Interview Transcript

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 start up 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 VNOS 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 centres 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.

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