Reed Hastings

Masters of Scale · Reed Hastings on Hollywood’s future, Netflix’s shakeup and knowing…

• What Is Wrong With California's Billionaire Tax?

  Reed Hastings supports higher taxes on rich people and still calls California's billionaire tax a smash and grab. He wants loopholes closed, including cheap long-term capital gains and estate taxes. Proposition 40, the California ballot initiative, is a different case: super poorly written, and built as a one-time tax.

  The proposed tax is supposedly 5 percent. If it passes, a follow-up at 50 percent is the worry that makes the plan a crazy smash and grab. A tenth of a percent every year, small and ongoing, probably would have won. The initiative does not appear to be aimed at that smaller permanent tax.

  Favoring higher taxes on rich people can sit beside a no on a single California ballot.

  ▶ at 48:13 Share Transcript

• Is Pharma Still Hated While Doing Good Work?

  Reed Hastings says pharma is hated by the general public and, in his eyes, is continuing to do amazing and positive work. People hate the high drug prices, and pharma is deeply hated. Friends in pharma, scientists and doctors, have to get used to the hatred, continue to make progress, and accept it. They have never really been able to change the public view.

  The companies made the COVID vaccine in a year, a remarkable achievement. People did not fall in love with the companies.

  Tech people were once cast as heroes, and the image is now villainous, quite villainous. Neither view is true. Tech has gone to the natural state. Banking leaders are thought of as villainous. Pharma leaders are tho

  ▶ at 45:05 Share Transcript

• Can AI Give Every Kid a Tutor?

  Reed Hastings says every kid can have a tutor once the tutor is AI, because a human tutor is about 100 bucks an hour and people cannot quite afford one for every child today. Most of the time people want AI answers that are crisp and right. Learning how to do something is a different mode, and enough time has to go into the training data and the motivation. Young humans learn really well one-to-one with an adult who knows the subject and keeps questioning them.

  He started as a math tutor and later became a math teacher. He went from one kid to 30 or 40 kids, and the work got a lot harder because the kids learned less per hour. Over the next two to four years, generalized tutors will teach m

  ▶ at 29:01 Share Transcript

• Why Did Netflix Walk Away From Warner Brothers?

  Reed Hastings says Netflix walked away from Warner Brothers Discovery after the price rose past a bid the company was really happy with, because the purchase no longer made economic sense, and the exit brought a couple billion dollar breakup fee.

  Netflix and Paramount spent months bidding for Warner Brothers Discovery. At the price Netflix had bid, the company was really happy. The price then went up a bunch, the new level seemed a bridge too far, and Netflix chose not to close a deal it could have done. Many people feel an $80 billion debt is insane unless the buyer is Larry Ellison, and pretty lofty even for Larry Ellison. Paramount's biggest challenge is the debt. Paramount is figuring o

  ▶ at 19:58 Share Transcript

• Why Do Two Chief Executives Run Netflix?

  Reed Hastings says two chief executives work at Netflix because Ted Sarandos and Greg Peters are so committed to success in the company and think company first. They are low ego, and they work well together. The co-chief executive setup is not a general technique.

  He was co-chief executive with Ted Sarandos before he stepped down from that role. Ted Sarandos is still doing the job, with Greg Peters taking his place. Over the next hundred years of Netflix, his bet puts co-chief executives at only 10 or 20 percent of the time.

  Netflix is going to be around 100 years because humans are going to be around and humans love entertainment.

  ▶ at 18:08 Share Transcript

• How Should Netflix Compete With YouTube?

  Reed Hastings says Netflix should compete with YouTube by making more and better television shows and more and better movies, and by raising the creative bar until the work is gripping, real, and connecting.

  In the 1950s and 1960s, movie viewing went way down because television suddenly became the new hot object. Movies got a lot better in the 1970s through a creator revolution in pacing and realism, then fought back and remained a substantial art form until the internet, or until COVID. YouTube is the television in that example, and Netflix is the movies. The response is to push to be ever more gripping and to do the work incredibly well.

  YouTube shares about 60% of revenue with creators,

  ▶ at 11:09 Share Transcript

• What Was Netflix's Most Disruptive Idea?

  Reed Hastings says the most disruptive thing in his tenure at Netflix was on demand. Customers paid a flat fee and could watch as much as they wanted, whenever they wanted. The proposition was radical then and is taken for granted today.

  The distribution side was radical: watch when you want and how you want. The creation side stayed traditional, with shows like The Diplomat and films like The Unabomber. Making streaming easy took unbelievable amounts of work. The first couple of years were hard and glitchy, then it got better until a viewer turns it on and it works. A recommendation that followed one liked title with another did not, in his view, exist in a general way. People had TV guide

  ▶ at 4:34 Share Transcript