Netflix co-founder Reed Hastings ended his three-decade association with the company he co-founded last June, but he has a lot to say about how the company can get back to “being thrilling.”
The exec said he “read about” Netflix laying off 1,000 workers, about 6% of its staff, but did not know in advance about this month’s cutbacks.
“It’s hard because I’d like to be in the fray helping,” he said in an appearance on the podcast On with Kara Swisher. “Those are traumatic moments, saying goodbye to some people and getting other people to focus on, ‘OK, we really need to take up our creative excellence and just to be supportive.’ But they’re very competent people. They’ll figure it out. So I’m not worried about it.”
Along with the staff cuts, Netflix also overhauled its executive ranks, replacing content chief Bela Bajaria with Peter Rice and ousting film head Dan Lin. Amid the overhaul, Swisher asked if the company’s new leaders should significantly retool the company’s approach to programming given the recent slowdown in viewership growth.
“I think the strategy is doing more and better television shows, more and better movies,” he replied with characteristic directness.
Hastings added that the company would do well to return to its roots, albeit with newer offerings like live sports now in the mix. “The core brand property is about being thrilling,” he said. “We realized, it took a long time, that we could be distrusted, we could be disliked, but we can never be boring, OK? That the essence of an entertainment brand is to be thrilling.”
The co-founder also weighed in on YouTube, whose share of viewing on TV screens continues to increase as Netflix remains in a holding pattern. He noted key differences between the companies’ business models. “They have 3 million paid creators who are fighting for attention,” he said. While that population occasionally introduces blockbuster cultural properties like Obsession and Backrooms, he said it still represents “an incredibly small amount of viewing on YouTube. And it took a while to develop it. It’s the stuff that’s very attention-grabby. So in hacking attention, YouTube’s platform is very good. … It’s a highly tuned machine for attention and it’s winning viewing hours.”
Asked whether Netflix should lean into short-form fare, Hastings zoomed out to the bigger picture of entertainment’s evolution. “If you look at the beginning of television in the 1950s and 1960s, movie viewing went way down because suddenly there’s this new hot object, television,” he said. “And then movies got a lot better in the 1970s. There was a whole creative revolution in the pacing and the realism. And then movies fought back and became, again, up until the internet or up until Covid, really a substantial art form. So I would say the parallel there is, you know, YouTube is the television and that example and where the movies is we have to take up the creative bar and push ourselves to be ever more gripping, real, connecting, and do what we do – I say we. Which they do incredibly well.”
Swisher pushed Hastings on Netflix’s ill-fated pursuit of an acquisition of Warner Bros. Discovery’s studios-and-streaming division, a move that continues to weigh on the company’s stock. The former Netflix chief noted that Paramount paid Netflix a $2.8 billion breakup fee as part of clinching its $110 billion purchase of all of WBD and forming Skydance.
“At the price that we had bid, we were really happy,” Hastings recalled of the jockeying with Paramount. “Then the price went up a bunch and it seemed a bridge too far. … We could have done it. It’s not a ‘can’t,’ but a ‘choose not to.'”
Netflix’s Co-CEO structure, a unique setup in corporate America, was implemented first with Hastings and Ted Sarandos and then with Sarandos and Greg Peters.
Asked why it has worked well at the company, Hastings offhandedly said he didn’t expect it to remain common “over the next 100 years of Netflix.”
Swisher paused on that line, asking Hastings why he believed the company would endure for another century.
“Because I think humans are going to be around, and you love entertainment,” he replied.