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HomeCommunityEventsNetflix CEO Reed Hastings Confronts a Shrinking World

Netflix CEO Reed Hastings Confronts a Shrinking World


LR-WP_20150505_16_13_18_Pro (2)This Below the Line correspondent is back from a week in Berlin, where I met up with both a film editor and a locations manager prior to attending the Media Convention Berlin. The conversation over dinner revolved around the differences and similarities between how American and European crews work.

Often the films they work on are the same big-budget American movies. If that spoke to a kind of cultural hegemony, it also spoke to the contradictions on display at a conference like Media Convention Berlin. The MCB partnered with re:publica 2015, a more academically-inclined event producer, which offered a media gathering that consisted of an amalgam of politics, activism, the changing nature of work, citizen journalism, workshops on how to make your own Android Apps, along with the day’s main keynote – a talk from Netflix CEO Reed Hastings on how the company was founded and what their plans are for the future.

In an average American media conference, you generally wouldn’t find Hastings talking about Netflix’s content plans along with workshops on “informal urban planning and social architecture” and how “To Be Your Captain in Chaos,” along with other topics speaking to the general unknowability of the age we inhabit.

But studio heads like Hastings – for indeed, that’s what he’s become, for all intents and purposes – prosper from betting smartly on knowability, and their best guesses on where things are headed.

LR-WP_20150505_17_44_45_Pro (2)In his afternoon chat, he recounted how Netflix has evolved from a company mailing out DVDs, to a business that is taking on linear network TV that appears in weekly increments, at fixed times, a model he described as being like the fax machine. “The internet,” he said, “is becoming the basis for all social interactions.”

He noted that “10 years ago, there was no iPhone.” Now we’re in a stage where, sooner rather than later, all TV screens will “work like iPads.”

Hastings further noted that Netflix’s part of that unfolding puzzle is to provide well-told stories, as opposed to interactivity, or even sports, which he was asked about. “The leagues themselves will be the sports providers,” he said. There will be increasingly more providers, he thought, and presumably, more content, all of it becoming more specialized according to who that provider is.

But not all of that content will necessarily be available everywhere, all the time, on demand. Netflix only just became available in Germany last autumn, and many in the audience were wondering where their fix of House of Cards was. Unfortunately, as Hastings noted, to get that first original series off the ground, a deal had to be cut with Sky TV – part of the old linear model – to fund the production after the bidding war with HBO to get it.

LR-WP_20150505_12_17_45_ProSo Netflix doesn’t really control the rollout of those episodes in the Eurozone. But they won’t be doing those sorts of deals again he said. They’ll be holding on to the rights to their content, and not all of that content is going to be designed for viewers in America in particular, or even the Northern hemisphere in general.

Hastings mentioned a football sitcom they were developing for Mexico, and a show about drug-dealing in Latin America, along with a show for France about mayoral corruption in Marseille, to name just a few.

Hastings also talked about the “balkanization of content,” and said companies like Netflix didn’t want to wait for regional broadcast authorities, like in the Eurozone, to allow content to be available simultaneously across borders.

If you subscribe to Netflix anywhere, ultimately, Hastings thought, you should have everything, without those virtual border checks.

Hastings mentioned that Netflix, with what he stressed was a relatively small $3 billion content budget, was dealing with the balkanization of content, which arose due to the fact that the distribution of TV leant itself to exclusive licensing, which he contrasted to music and radio stations and the non-exclusive licensing that allows Spotify to offer a massive catalog, whereas streaming video providers cannot.

Netflix, he said, is “trying to do global content.”

Which, as the world becomes a smaller place, is fine, and probably necessary. But what it does to work models – especially as they’re known in Hollywood – will indeed continue to be disruptive. And the old models for residuals and selling territories will continue to erode.

Those eroded borders were also on the mind of Linda Kozlowski, VP of worldwide operations at Evernote, who spoke on “Working in the On-Demand Economy,” on the first day.

Such an economy, she thought, would allow people to “develop a specific skill set and… allow people to develop their own businesses.” In theory, these skills could be “auctioned” to corporations that would have to bid high for them. But in the global economy, the opposite has also happened.

And itinerant workers, as Hollywood crew folk know, need either strong unions to bank their benefits between jobs, or a strong social safety net for similar reasons. America currently offers neither.

So other norms will need to change, in terms of how the workers that help create all this global content are treated.

After all, it’s incumbent on folks like Hastings to ensure that people around the world can afford subscription services and screens in the first place, on which to watch stories that presumably reflect their lives.

What kind of stories? Well, day one of re:publica 2015 ended with a season 5 preview for Game of Thrones.

It is, as the day made clear, an increasingly shrinking world.

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