenging, or even something comforting. I have to imagine that that would be what every streaming service wants right now, that no matter who it is, they want someone to come and be a sticky user. So how do you think that the content you're putting out is differentiating you from the rest of the competition, or setting Netflix apart from other platforms that are pursuing similar goals? 

Reed [00:19:39] Exactly. It's all about culture. It's everything that we describe in "No Rules Rules." That's the fundamental difference we have. Of course, all those other companies want to please customers. What we have is a culture that really enables people throughout the company to be independent, to be creative. And that's been the secret of our success, first against Blockbuster 15 years ago and then transforming into streaming to become global. 

Reed [00:20:08] And that same thing is what differentiates us in how we interact with actors and directors and show runners. It's really to support freedom, and that's the fundamental advantage of Netflix. So you may be like, well, then, if it's such an advantage, why do you put it in a book? Why do you share it? [Kinsey chuckles] And the answer is because we've been so fortunate to learn from so many other companies. 

Reed [00:20:34] And most books have some insights, but are typically kind of, frankly, CEOs pontificating. And what we really tried to do with this one, in Erin Meyer, who's my co-author, and she's a business school professor, very independent, accomplished author. And so you see her basically interviewing me and hundreds of people throughout Netflix to get the real insight in what's happening. 

Reed [00:21:01] And so I think that structure that we have in "No Rules Rules" really makes it very readable and very honest, which is appropriate given Netflix is so much about transparency and honesty. 

Kinsey [00:21:14] But are you worried that you're giving away the secret sauce? 

Reed [00:21:17] There's always a little bit of that, but most of our competitors are quite large. And that makes it hard for them to adjust. And this is really a gift to smaller and more innovative and nimble companies—that what they'll do is read the book and then build upon it. And I have no doubt that in 20 or 30 years, people will look back and say, well, that book was great in its day. But we've built on it and done even better. 

Kinsey [00:21:43] So you want to become outdated eventually. 

Reed [00:21:47] All of culture progress is about moving forward. And so, yes, we want it to be that the culture as described there will be a building block. And in fact, we are continuing to improve. And I hope that in 10 or 20 years, we'll be substantially better than what we describe in the book that we have today. 

Kinsey [00:22:08] So how come one of your competitors—how come Hulu couldn't adopt this same kind of strategy and come for your crown? 

Reed [00:22:15] Well, Hulu is one group or division within Disney. It's being merged with other divisions. A lot of chaos that goes on when you do all that. So, you know, and again, they're very creative, as are, you know, Amazon, incredibly creative. And so we do face a lot of competition. But when you ask about the core differentiation, I think it's mostly about culture and the way that we operate. 

Kinsey [00:22:41] Who do you think your biggest competitor is? 

Reed [00:22:43] Well, YouTube is the biggest one in terms of time. They win about seven times more viewing hours than we do on a global basis, and we're both blocked in China. So it's sort of, you know, equivalent. And again, they're just so incredible around the world with such a variety of content. And, of course, completely different content, but that's, you know, what lots of people curl up with. And then it's our job to tell even better stories that are so compelling that you pull yourself away from YouTube and watch Netflix instead. 

Kinsey [00:23:18] Interesting. So is that, I don't know, kind of undercutting this whole concept of the streaming wars that we've been talking about for the last year and a half or so. Is it really streamer against streamer or is it just trying to compete for people's time? 

Reed [00:23:32] Well, we consider YouTube a streamer. I mean, they've been streaming longer than anyone, starting in 2005. They pioneered the space. So narrowly, if you think about it as streaming, they are the pioneer. They were a year and a half, YouTube was, before we did our first streaming. And of course, they have different content than we do, so that's a big difference. But, yes, I would say if you're just focused on Hulu versus Netflix, you're both too U.S.-centric and too premium content. And the real competition for entertainment is quite broad, including all of video gaming. 

Kinsey [00:24:12] Is video gaming a major concern to you? I know that we've talked about it on this show before, not the two of us, [laughs] but other guests have and basically said that it's going to be a vacuum for people's time as "Fortnight" continues to grow and similar market entrants try to replicate that same success. 

Reed [00:24:30] Yeah, video gaming is continuing to grow. And what we're doing is trying to tell such good stories that you break away from your video gaming and come join us and watch a story. We're not going to succeed by trying to do gaming. We're going to succeed by incredible movies, incredible series that grab a whole society's attention that everyone's talking about. 

Kinsey [00:24:53] Right. And I think there is a lot to be said for staying in your lane. We're going to take a short break to hear from our partner and then we'll learn a little bit more about how Netflix is and is not doing just that. — And now back to the conversation with Reed Hastings. 

Kinsey [00:25:10] Reed, you've brought up this idea of international versus domestic business quite a few times in this conversation. I want to hear more about what your perspective is on that. You know, right now, I would say that Netflix, at least in my experience on this show and speaking with listeners, is by and large the market leader in the U.S. in terms of where we're spending our time and coming back for more content. But is that the case internationally? Tell me more about how you're investing outside the U.S. 

Reed [00:25:35] We started in the U.S. a long time ago, and we started in various other countries later. Now we're in every country in the world outside of China and continuing to invest in sharing those great stories from around the world. And so that's been successful for us. And we've got a whole chapter in the book that really goes through, you know, what do you think about when you go from domestic to much more than that. What do you want to change and how, and what we're learning and the way we do honesty. So there's a dedicated chapter in "No Rules Rules" just for that. 

Kinsey [00:26:14] Can you give us any sneak peaks of insight that you give that chapter? 

Reed [00:26:18] Yeah. The way the Dutch give feedback is really different than the way the Japanese do. And unless you understand where they're both coming from, one can seem too rough and one can seem too indirect to an American who's used to like, you know, how in America we're trained to say something nice, then say the hard thing, then follow it was something nice. 

Reed [00:26:41] So that turns out to be very uniquely American and not the way the Dutch or the Japanese operate. So once you start to understand that you can have different systems for doing that, different assumptions about what's the thoughtful way to do feedback, you can be much more skilled at it. 

Kinsey [00:26:57] How do you scale such that you can understand those different ways of giving feedback, as just one example, as a company that was founded in the U.S. and continues to operate largely here? How do you figure all of those things out? Is it possible? It sounds like a massive undertaking. 

Reed [00:27:13] Yeah. I mean, a lot of our hiring now is not in the U.S. And we're continuing to invest in most or many countries that we operate in, Brazil and France and Italy, in Japan and Korea and India, on and on. And we're hiring amazing people and that helps us really get grounded. Amazingly, only 5% of the world's population is in the U.S. And 10% of the world's internet users are in the U.S. So it's a very big market, but so are those other markets. 

Kinsey [00:27:44] Right. Now, some of these larger entertainment and media companies have successfully gone international. I mean, Disney is one very obvious example, but I think there are probably others as well. Do you think that this could be a place where maybe being a little bit more nimbler or more of that startup vibe to your culture could hinder Netflix if you don't have some of the more traditional aspects of a more traditional media company? 

Reed [00:28:09] You know, like you said, some companies have a great long term. You know, Disney's been investing in the Disney brand for 100 years. We've been investing globally in Netflix, you know, for six. 

Kinsey [00:28:21] Right. 

Reed [00:28:21] I would say, given that, we've made great progress. But you're right that Disney is revered around the world as a super-strong brand, you know, and very specific around kids and family. And what we want to do is have our brand also be very strong, but really around, you know, every time I turn it on, there's tons I want to watch. And that's through the magic of personalization and having an incredible set of original content producers. So by pulling those two together is really what creates the magic. 

Kinsey [00:28:52] OK. So Disney went from the more traditional company to launching a streaming service to compete with Netflix. Would Netflix ever go in the opposite direction? Can we ever expect that, I don't know, Netflix-branded experience on a cruise ship or something like that, or a theme park? 

Reed [00:29:08] Well, we already have "Stranger Things" experiences in Universal theme parks. So, absolutely. 

Kinsey [00:29:13] So just be show-specific. Not a Netflix cruise. 

Reed [00:29:18] Yeah, I think the shows are really the big brands that we have and, but no, no cruise ships in our future likely. 

Kinsey [00:29:26] [laughs] I don't think there are a lot of cruise ships in anybody's future right now. 

Reed [00:29:29] Well, I hear the trading prices are quite low in cruise ships these days. 

Kinsey [00:29:34] They are. They evidently are. [laughs] 

Reed [00:29:37] There are bargains out there, but not for us. You know, as "No Rules Rules" really goes through, there's a lot of value and focus. And, you know, in continuing to do better in what you do, and what we show is just how much positive that can be if your market is big enough. And so we've had, has the book describes, a lot of discipline in maintaining that focus, which has helped us grow against all these giants. 

Kinsey [00:30:05] So when we talk about the importance of focus and staying focused on what you're doing well, does that mean that Netflix would never consider some of these things? You know, we talk in an almost joking way about a Netflix cruise or something like that, but when you think about, say, live programing, is that too far outside of the focus for Netflix? I guess my question is, how do you hone in on what that focus is, and at what point does too much focus hamstring growth or innovation? 

Reed [00:30:30] Well, we never say never. And remember, we did start in DVDs and do quite a bit of innovation to get to streaming. So we're always open to that innovation, which helps please our members. And that's what we focus on. 

Kinsey [00:30:43] OK. So if you disrupted Blockbuster, who disrupts Netflix? 

Reed [00:30:47] Well, that will happen sometime over the next hundred years, almost with certainty. And so it's up to us to forestall it as long as we can by being as much as we can self-destructive and internally innovating. 

Kinsey [00:31:00] Yeah, self-destructive is important and interesting. I just have to wonder what it would look like. You know, I would never have guessed that this would be—streaming wars would be something I would dedicate my career to covering when I was 5 years old watching my Power Rangers VHS. [laughs] It's a different world. 

Reed [00:31:17] And the world keeps changing. But, you know, entertainment has stayed amazingly—it's a very human storytelling format. If you think about movies, basically the hour and a half, two hour-story was pioneered 100 years ago, and we still love them. So there are a lot of things to change, like the technology. Is it in color? What's the sound? The fact that you can have amazing Dolby vision at home now on your, you know, new Samsung or LG TV. 

Reed [00:31:45] So that's very amazing. But the underlying story is very similar. And then, you know, television series, of course, started in the 1960s. Got a lot better with HBO in the 2000s with "Sopranos" forward. But those core storytelling formats actually are amazingly stable. And what we're trying to do is make them more convenient, more enjoyable, and more personalized. 

Kinsey [00:32:12] All right. Well, Reed, we've covered a ton of this interview. It's been very insightful. Before I let you go, I want to do a couple of rapid-fire questions. I source these from our listeners, our Business Casual listeners, so please, do not shoot the messenger. 

Reed [00:32:25] [laughs] Shoot away. 

Kinsey [00:32:25] OK. So first up, do you see TikTok as a competitive threat? 

Reed [00:32:29] I did spend a bunch of time on TikTok just because it's so different than Netflix. So, you know, it's super-enjoyable and amazing creativity. 

Kinsey [00:32:39] OK. If your career thus far were a Netflix series, what series would it be? 

Reed [00:32:46] Well, I'm scared to say "House of Cards" [Kinsey laughs] because that's kind of a dark. All those murders. [indistinct] So maybe the "West Wing," kind of like effective communication. 

Kinsey [00:33:01] OK, three very interesting and very different shows, but I like where your head is at. All right. Next rapid-fire. Would you ever buy out a movie theater chain? 

Reed [00:33:12] Very unlikely. That's a great business, just like sports stadiums are a great business. There's a market for crowd events. That's just really not what we do. And I think movie theaters will come back as sports stadiums come back. 

Kinsey [00:33:27] OK, what three shows have you binge-watched recently? But I guess you don't binge. So what three shows have you carefully watched recently? 

Reed [00:33:35] "Last Chance U" is what I'm watching right now. Football. "India Matchmaking" we just talked about. And "The Old Guard." 

Kinsey [00:33:46] OK, and last rapid-fire question. In a post-COVID world, do you see any major changes to the now famous Netflix culture deck? What changes? 

Reed [00:33:57] No, I think the Netflix culture deck, as in the book "No Rules Rules" is really an embodiment of human-human interaction and how to work together well to achieve great things, in this case for our consumers. So I don't see any big changes from COVID. 

Kinsey [00:34:15] All right. Well, Reed, that seems like as good a place as any to wrap things up. Thank you so much for coming on Business Casual. For anybody out there who wants more from Reed, we're giving away some copies of his book. So stay tuned for how you can get your hands on one, and Reed, thank you again. 

Reed [00:34:30] Thanks so much for having me. It's a great pleasure. And I hope everybody gets a chance to learn a little more about the Netflix culture. Erin Meyer and I have worked hard on the book to try to make it really fun to read. 

Kinsey [00:34:51] Thank you so much for listening to this episode of Business Casual. Reed Hastings is the ultimate business strategy wealth of information. That's why we are giving away three copies of Reed's book, "No Rules Rules" to three lucky subscribers to my newsletter. Head on over to That's to join my newsletter community if you haven't already. We are giving away three copies of Reed's book to three subscribers to the newsletter. Thank you so much for listening, and I'll see you next time. [sound of a ding]