There were some interesting tidbits in Netflix’s Q1 earnings call yesterday:
- the idea that the $1 billion writedown Time Warner is expected to take on its broadcast rights to LA Dodgers games could chill Netflix (and other streaming services’) spending on content prices
- that international piracy acts as a “governor” on Netflix subscription prices in international markets where piracy is rife
- that Ted Sarandos unabashedly said Netflix will keep pushing movie studios to release films day-and-date with theatrical releases
… but by far my favorite thing that anybody said on the call was Reed Hastings repeatedly mentioning Poland when talking about Netflix’s determination to get global rights to all content.
He was probably referring teasingly to reports that the company was readying its infrastructure for a Poland launch but the mention of the country that saw the start of another push for world domination made me laugh.
The Netflix juggernaut will keep rolling across the landscape of Europe until it has encompassed all by the end of 2016 — but in this case the conquerer is welcomed and heralded, especially by all the disappointed VPN users the company shut down earlier this year.
I think I need to get out more.
It has been four years and change since Netflix launched in its first international market — Canada — with much fanfare and a minor but embarrassing episode involving paid extras who were sprinkled into the crowd at a company-sponsored street party in Toronto. Then came the 2011 Latin American barnstorm-style rollout — Netflix’s most complicated — in which it confronted issues with weak broadband penetration, fewer digital devices, language and credit card processing issues. Great Britain and Ireland followed — with much jockeying from established competitors. Last year’s European launches looked like a snap and those markets, according to the company, been a bigger-than-expected success. And we learned last week that Netflix is fixin’ to take over the world. In two years.
Netflix’s fourth quarter earnings presentation contained the startling statement that the company can complete its international expansion– while staying profitable — in two years. That means growing from about 50 international markets to 200. And even more delightfully, it means that Content Chief Ted Sarandos soon will have the might to negotiate global content deals that enrich selection — opening new worlds of international content to U.S. subscribers and creating a new reality in which Netflix subscribers around the world are watching the same “channel.” Imagine the water cooler talk.
The company’s discovery that its original content – Marco Polo, Orange Is the New Black, House of Cards — performs more efficiently than the stuff it licenses has led to its decision to triple its spending on originals, from 100 hours in 2014 to 320 hours this year. This lovely explosion of films, documentaries, original series and comedy specials presumably will further minimize the importance of “windowing” — distribution deals that cause TV shows and movies to hopscotch aggravatingly across pay-per-view and broadcast services.
Here’s the relevant information from the earnings presentation.
So much for easing the sting of back-to-school with a new fall TV schedule. Netflix said at the Television Critics Association press tour that it will debut a bunch of new original series over the U.S. spring break season. The new series will debut simultaneously in all international markets. These are the new series and debut dates:
Unbreakable Kimmy Schmidt – Friday, March 6
A half-hour comedy series by “30 Rock” co-creator Tina Fey stars Ellie Kemper of “The Office” as Kimmy, who escaped a doomsday cult and started life over in New York City. The 13-episode series (also starring Jane Krakowski, Tituss Burgess, and Carol Kane) was written for NBC’s 2014 fall schedule but never aired.”Kimmy” will get a second season on Netflix, and it’ll be interesting to see how Fey and Carlock write the series for streaming.
Bloodline – Friday, March 20
Netflix describes this show, starring Kyle Chandler, Ben Mendelsohn, Linda Cardellini, Norbert Leo Butz, Sissy Spacek and Sam Shepard, as a combination family drama and psychological thriller. The teaser looks cool and very dark.
Marvels Daredevil – Friday, April 10
“Daredevil,” the first of a four part series planned by Marvel and Netflix, stars Charlie Cox as Matt Murdock, the blind superhero who battles injustice by day as a lawyer and takes on villains, including Vincent D’Onofrio’s character Wilson Fisk, by night in modern day Hell’s Kitchen. The 13 one-hour episodes debut simultaneously, of course, at 12:01 a.m. Pacific Time on Netflix. The four-part epic begins with 13 0ne-hour “Daredevil” episodes and continues with at least three more 13-episode seasons featuring “Jessica Jones,” “Iron Fist” and “Luke Cage” in coming years. The series culminates in Marvel’s “The Defenders” mini-series.
Grace and Frankie – Friday, May 8
Jane Fonda and Lily Tomlin star in a 13-episode comedy about a pair of frenemies (Martin Sheen, Sam Waterston) who are thrown together after their husbands run off with each other.
And for the kiddos — The Adventures of Puss in Boots debuts Jan. 16.
Leave a Comment / Posted in Barry McCarthy, Blog Post, Christina Kish, Corey Bridges, Founding Team, Leslie Kilgore, Marc Randolph, Mitch Lowe, Netflix History, Patty McCord, Reed Hastings, Te Smith, Ted Sarandos
One of the coolest things about researching Netflixed was the abundance of blackmail-worthy photos I discovered, and this leavened the excruciating task of reviewing thousands (literally) of pages of transcripts of earnings calls and analyst presentations that I had sat through once when they actually happened.
My first thought when I saw this particularly hilarious specimen—taken during an executive retreat at the Alisal Guest Ranch in Santa Ynez, California—was that I wished I had come across it years ago. Visualizing Netflix CEO Reed Hastings in a cheerleader skirt and CFO Barry McCarthy dressed like a fraternity punk definitely would have relieved the pressure of those rapid-fire post-earnings interviews.
This one of Netflix’s founding team, including (Redbox co-founder) Mitch Lowe, Te Smith, Corey Bridges, Christina Kish and Marc Randolph, is another favorite. It was taken at their first trip to the Video Software Dealers Association convention in Las Vegas. Here’s how Corey describes it:
“This is from the 1998 VSDA trade show, Netflix’s first big public outing. The five of us went to the show and had a hell of a time, personally and professionally. It was one of the high points, where we got face-to-face industry feedback (admittedly from a minority of people) communicating we were onto something big. This picture was at the Playboy Wet & Wild Party, which took place at a damn water slide park. So this is an evening party, and you’ll notice that we three guys were in our ‘okay, we can get into water slides’ outfits. The ladies were obviously having none of that.
“You’ll also notice that Marc and I are holding martinis. What a good idea that was, to mix water slides and martinis. But what else can you do but accept it graciously, when a bunny hands you one?”
Although this screen shot of Netflix’s first home page would be embarrassingly cluttered by today’s standards, it was pretty cutting edge to the 1997 e-commerce customer—still unsure what a “shopping basket” was and nervous about putting his credit card number into the Internet’s vasty depths.
I traveled a lot to dig up the story of Netflix because I wanted to see the places I planned to describe in my book, since the setting in Silicon Valley—its new Gold Rush ethos and uber casual atmosphere—was so important to how Netflix developed and what it became as a brand. The most important journey I took was a trip “over the hill” on Highway 17 to meet Marc Randolph at the place where it all began—Santa Cruz.
The narrative for this trip is in the prologue, which you can read on the Sample Chapter page so I won’t reiterate, but for those of you who wanted to know what that journey down Pacific Avenue looked like (15 years later, that is), this is for you:
The rich aroma of coffee provokes the strongest memory I have of this day and of Lulu Carpenter’s, where Marc and Reed talked over ideas for starting an e-commerce business and started the fateful stroll that climaxed with the mailing of a naked compact disc to Reed’s house to test whether the new DVD format could survive postal sorting equipment.
This Borders bookstore was going out of business the day Marc and I retraced his steps leading to the “A-ha” moment that marked Netflix’s birth as an idea for a business. Initially I thought Marc and Reed bought the CD they mailed to Reed’s house at this place but it was actually down the street at the indie Logos Books & Records. Very fitting but sadly, I don’t have a pic of that.
Here’s the card shop where they bought the envelope (along with the gift card they threw away) to mail the disc.
And… back to where they started at the Santa Cruz Post Office across the street from Lulu Carpenter’s.
We next drove inland toward Scotts Valley so Marc could show me the first “office” Netflix used—what is now the breakfast room at this Best Western.
Am I a complete geek to feel thrilled to see the actual first headquarters of Netflix, in this very generic-looking office park? Probably yes. One of the most poignant moments I had on this trip was watching Marc walk through these halls and relate how scared he was in the early days.
He sent me back via Highway 17 bus, spellbound, to relate what was fast becoming a strongly narrative and emotionally rich story over Ghiradelli-laced brownies and wine with my sister Alicia and brother-in-law Mike.