How ruthless Netflix boss Reed Hastings forced out pal who co-founded £115bn company and pays bonuses to managers for sacking staff
And the Oscar for power-mad Silicon Valley mogul goes to... Reed Hastings
AND the Oscar for power-mad Silicon Valley mogul goes to . . . Reed Hastings.
When the Academy Awards get handed out next month there will be one major winner: Netflix.
With ten nominations including Best Picture for its in-house production Roma, the on-demand internet channel will be the talk of the glittering ceremony.
Where once the Academy was all about cinematic releases, newcomer Netflix has changed the face of Hollywood by driving the biggest stars towards the small screen.
And bulldozing his way through tradition is a former vacuum cleaner salesman once nicknamed The Animal because of his uncompromising business approach.
Step forward Mr Hastings, the man who turned binge watching into an international sport. His £115billion company has nearly ten million subscribers in Britain and 139million members in more than 190 countries.
“Remember,” he tells colleagues, “Amazon is not really our competition. Sleep is our competition.”
The 58-year-old chief executive is not a man to be messed with. He has no hobbies other than a drive to prove his critics wrong.
With his sensible suits and goatee beard, Hastings looks more like a tech impresario than the most powerful man in the movie business.
Step forward Mr Hastings, the man who turned binge watching into an international sport
The dad-of-two, who is married to Patty Quillin, has a £3billion fortune, private jet and string of properties. The family and their pets, including chickens and Nigerian dwarf goats, live in a vast mansion with sprawling grounds in Santa Cruz, California.
The Boston-born entrepreneur has a reputation for forcing out friends, including his business co-founder who came up with the name Netflix.
Insiders have described a “culture of fear” at its California headquarters, where staff are expected to say why colleagues should be fired.
Hastings encourages a “keeper test” where bosses must constantly ask themselves whether they would fight to keep an employee. It means everyone is in fear of the sack and managers worry that not sacking enough colleagues will make them look “soft”.
The company pays top-dollar salaries but does not do annual rises.
Instead, it gives generous severance packages so managers do not feel guilty about getting rid of people.
In the staff assessment system, there are open discussions about the failings of colleagues and senior workers have their salary details shared among junior employees.
Nobody tells you when to arrive or leave the office. There are no fixed holiday entitlements or sick days, and employees choose what they claim in expenses.
One former staffer said: “Doing B-grade work despite A-grade effort will get you sacked. But A-grade work with minimal effort? More money and responsibility.”
The inevitable conclusion of this “freedom and responsibility” policy devised personally by Hastings is long hours, short holidays and constant anxiety.
Unlike rivals such as the BBC and ITV, Netflix does not have to worry about the 9pm watershed and has been criticised for exposing kids to strong adult material.
And if bosses want to make a controversial decision they have to “sunshine” it in front of staff, which means explaining it publicly.
That did not go well for one former PR chief who “sunshined” why he had used the N-word and promptly got the sack.
Unsurprisingly, Hastings is described as having “an emotional IQ of zero”.
When the Netflix series 13 Reasons Why was followed by a spike in Google searches for suicide, he dismissed the controversy, saying “nobody has to watch it”.
The way he tells it, he came up with the idea for an online movie rental service in 1997 after Blockbuster fined him £30 for failing to return a video.
Within 16 years, Netflix had put Blockbuster out of business. The maths and software genius relies on algorithms to feed users new films and TV shows so they never turn off.
Yet despite all the global success, Netflix paid no tax in the UK last year and won a £174,000 rebate — because the company lost £2.3billion last year and only expects to break even in 2023.
It is splashing out huge sums to lure talent, with comic Chris Rock being paid £30million for two shows and £70million spent on Will Smith’s widely panned fantasy crime film Bright.
The hits, though, such as Stranger Things, Bird Box, The Crown, Orange Is The New Black and House Of Cards have kept viewers happy.
Unlike rivals such as the BBC and ITV, Netflix does not have to worry about the 9pm watershed and has been criticised for exposing kids to strong adult material.
It was slammed for offering an Argentinian film called Desire, which featured a young girl performing a sex act, and the Bandersnatch Black Mirror episode which asked viewers to choose whether a child lives or dies. Only a fraction of the TV shows it originates are aimed at a family audience.
More than 60 per cent is rated for adult-only audiences, though there is a growing amount aimed at pre- schoolers and young kids, ensuring a fresh generation is hooked into the channel from their earliest TV viewing days.
Unsurprisingly, Hastings is described as having 'an emotional IQ of zero'
Hastings got a taste for the high life through his dad, a lawyer who worked for President Richard Nixon.
He once recalled: “Once, when I was about 12, my parents, sisters and I were invited to Camp David when the President wasn’t there.
“We rode around in golf carts, had a tour, and I saw President Nixon had a gold-coloured toilet seat.”
After spending two years in the Peace Corps in Africa, he founded Pure Software in 1991, which helped de-bug computer programs. It was here he earned the Animal nickname.
After selling the firm for a reported £570million in 1997, he discussed a DVD online venture with friend Marc Randolph.
In interviews, Hastings has always remembered his light-bulb moment: “I had a big late fee for Apollo 13”, he explained.
“It was six weeks late and I owed the video store 40 dollars. I had misplaced the cassette. It was my fault.
“I didn’t want to tell my wife about it. And I said to myself, ‘I’m going to compromise the integrity of my marriage over a late fee?’”
Instead, he combined two emerging technologies to create Netflix — using DVDs sent through the post instead of VHS and an online shop instead of a paper catalogue. People were also able to keep the DVDs as long as they liked. It dumped DVDs and moved to online streaming in 2007.
But author Gina Keating, who spoke to Randolph while writing a book about the company called Netflixed, heard a different story — that it was him who came up with the name and built the firm when Hastings was only an investor.
By 1999, though, Hastings had taken Randolph’s job as chief exec and five years later his pal had left for good.
Keating said she was informed Hastings had an emotional IQ of zero. “Several people told me that,” she confirmed.
When Netflix’s plans for domination were dismissed by a rival at Time Warner as no more of a threat than the Albanian army, Hastings got senior staff to wear Albanian army berets and dog tags.
Now he is upsetting the Hollywood model, leaving the industry split as to whether on-demand films should be allowed at the Oscars.
Netflix had to release director Alfonso Cuaron’s Roma in a small number of cinemas to qualify for nominations, before offering it on television.
Steven Spielberg blasted that decision, saying: “Once you commit to a television format, you’re a TV movie. They deserve an Emmy, but not an Oscar.”
Hastings is unlikely to be worried by such criticism.
By offering stars and directors huge sums to work for him, this is another battle he is sure to win.
Netflix original films
ROMA: Drama follows the life of a housekeeper for a middle-class family in Mexico City. Based on visionary director Alfonso Cuarón’s life. Roma has been nominated for ten Oscars, including Best Picture.
BIRD BOX: Sandra Bullock stars as a woman who has to shepherd a boy and girl through a forest while blindfolded so they can’t look at a monster that makes people kill themselves. Viewed by 45 million-plus globally.
OKJA: This super weird science-fiction film takes aim at the meat industry, charting a girl’s battle to stop a huge firm swiping her pal, a huge beast called Okja. Nominated for Cannes Film Festival’s top gong, the Palme d’Or.
BEASTS OF NO NATION: Starring Idris Elba, this follows a child soldier who goes to war in a West African country. It was directed by Cary Fukunaga, who will be behind the camera for the next James Bond film.
THE BALLAD OF BUSTER SCRUGGS: Revered filmmakers the Coen brothers turned to Netflix to release their latest movie – an anthology film telling a number of tales set in America’s Wild West. Up for three Oscars.
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Original TV
THE CROWN: Billed as the most expensive TV series ever made, this charts the reign of Elizabeth II. The first two seasons bagged 26 nods at the Primetime Emmy Awards. Season three will star Olivia Colman as her majesty.
HOUSE OF CARDS: An early success for Netflix, this is a remake of the British political thriller of the same name. Somewhat overshadowed after its lead actor Kevin Spacey was later accused of sexual misconduct.
SEX EDUCATION: This comedy-drama follows a socially inept student who lives with his sex-therapist mum. Netflix says the show, launched on January 11, is set to have been streamed more than 40 million times in its first month.
MINDHUNTER: Based on the best-selling memoir of an FBI profiler, this delves into the professional lives of agents working for the Elite Serial Crime Unit as they interview serial killers such as Ed Kemper.
MAKING A MURDERER: This gripping true crime documentary tells the story of American Steven Avery, who served 18 years in prison for a wrongful conviction. It was filmed over ten years.
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