Media handling lessons from Netflix CEO Reed Hastings

I have conducted quite a few media training workshops during my PR agency days. And I continue to conduct personal branding workshops for CXOs of very large organizations. So, even as I teach what to do and what not to do, earlier while facing mainstream media, and now, on social media, I have my favorites on who gets this right.

One CEO I admire enormously for his communication skills is Netflix’s Reed Hastings. He’s probably the one CEO I completely hold as a model for CXO-level communication. I’m sure he’s being managed by a very good team of professionals, but he also needs to handle himself in live interviews.

Late last year, Andrew Ross Sorkin at the New York Times DealBook Conference spoke with Reed for about 30 minutes. There are many aspects from Reed’s responses that I’d ask all CXOs to watch and learn from. I have listed 10 specific instances of how Reed handled things incredibly well (Ok, not all 10 are on that; the last one is a rare slip by Reed!).

The full interview is a must-watch:

The text in italics is my point of view, below.

1/ There are CXOs who consciously do not name competition brands at all (why give publicity to competition, being the logic). But Reed doesn’t hesitate because, contextually, it’d be silly to not name them. And without that context, it may end up making the CXO seem very arrogant. But Reed not only acknowledges competition by name but also goes on praising the one big rival everyone’s pitting Netflix against, right now – Disney. His acknowledgment of Disney seems honest and real. And hence, you consider his other perspectives too with the same honesty.

Reed: There’s a lot of competitors all throughout the world but if you’re asking in the US market – YouTube, Hulu, Amazon Prime, Netflix all launched 2007 2008 so, 11 years ago. The four of us have been competing hard for all this time…

The real measurement will be time. How do consumers vote with their evenings and do they end up watching what mix of all the services (moving the focus away from revenue and valuation, to a metric that Netflix is very well known for – remember Reed’s earlier statement about the biggest rival to Netflix being ‘sleep’?)

2/ A question quoting a rival’s head, who is framing Netflix as a content factory, as against themselves being a ‘storyteller’! Tough question. But observe the pivots Reed brings in: he names their new, exciting shows, specifically. He acknowledges the rival’s stature and legend in every way, including revenue. And goes on to equate both on the same plank of story-telling. This is excellent bridging to your own strengths, smoothly and seamlessly.

Question: Bob Iger told our own Maureen Dowd, “no one will ever have a monopoly on storytelling. Not us not anybody. What Netflix is doing is making content to support a platform. We, as in, Disney are making content to tell great stories.

Reed: I would say we’re both trying to please consumers. You know our North Star is how do we do content. I mean, we have The Irishman coming up. We have Two Popes. We have The Crown in a couple weeks and that’s about pleasing our customers. And that’s what Disney does – I mean Disney’s been doing creative content for a hundred years; they’re incredibly good at it. They’re 80 billion in revenue, we are twenty billion. And we’re both focused on how do we win viewing time from you by doing incredible work – telling stories that you all care about.

We’re still not doing the very biggest movies, you know, the five hundred million dollar kind of movie… so you know there’s ways to go in TV. I think we’ll continue to push the edge in entertainment as we get more distribution we want to have content and stories that people feel is unusual… something they haven’t seen before. So we do a lot that’s very economical and tells an amazing story.

3/ Even when he is being forced into a direction, Reed brings it all back to their official line, again, seamlessly. And when prodded on something uncomfortable about watching shows on rival platforms, Reed steps back to assert the Netflix focus.

Reed: We don’t focus on how to lock them in. We focus on how to attract people… we want you anytime you want to relax you’re in front of the TV and you.

Question: Do you think people are gonna watch meaningfully on mobile?

Reed: Younger people are growing up watching a lot on mobile and the question is, as they get more wealth as they get a house do they get a big-screen TV and then they switch over like everybody else or they stay very mobile focused that’s unclear.

Reed: Disney’s an amazing company and I think they’re gonna have great success. We worry about it… we admired them. I mean you know I’ll subscribe! They’ve got great shows… you know they’re a wonderful competitor because they really understand creativity. We learn, we watch them, we admire the heck out of them. There’s a bunch of tech companies that are in entertainment but I think Disney’s the one that we really have the most to learn from in terms of entertainment.

Question: Have you seen Morning Show?
Reed: Yeah, I have.

Question: You keep a list?
Reed: No I don’t keep a list except on Netflix, but I’ll watch other shows… so like Amazon has Fleabag and I like that show

If we have content that people consumers feel great about and really want to watch then no one’s gonna block us and we’ve never been blocked it’s fine. It’s a pretty background issue. The big issue for us is how do we develop amazing stories that you all haven’t seen that’s unbelievable

People know about Netflix and they want that app and I don’t think it’s ranking is gonna make a difference. Look, in mobile you’ve got two ecosystems right now, so it’s pretty small, but when you talk about television where most of our viewing is, it’s a very wide range of platforms so that may be the difference.

4. This is the toughest question. And pits Netflix as morally wrong. In fact Andrew doesn’t ask his specific salvo and lets Reed meander on content building empathy etc. And then drops his specific bomb! But Reed pushes the morality out of the question and gets into the aspect of their company’s focus. Andrew tries to pin Reed down multiple times, but Reed escapes, rather convincingly, every time! And at one point turns the point against Andrew’s brand itself (NYT), and very smoothly.

Question: One of things I did want to talk to you is the international market, because that’s where you think the growth is gonna come. It’s sort of a geopolitical issue right now and we’re talking freedom of speech. Hollywood, for very long time… there was a view that we were exporting our values around the world. How much do you think about Netflix now in that context about exporting values? Or do you think that as you become a more and more international company as opposed to a domestic company that will change?

Reed: I think about it as mutual sharing you know. When there’s a great French show like Family Business, people all over the States enjoy it and it spreads and there’s we serve a hundred and ninety countries and we try to think of them you know all on the same footing.

Question: The reason I ask is you have a comedian, Hasan Minhaj, who’s got a great show but he made some very critical comments, as you know very well, about MBS in Saudi Arabia and Saudi Arabia sent you a letter and said you have to take this episode down… and you did.

Reed: Well, we’re not in the news business. We’re not trying to do truth to power… we’re trying to entertain and we can pick fights with governments about newsy topics or we can say because the Saudi government allows us to have shows like sex education that show a very liberal lifestyle and you know very provocative and important topics and so we can accomplish a lot more by being entertainment and influencing you know a global conversation about how people live than trying to be another news channel.

Question: Okay, but let me read you something this is actually from an op-ed in The New York Times: “by making the episode unavailable in Saudi Arabia Netflix has become complicit in pervasive censorship that artists, entertainers, journalists and regular citizens have long had to deal with in the Middle East. What do you think of that?

Reed: I think the New York Times wrote it. I mean you know you guys are a truth to power brand that’s what you stand for so it would be terrible for you guys. We’re an entertainment and so we don’t feel bad about that at all well we want to do is create room for all of our entertainment to be able to be seen around the world

Question: But let me ask you a question you have taken political positions in the United States so I’m thinking of what’s taking place in Georgia for example.

Reed: I think no one likes foreign interference. So in the US, we are US company so we can be a participant in that. That’s a lot different than us being a participant in say the French election or the British election.

Question: I guess the question is though… do you feel a responsibility? If Saudi came to you and said look you got to take half the shows… then what happens?

Reed: If they came to us and said you can’t have gay content we wouldn’t do that… we would not comply with that. The thing was this was truth to power. Hasan’s enormously funny, interesting and you know, one more quite justified critique of MBS. But that’s just not our core brand. That’s a news kind of thing you know. It’s tough if you want to be a news brand… then you have a different set of things that you do and if you want to be an entertainment brand and that’s really about sharing lifestyles then you do have to draw hard lines.

5/ A piercing question about a test innovation and the answer could impact Netflix’s relationship with content creators. Reed walks the balance pretty well, by using legacy analogies (like DVD players).

Question: There has been a report that you are considering or are starting to test the idea of allowing people to put their play button on sort of an SuperSpeed… 1.5 or 2 times as fast. So you know this is not a true fast-forward but close to it and it has caused a lot of consternation as you know among artists in Hollywood. I want to read you what Aaron Paul the actor from Breaking Bad who was just in your fabulous new film wrote:
“Stop! As the person talked about in this article I need to speak out. There is no way Netflix will move forward with this. That would mean they are completely taking control of everyone’s art and destroying it. Netflix is far better than that. Am I right?

Reed: Well Aaron is right in that our job is to have both creators and consumers feel excited about Netflix and both are important audiences and so sometimes we do things like play next episode over the credits or a long time ago it was watching a movie on a mobile phone that was seen as a terrible thing. How could you let my art be seen on a mobile phone? But we have to balance both of those constituencies and they’re both very important and in the speedup which was only 1.5 times, 1.5 times you know it’s an experiment. We’re always doing experiments to try to see to consumers even care about that… to the degree that consumers cared a lot then we would go talk with creators and see you what are the use cases. Obviously things like DVD players have had functionality like this a long time you know. But we do care about creators and the creative intent and
vision but we also care about consumers and so that leads us to do things like when you watch a series and you can skip intro you know… people like that a lot, not all creators like that.

6/ A very topical question that is burning in multiple countries since business models of theaters are in jeopardy. Reed bridges it back to Netflix.

Question: Let me ask you a different question that relates to theaters, because this has been a big debate for a very long time. The Irishman is playing by the way right near here. But there was an effort to try to bring the Irishman from what I understand to theaters around the country. And this idea of a window I think they wanted a 60-day window, you wanted less than that I think 45 or 30 days or even 20 days. Why don’t you just buy your own theaters?

Reed: At this point, yeah you know you could buy a theater or two but we’re not in the business of theatres we’re in the business of pleasing our members on a global basis… and so when we produce a great film like Two Popes or Marriage Story or The Irishman, we want to get it out to our members and that’s what really drives us. Personally we love theaters I watch a lot of movies… and theaters it’s a different experience. It’s nice to have a crowd especially when it’s a comedy or horror like that scare thing if you got a good audience… so we don’t mind theaters and really we’re fine with theatres… it’s just that they want exclusive window which would delay our release on Netflix so that’s the one you know if theaters want to carry Netflix films once they’re on Netflix because people want to go out for the group experience that’s great. Remember what happens here is the internet was bad for bookstores, it’s tough on newspapers, it’s bad for video stores but it’s been really good for restaurants… like restaurant business is bigger than it’s ever been… makes it more convenient and theaters are more like that they’re a ‘going-out experience’ and so I think it’ll turn out to the Internet like… to reserve a seat and a ticket and all those things is gonna help with the theater business to grow but again we’re really just focused on our members.

7/ A tough question, using facts, about Netflix’s future. And Reed’s answer goes much deeper into the geo-specific aspects of pricing using a very practical comparison.

Rich Greenfield – Partner – LightShed Partners: There’s been several times throughout Netflix’s history where investors have feared that you were past your peak in terms of growing global subscriber count. Kind of the fear that you’re now on the downhill with 2019 set to be lower than 2018. Is this a permanent downhill or are we on the downhill slope or you know can you reverse that and start growing again on a global basis in 2020?

Reed: We’re gonna try to do the absolute best content that we can and ultimately what that does is draw in more subscribers whether it’s more or less than last year next year it’s hard to tell but again think of it as all of the near-TV over the next 5-15 years is going to move to the Internet. So you’ve got a very large movement on a global basis and that should allow us to build a very large subscriber base which is what we’re working on.

Question: How does price play into that? You’re experimenting with much lower price points in India and Malaysia.

Reed: In India we’ve launched at roughly $3 price point but the average mobile phone monthly unlimited subscription is $2 dollars a month in India… whereas we in the US might pay 60 or 80 so there’s a big gap of what people are used to paying.

8/ I loved Reed’s response here. The question was about Hulu preferring the ad-supported model and if Netflix would ever get into that. While I think the future may force Netflix to consider this model, right now, Reed pivots the question to Hulu’s relationship with Disney and makes a perfect point!

Question: Hulu has a model where they’ve got ad-supported and they have no ads and you pay more would you ever do that? They love the ad-supported model they make more money per person when they are going the ad-supported route… than when they’re going no ads. So they barely advertise that option in fact. So what are you thinking about that?

Reed: It’s funny thing ‘cos Disney’s on the Board of Hulu and Disney then bought Hulu and yet when they go to launch with Disney Plus no ads! So you know when you’ve got a lot of insight really into the model you know you make certain choices so we’re very comfortable doing no ads like Disney Plus and we’re gonna compete on that basis

9/ This is quite a candid confession. And a focused response on what Reed thinks Netlix is good at, or can be good at.

Question: I read an article a few months ago about Fortnite taking Netflix viewership and Google’s launching its gaming streaming platform. Apple’s getting into gaming and I wonder if you see Netflix going beyond its core product into something like a gaming streaming service or individual content creation like Instagram?

Reed: We are really focused on doing incredible series and films and unscripted but you know basically in that category and you’re right there are a lot of other things that people do to entertain themselves, you know including Fortnite and the original quote was we compete with Fortnite more than HBO… meaning Fortnite gets a lot more hours of viewing and ultimately it’s about competing for those hours of viewing. But we don’t compete with Fortnite by doing something like that, because we’re not very good at that. We compete by doing the most amazing TV shows you’ve ever seen so you put down Fortnite and you come to watch our show because lots of people watch a mix. And the great thing about the competition with Disney over the next couple decades is that will raise the bar of the average quality of our movies and series and then we’re both competing with you know YouTube and TikTok and you know all these other video gaming services.

10/ There was also one place where Reed actually made a rare slip! He actually named one of Netflix’s shows wrongly – The show is called Quicksand!

Reed: We have incredible variety. So we have a show, Quicksilver, out of Sweden, crime thriller… did super well and in Sweden of course you expect that or hope for that but it did 15 times more viewing and the rest of the world…

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