This week I moderated a fireside chat with Netflix CEO Reed Hastings at a historic movie theatre in downtown Santa Cruz. For those who don’t live in the Bay Area, Santa Cruz is a sleepy little beach town a mountain away from San Jose. It’s filled with hippies and is one of the only places in the Bay Area that the reach and wealth of Silicon Valley hasn’t changed. There’s always a debate about whether that’s good or bad.
The town would certainly love more high-tech jobs so people who want to live and work in Santa Cruz have more options. But Hastings and his family live in Santa Cruz, precisely because it’s not Menlo Park.
In an hour interview, Hastings and I traded plenty of barbs (he never calls me back yet seems to lavish attention on Om Malik), discussed the future of digital entertainment, Netflix’s unique corporate culture, when video services like Netflix will go global, and as a large supporter of charter schools, his thoughts on the documentary “Waiting for Superman.” The local NPR station has the podcast of the talk here.
In case you don’t want to sit through an hour of banter, I’m posting a few shorter clips. In this one we talk about how Hastings utterly proved me wrong. He’s done it a few times, but mostly back in 2002 when the company went public. I was one of the only reporters bearish on the company insisting that sending DVDs by mail was a clever trick but in a land of Blockbuster and Wal-Marts not enough of a sustainable edge.
Netflix wasn’t well known in a lot of the country back then, and nearly everyone I knew had a Blockbuster account. If they just offered to mail them to you and eliminate late fees, how could Netflix compete? A few years later, Wal-Mart jumped into the market aggressively, Netflix’s stock fell to about $2 and I looked brilliant. Then, Hastings beat both giants and I looked like an idiot. He credits Blockbuster not taking the threat seriously enough and he credits “the power of focus and desperation.”
In this clip, we also talk about Netflix’s focus on constantly tweaking the product, why he believes the Valley adage “Only the paranoid survive” is flawed, and why the big surprise for him has been how long it’s taken streaming video to erode the DVD-by-mail business.
Later today, I’ll post a clip about where Hastings sees the future of the digital livingroom going and life amid giants like Google and Apple, now that he’s beat the brick-and-mortar titans.
Quick shout-out to The City of Santa Cruz and coworking hub NextSpace who organized the event.