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TOM LEONARD: The ex-vacuum salesman who sucked up the Sussexes


Billionaire Reed Hastings likes to boast that the inspiration for Netflix came to him after defaulting on a $ 40 fee for a video for the film Apollo 13 he rented on Blockbuster.

Co-founder Marc Randolph disagrees. He first suggested that there should be a better way to rent movies after telling Hastings – then his boss at a California software company – that he was relying on a worn-out video copy of Disney's Aladdin to watch his baby daughter every night To bring to sleep.

Whatever the truth, the two agree that they were determined to mimic Amazon's success with books – by finding a product that could be ordered online and delivered in the mail. They soon realized that films could be the answer.

This week it announced that it has added the Duke and Duchess of Sussex to a growing talent stable – or celebrities if you prefer – that extends to Barack and Michelle Obama as well

While driving to work in the Californian city of Santa Cruz in 1997, they came across ideas and discussed how tired people were from the annoying and often expensive routine of going to a video store, renting a movie, and then – invariably – being fined received do not take back in time.

Videos were too expensive to mail, but DVDs, a new technology, were small and slim enough to fit in a regular envelope.

Hastings, a former vacuum salesman who is now a computer programmer, and Randolph, a technology marketing expert, experimented by releasing a CD.

When it arrived undamaged the next day, they found they were up to something.

Their movie subscription service, mimicked in the UK by LoveFilm, skipped the annoying late fees and soon caused the death knell for Blockbuster and his peers.

And when Internet download speeds became fast enough to watch videos, they were able to dispense with DVDs and mailboxes and instead send movies and TV programs digitally to subscribers.

23 years later, Netflix is ​​the largest digital media and entertainment company in the world. With its numerous "streaming" competitors, it has transformed home entertainment as well as the TV and film industries.

Billionaire Reed Hastings (above) likes to boast that the inspiration for Netflix came to him after falling behind on a $ 40 fee for a video for the movie Apollo 13 he rented on Blockbuster. Co-founder Marc Randolph disagrees

Billionaire Reed Hastings (above) likes to boast that the inspiration for Netflix came to him after falling behind on a $ 40 fee for a video for the movie Apollo 13 he rented on Blockbuster. Co-founder Marc Randolph disagrees

If a lot of us weren't sofa potatoes before, we now devour entire TV series in a single weekend. A recent poll found that eight out of ten Brits admit they binge viewing.

And of course, the coronavirus pandemic has boosted the demand for such services.

Netflix is ​​now valued at approximately $ 187 billion and is one of the most valuable entertainment companies in the world with 193 million subscribers in 190 countries.

It no longer just sells films and television, it makes them. The portfolio of hits includes The Crown, House Of Cards, 13 Reasons Why, Sex Education, Stranger Things, and Tiger King, while Netflix movies received ten Academy Awards last year.

It pays off for others to do programs too, and it was announced this week that the Duke and Duchess of Sussex have been added to a growing talent stable – or celebrities, if you prefer – that also includes Barack and Michelle Obama extends. Other signings include Game Of Thrones developers David Benioff and DB Weiss worth $ 200 million.

In a deal purportedly worth $ 150 million – a drop in the ocean as Netflix will spend more than $ 17 billion this year creating and buying shows and movies – the Sussexes rave about it that they "create content that informs but also gives hope" and offer "powerful storytelling through a truthful and relatable lens".

This is all very good and woke up, but cynics might suggest that if they try to give voice to the voiceless, they could start with some of Netflix's unfortunate employees.

The tech giant has built a reputation for a ruthless workplace, even by Silicon Valley standards.

The 59-year-old co-founder, chairman and co-CEO Hastings earned the nickname "The Animal" for the aggressive leadership and prisoner-free business behavior that has repeatedly brought his company to justice.

It no longer just sells films and television, it makes them. The portfolio of hits includes The Crown (see above)

It no longer just sells films and television, it makes them. The portfolio of hits includes The Crown (see above)

Netflix divides films into more than 75,000 different "micro-genres" based on stars, locations or themes. This allows subscribers to be incredibly specific about their movie needs. Stranger things can be seen above

Netflix divides films into more than 75,000 different "micro-genres" based on stars, locations or themes. This allows subscribers to be incredibly specific about their movie needs. Stranger things can be seen above

(He once showed his toughness from the stage of a Netflix corporate retreat – squeezing lemon juice into a mug and tossing it neatly down.) Hastings has been described by his staff as "unencumbered by emotion."

When 13 Reasons Why, a controversial drama series about a high school suicide, was followed by a sharp surge in Google searches for "suicide," he turned down the idea his company was responsible for, saying, "Nobody has to to see it."

Others have accused him of running a "culture of fear" at Netflix headquarters in Los Gatos, California. In the spirit of the supposed openness of the companies, Hastings advocates a so-called “keeper test”, in which managers constantly have to question whether they would fight to keep their employees.

Some managers have complained that they feel pressure to fire people so they don't look "soft".

Hastings isn't afraid to apply his keeper test to his oldest colleagues. He fired his chief communications officer for using the word "n" twice during a corporate meeting about … offensive words.

And after firing someone, the bosses have to explain in detail to hundreds of colleagues why they did it.

A Korean worker at Netflix's Singapore office told the Wall Street Journal two years ago that the dismissal culture reminded her of North Korea, where mothers are forced to publicly criticize their faulty sons.

Other insiders at the company have described disturbed laid-off employees being treated like lepers by colleagues who are too scared to show sympathy for the fear of being targeted.

Employees are also encouraged to provide feedback, known as a "360", which their managers often share with the entire team. They are also reportedly warned that they will get stuck if they don't use internal jargon. Examples of this are "What is your North Star?" And "highly aligned, loosely coupled".

The company is not remorseful about the harsh regime its 6,500+ employees work under, saying, "Being part of Netflix is ​​like being part of an Olympic team."

Employees are well rewarded and receive generous payouts. At the same time, she insists that the workplace philosophy is an integral part of the company's success.

This philosophy may be based on the years of struggle the founders of Netflix faced before they achieved success. The company's first headquarters was a rented office in a drab industrial park, furnished with cheap folding tables and mismatched chairs for the 15 employees.

On the launch day in April 1998, only 800 films were available on DVD, and an early embarrassment came when the company that made them accidentally mailed pornographic films. Such slip-ups apart, it soon became clear that they had tapped into great demand.

Within two months, they had a goal of making $ 1 million in their first year.

Netflix was an eccentric place to work from the get-go – new recruits had to name their favorite movie and then attend their first meeting disguised as a character from that movie.

By 2000, Netflix had 200,000 subscribers but was struggling financially. When Randolph and Hastings offered to sell the business to Blockbuster for $ 50 million, his boss laughed. However, within a decade, it was Blockbuster that had gone out of business.

By then, Randolph had been booted by Hastings, who had raised most of the money for Netflix. Randolph, now accepting that once he was founded, he wasn't the right man to run the company, had a lot of experience with his partner's dull leadership style.

In 1998, after a deal with Sony went catastrophically wrong, Hastings put Randolph through a PowerPoint presentation setting out the reasons why he was no longer able to remain as CEO. By the end of the meeting, he had been demoted.

"It may not have been the most empathetic gesture to do it with a PowerPoint slide show, but he was right," Randolph said later.

In 2007, Netflix began streaming movies online so subscribers can watch them on computers, tablets, and TVs. Within a few years the practice had become so ubiquitous in the United States that the phrase "Netflix and Chill" became the common language among millennials for an evening of television and sex.

Netflix created its own content within five years. The first big hit was a US version of the BBC drama House Of Cards from the 1990s starring Kevin Spacey, followed closely by the female prison drama Orange Is The New Black.

Dozens of feature films have been made since 2015 – many of them instantly memorable, but increasingly serious award winners such as the Oscar-winning Mexican family drama Roma and the gangster film The Irishman by Martin Scorsese-Robert De Niro.

The disgraced film producer Harvey Weinstein worked closely with Netflix for years. The company released Peaky Blinders, which Weinstein had bought from the UK, and its lavish costume drama Marco Polo.

As he tried to fend off the sexual misconduct allegations that eventually brought him down, Weinstein reportedly appealed to the company for $ 25 million in "emergency money," though he didn't specify what for. (Netflix insists Weinstein never asked for a loan.)

Netflix didn't impress everyone in Hollywood.

Netflix even remembers where viewers pause, rewind, or end a program. This may seem like another abuse of our privacy in Silicon Valley, but it also has benefits. Because Netflix knows what's working, it can take commission risks. Tiger King can be seen above

Netflix even remembers where viewers pause, rewind, or end a program. This may seem like another abuse of our privacy in Silicon Valley, but it also has benefits. Because Netflix knows what's working, it can take commission risks. Tiger King can be seen above

Hastings was determined that his films should qualify for the Academy Awards and had Roma screened in a handful of theaters for a few days to qualify.

Steven Spielberg was one of those who was annoyed that the "TV Movie" could be nominated, while Helen Mirren announced a future where cinema will die out saying, "I love Netflix, but damn Netflix." Hastings, who signed a huge production deal with Shepperton Studios last year to build a permanent production base in the UK, is unflinching by criticism.

Given that the pandemic has closed cinemas, Netflix and other streaming services are winning the argument that their films shouldn't be excluded from major awards.

In the UK, however, Netflix has drawn additional criticism of its finances due to its policy of moving UK sales and profits elsewhere.

In 2018, not only did the company not pay UK taxes, but they also received a discount. Netflix has so far managed to stay one step ahead of its competitors – which now include Apple, Amazon, and Disney – thanks in large part to a clever algorithm that uses the thousands of movies in its library and a huge database of the Meticulously cataloged the preferences of its subscribers.

Netflix divides films into more than 75,000 different "micro-genres" based on stars, locations or themes. This allows subscribers to be incredibly specific about their movie needs.

And, of course, it carefully tracks what people see so it can make targeted suggestions. Netflix even remembers where viewers pause, rewind, or end a program.

This may seem like another abuse of our privacy in Silicon Valley, but it also has benefits. Because Netflix knows what's working, it can take commission risks.

It reportedly gave director David Fincher $ 4 million for each new episode of House Of Cards, knowing that subscribers had published the original BBC series as well as previous editions of Fincher and Kevin Spacey.

Meanwhile, the bullish Hastings continues to thrive. He made $ 38 million last year and the father of two is now valued at $ 5.8 billion.

He has the usual tech barons – two private jets and a row of houses – while his family lives mostly on a sprawling Santa Cruz estate that has an Olympic pool, 12-person hot tub, and 12-car garage.

Hastings predicts that television will be as dead as blockbusters by 2030.

And he never lets his rivals get him down: When a head of Time Warner compared Hastings' hegemony over Netflix world domination to the threat posed by the United States from the Albanian army, he ordered high-ranking Netflix employees to wear Albanian berets .

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