Netflix and Global Video Streaming | In Practise

Netflix and Global Video Streaming

Former Vice President, Head of International Originals, at Netflix

Learning outcomes

  • How Netflix encourages a culture of creativity and freedom
  • How to maintain culture while scaling from hundreds to thousands of employees
  • Scale advantage of Netflix versus competitors
  • Challenge entering and launching new shows in new countries and cultures
  • How HBO and Disney can compete with Netflix
  • Long run economics outlook of global video streaming
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Executive Bio

Erik Barmack

Former Vice President, Head of International Originals, at Netflix

Erik was responsible for the strategy, team management, and production of Netflix Originals outside of the US. He managed over 40 production and finance executives and led the production of various critically acclaimed shows such as Dark and Casa de las Flores. He was a key figure in scaling Netflix globally to regions such as India, Mexico, and Europe where Netflix now produces tens of local language shows. Erik joined Netflix in 2011 as Global Content Director after spending six years leading ESPN Business Development. He left Netflix in April 2019 to launch his own development and production house of shows outside the US. Read more

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Erik, maybe a good place to start is to take it back to when you joined Netflix, in 2011. Did anything immediately shock you about the company’s culture?

In 2011, I was coming from Disney and ESPN and I very much liked those roles, but working for ESPN in sports, it was, literally, the biggest of the biggest. If you were working in digital media and doing disruptive things, I think it was interesting to the company at the time, for sure. But it wasn’t really going to move the needle, compared to big carriage deals and huge sports’ rights packages and all of that. When I interviewed at Netflix, what struck me is that everything that was part of the value proposition that they were developing, had to be disruptive.

How do you change the rules of distribution for Hollywood films and movies? At that time, there were just the inklings of whether you could build to doing original content. All of those things, from as simple as digital distribution to whether consumers were going to be interested in on-demand platforms, were largely unproven.

I met a bunch of smart people who were all trying to answer questions that were largely unknown. I think it was super interesting, compared to other media companies, at the time.

So it was more on the culture of asking those questions and being disruptive?

In the culture deck, all of those things were designed, from Reed’s perspective, as more of a Silicon Valley startup than anything else. There was a lot of tech culture bigged into the DNA of the company, of trial and error, of being data heavy, of doing things and asking for forgiveness, all that sort of stuff.

Does the company really live by those principles?

For the most part, yes. I think it’s an incredibly bold company, where one way of looking at it is, the biggest line item is content. For the most part, relative to most other companies in Hollywood, decisions are very distributed. When I was there, I could make decisions on hundreds of shows being commissioned, without really needing a committee to sign off on things. The same thing was true for people who were building platforms or people who were starting relationships with carriers and MVNO's and all that.

I would say, it’s harder to keep the purely entrepreneurial spirit, as you get bigger. When I was there, at its starting point, there were a couple of hundred people and we were just in the US and had just launched in Canada, as a streaming service. When you’re global and you have regional centers and you have a certain size, it’s harder to be as nimble. On a relative basis, it’s still very entrepreneurial and disruptive.

What are the systems in place that allow such distributed decision making?

It’s more like, what systems are not in place. If you are going to make a show in Italy, that’s a fraction of the budget of a show in Hollywood and you’re wrong, what’s the cost of being wrong? How many people really need to opine on that decision? Is it better just to see a number of people take their shots and, if people aren’t making good decisions over time, then that’s one thing. It’s more getting rid of the false comfort that committees are going to be better at making decisions than individuals.

It’s more about hiring correctly and giving people authority? Reed also spoke about his policy, with regard to hiring people and then, if it doesn’t work out, you can let them go and give them a good package to leave? All these principles have to fit together, to enable you to have distributed decision making?

Yes and I also think, with just the scale of what Netflix is trying to accomplish, this year they are launching more shows and films, on an original basis, than days in the year. To do that well, you need a lot of people making decisions. On the flip side, if you are a Hollywood premium network and you just have four or five shows, those shows really need to be right. They also need to be on brand and all of those things.

I understand the flip side too, which is that if you are doing something that is much more boutique, you can’t accept failure as easily.

How does Netflix deal with and tolerate errors?

Just on the shell level, I don’t think people remember the bad movies or bad shows that don’t end up being watched. What you’re trying to do is engender a culture where you’re trying to get as many Narcos and The Crowns and Stranger Things and Club de Cuervos and Casa de Papels as possible. You should be wrong a certain percentage of the time. If you’re not, it probably means you are not taking enough risk or you are not moving quickly enough.

You are actually encouraged to have that percentage error rate, to stick at that risk level?

Yes. If somebody is in charge of movies and they have ten bombs in a row, then you would say that there is a process issue. Somehow, we are getting access to the wrong type of projects or our formulation of how we projected these things, is wrong. If you’re 50/50 or 70/30, you don’t really look at the three out of those 10 that didn’t work. You’re trying to say, how can I repeat the five, six or seven. It should get easier, if content is global and you have the audience where you can see what they like, over and over again and try to find what does and doesn’t work, for that audience.

More specifically, on the principles of creativity and freedom, how did you find that the environment shaped that creativity?

I really liked it. I thought it was an incredible structure for people to do the best work of their lives. It requires people to be a little bit aggressive and a little bit bold. I don’t think it’s a culture where the meek do well or people that trying to consensus build, they also might not do as well.

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Netflix and Global Video Streaming

December 19, 2019

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