Saturday, 19 September 2020 - 22:47

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-I hope you're not comparing all Netflix premieres to dog food.

-There's really good dog food out there ...

-I have four dogs, so ... what are you going to tell me?

At Reed Hastings' house, the first rays of the sun barely filter through and there is already a certain disposition not to take yourself seriously.

We must resist against this unprecedented epidemic that, beyond the health cataclysm, has only confined the consumer and their leisure, putting them at home in coexistence with this North American entertainment company.

This time, the screen is not occupied by series or movies, but by the low-resolution image of a poorly lit man at dawn, the same man who once rebelled with the penalty of returning the

Apollo 13


Out of time.

Blockbuster, which dominated the physical video store market at the time (what memories), generated a discontent that Hastings' restless mind would correct a few years later.

On April 14, 1998, the first DVD rental video store on the internet was born.


Today, the on-demand flow of


has successfully replaced the shipment of records through the US postal service.

Netflix now encompasses

more than 190 million subscriptions in more than 190 countries


And there are still a few chapters to watch about this business that emerged in the Californian city of Santa Cruz.

In that surfing town there is also Hastings's house, which is connected from a disused room that belonged to one of his sons: "I refuse to fix it, because I want to be given the vaccine and be able to be back. It's a real pity not to be able to be in Madrid right now doing this interview, "he tells in videoconference with Actualidad Económica.

The office does not exist

"Actually, I don't have an office anywhere," says the manager about one of the circumstances that come to light in his latest book,

Here are no rules

(Penguin Random House), which was published this week in Spain and which serves to expose

the brutal honesty policy that Netflix apparently governs

: unlimited vacations, no bonuses, salaries above those of any other company, criticism from all fronts, sharing of financial results with employees before even to be made public ... All this in a listed company whose capitalization has reached 230,000 million dollars, about 190,000 million euros.

"Netflix's corporate culture reflects the different dilemmas that its employees face on a daily basis, instead of staying in absolute terms, as is the case in most companies. People outside the company are surprised because they have never seen anything like this," he explains Erin Meyer, a professor at Insead Business School and a co-author of the book with Hastings.

Diego Ávalos, Vice President of Content in Spain at Netflix, corroborates these same practices in another talk: "That makes you feel part of the company, although at first you can't believe it. My first day at Netflix I discovered that

Reed is going from here to There without a notebook or computer

; he sat with me and knew many things about my life, because he had investigated me. His first sentence was: 'Tell me about yourself.'

The platform itself does not cease to inform itself about the preferences of users to later take advantage of that data, which seems to have replaced gold or oil as a paradigm of something valuable.

"When you have a large selection of movies and series, it is very important to catalog them according to taste. In the age of the internet, it is essential to have recommendations. If you like Korean series, like

Crush landing on you

, they will propose more series of that style. Now a subscriber may find that we suddenly propose a Korean series.

The system just wants to know if you've changed,

"explains Hastings.

Try and failure.

And try again until you get it right.

The X of Netflix

When the visible head of Netflix (and of this interview in remote mode) was considering ideas to create a new company hand in hand with Marc Randolph, he even proposed to enter

the business of pet food

, individualized according to the animal, an option that of course Hastings unceremoniously dismissed.

In truth, that idea was nothing more than an attempt to achieve the desired customization of a product, a chimera that the digital environment has made possible thanks to a process of constant improvement, including Korean series.

Although Hastings laughs at refusing to compare Netflix to pet food, one of the names they came up with for this entertainment company was Kibble, which exactly means

pet food


The Netflix trademark, something like

network movies

, ended up convincing the founding team, although the final X raised more than one doubt in case a client interpreted it as a

reference to pornographic cinema

, as Randolph recalled in another book,

That it will never work


Yes it worked.

Netflix aspires at this time to its planetary implantation: "Two thirds of our subscribers are not in the United States. We want to produce very good content in Germany, the United Kingdom, Japan, Korea, Brazil, the United States and of course Spain, since

La casa de paper

is our big



, "Hastings reviews.

The connected world ... minus China

Although this 59-year-old Bostonian has criticized Donald Trump's "anti-American" behavior, he is not as blunt in the face of the


cold war

that the US Administration has waged with China.

"It is difficult for me to pronounce myself, because for a few years we have been trying to open our service there, something that we have achieved in any other country in the world, and we find that

in China they block us

. We have asked that this blockade be lifted, but they refuse Disney or Apple have also had to close services. We knew that the Chinese government was going to be against the western media, so we stopped trying, so that running into a closed market ... for us it already started a few years ago. "says Hastings, who in any case refuses to agree with Trump:" Basically

I am a globalist. I like that cultures are mixed

, that you see the entertainment that is done elsewhere, and that is the great contribution from Netflix, so I really want to get into Chinese consumption and that the rest of the world can see stories from China [...] Entertainment is part of how the world connects and is not about education.

onar to anyone;

people are simply more receptive when they see something on the screen. "

Hastings's professional profile, molded at Stanford, has also encompassed trips to southern Africa, where he taught mathematics in his youth, with the US Peace Corps;

in fact, this businessman is today fully involved with the educational cause.

Some of his first companions compared him with Spock, from

Star Trek

, as he reels in his book Randolph, although he remembers that that science fiction character "is almost always right".

Despite the separation of paths between the two Netflix founders, the rupture that ended the company in the hands of Hastings and the departure of Randolph, he has no qualms about describing the current CEO of the company as

"one of the best entrepreneurs of all the times";

yes, "brutal and severely sincere"


The boss doesn't matter

According to Netflix company policy, criticism is welcome;

also if they come from subordinates.

Teams work with open documents from Google Docs that are hosted on Google Drive (this interview with Hastings takes place via Google Meet), so internal discussions are the order of the day.

"At first so much feedback throws you off balance, but later it is like a gift to improve work," defends Ávalos.

In that situation, some employees have spoken of fear;

to the evaluation of others, to end up fired.

Meyer justifies it: "To understand it better, let's think of an Olympic team. Participating in the Games can command respect; when you are given a lot of freedom, too."

Hastings pronounces: "Our culture proposes to

remove the model that exists in many companies of 'how do I make my boss happy?

'. Against that, we say: 'Try to make the customer happy'".

This is the contextualization of the fact that Hastings himself stumbled upon the content manager Ted Sarandos having launched into the production of his own content in full and with a huge outlay.

"It was the year 2011 and, by size, we could already afford to go into entertainment in a big way, but

when he told me that he had acquired the

House of Cards


for 100 million dollars, I was in



By drawing that line, Netflix no longer relies on third-party productions and, last July, Sarandos was appointed co-CEO of the company, on the same level as Hastings, who does not hesitate to admit his "lack of knowledge" of the world of music. show.

"Ted is a creative genius and in practice he has been co-running the company for a long time. He focuses on Los Angeles and I in Silicon Valley, so we have created a fantastic partnership.

He knows everyone on Hollywood and I don't."


Hastings does go to the movies

Los Gatos, where Netflix's current headquarters are located, is located in that technological area that Hastings knows so well, five hours north (if traffic jams don't prevent it) from Los Angeles, a mecca for a sector that is inevitably reformed to adapt to the




Despite the reluctance of the big theaters,

Netflix has already made its way even in the

most recent


, with


, by Alfonso Cuarón;

Story of a marriage

, by Noah Baumbach, or

The Irishman

, by Martin Scorsese himself.

-How long has it been since you went into a movie theater?

-I watch about 20 movies a year at the cinema, but that's only a small part of my viewings.

-So this activity is not in danger of extinction?

-Once we have the vaccine, we will go back to the cafes, restaurants, stadiums and cinemas.

Human beings like group activities, you just have to think about music: it is available to anyone and even then people continue to go to concerts.

Cinema is an experience, a part of the ecosystem, but, unlike other sectors, they think they have exclusive content.

A restaurant does not claim exclusivity over chicken


Therein lies the difference:

cinemas want to be the first to give content and also own it


Joe Pesci, Robert De Niro and Al Pacino, in 'The Irishman', a Martin Scorsese film.

With the HBO of

The Sopranos

as a benchmark and from the success of

House of Cards

, Netflix has strived to create its own content, at a rate of investment that has given it a certain advantage over the expansion of HBO itself, Apple , Disney or Amazon.

The latter already probed the purchase of Netflix in 1998, when the company had just launched as a DVD service.

Had he closed that deal before a reticent Hastings,

the power of Jeff Bezos would break all records today


Pandemic proof

Netflix's investment frenzy in order to gain a foothold in homes around the world implies a

debt that, in the long term, is already estimated at 15.2 billion dollars

(12.8 billion euros) according to the latest Netflix accounts, data that Hastings minimizes: "If you have a house that costs a million euros, you may be comfortable with a mortgage of around 500,000, half the value. In the case of Netflix, we are worth about 230,000 million dollars [190,000 million euros] and we have a debt of only 15,000 million dollars [12,800 million euros]. This is a large number for you or for me [for one more than the other], but it is

much less than that of Disney or Time Warner

[where HBO is listed]. Compared to the value of the company, it is a small number and we are comfortable with that debt. "

In the second quarter of this year, disastrous for all types of companies precisely because of the confinement, Netflix recorded 10.1 million subscriptions, well above the 7.5 million previously estimated.

However, the company is counting on the impact of the covid to be noticed in this second half of the year, when the pockets of the spectators have already been empty.

On everyone's lips, also Pedro Sánchez

The sector is readjusting and at the same time European legislation tries to make the new platforms assume the obligations that traditional television channels do face.

It does not go unnoticed that Netflix's continental headquarters is located in the Netherlands, a territory with lax taxation where a large part of corporate taxes is concentrated.

President Pedro Sánchez has come to make this company ugly since Congress the low tax burden that it has been bearing in Spain.

-In Netflix, the data is shared indoors, as we have talked about, but the behavior behind the doors is very different.

Is the company willing to break down its accounts, country by country?

-We already do.

Unlike free services such as Facebook, WhatsApp [part of Facebook] or Google, we charge an amount every month, about 10 euros, and VAT is collected for each subscription, which

goes to the government, so you know how much we enter

and, implicitly, they also have a record of the number of subscriptions.

We are trying to be more open in this regard.

I think Spain has about five million subscriptions.

We do not seek stealth.

We are aware that taxes must be collected and that all companies have to pay them, both internationally and locally.

-In the audiovisual businesses, in full reconversion in the face of the



, the generalist networks retain live television as one of their assets.

Is that area totally ruled out for Netflix?

-I don't think we'll go in there.

The sport is very well distributed by generalist televisions in homes, hotels and bars.

Broadcasters are specialized in reaching many places at once.

The Internet, on the other hand, is good for individual choices and recommendations.

I would say that sports and the news will stay on the broadcasters for a

long time.

The interview concludes.

Enter the day fully into the room from which Hastings connects, on an interim basis if the pandemic is finally left behind.

On either side, the screens remain on.

Life goes on, but at home.



La casa de papel

is the first Spanish series to be exported to the entire planet and we want there to be more," Hastings warns.

So much so that Netflix opened its first European production center last year in Madrid, at Secuoya Studios.

Diego Ávalos participated in the activation of the project, to the point that he ended up in Tres Cantos to lead it.

"The first series for which we acquired broadcasting rights was

El tiempo entre costuras

and we perceived a great reception in Latin America. Then came

El barco


Gran Hotel


Vis a vis

[all Antena 3 fictions] and they were not only interesting in Latin America, but also "

La casa de papel would come later

. Following our company culture, we wanted independent decisions to be made from Spain. What better way than to come from Los Angeles?", argues Ávalos.

Hastings praises the country: "I wish everyone was Spain. There are incredible storytellers, a very good climate, a very practical government, large consumers and also Telefónica has deployed so much fiber that there is more network per population than almost anywhere place in the world, "he highlights.


Netflix rushed into Spain in October 2015, but it already shares a screen with many other on-demand offers.

At the end of 2016, Amazon Prime Video and HBO were presented, which this September premiered the audiovisual adaptation of Patria and has had claims for series fans such as

The Wire

and the biggest commercial phenomenon in recent fiction,

Game of



Last year, Apple made its way with its own platform, although Disney seems to have generated more expectation, which opened last March in a state of alarm and has recently given up on releasing


in theaters, for the greater glory of its streaming service. .

Of course, there is a Spanish offer, from the Movistar + off-road platform to film catalogs such as Filmin's.

According to the criteria of The Trust Project

Know more

  • Netflix

  • China

  • Disney

  • The paper house

  • House of Cards

  • Facebook

  • Madrid

  • Three songs

  • Telephone

  • Vis a vis

  • Africa

  • rest of the world

  • WhatsApp

  • Donald trump

  • Tell me

  • Brazil

  • U.S

  • Germany

  • UK

  • Pedro Sanchez

  • Game of Thrones

  • Jeff Bezos

  • Japan

  • Internet

  • Holland

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