No Rules Rules confronts Netflix’s central dilemma: How to forge a culture that perpetually pursues innovation without descending into chaos. Tons of new, heavily funded streaming challengers (including Disney+, HBO Max, Peacock, Apple TV+) have launched over the last year, but right now Hastings says he sees his biggest “threat slash opportunity” in things like video games, online sports, YouTube, and TikTok.
“Does creative quality on YouTube just go up and up and up so that eventually it meets [viewers’] needs?” he asks rhetorically. “Do we get out-competed by some combination of user-generated [content]?” Already, teens and preteens are less focused on TV and movies than the previous generation. “They tend to see it as a big yawn, they just don’t have the attention span,” Hastings tells me. But rather than trying to mimic TikTok or wean viewers off the platform, Netflix wants to have programming so electric and buzzy that kids need to watch. Otherwise, he says, “The danger is someday Netflix becomes like the opera—a sort of super-high-end niche thing.”
Ted Sarandos, Netflix’s content chief and co-CEO, suggests that it’s a matter of figuring out how different generations want to consume stories, even if it’s as puzzling to older execs as, say, an unboxing video or a SoundCloud rapper. When Netflix first dipped a toe into original kids programming, it released series with regular episode and season lengths, as if they were part of an old-school Saturday-morning kids’ TV lineup. But Gen Z has no folk memory of Saturday-morning cartoons, and Netflix quickly shifted to a more flexible mode.
Hastings and Sarandos are Netflix’s double act: one a tech whiz based in Silicon Valley, the other a video-store clerk turned tastemaker who has long been the public face of the company as far as Hollywood is concerned. Hastings recently recognized Sarandos’s contributions by making him co-CEO of Netflix. “I don’t think co-CEO is the right strategy for every company.… But I’m already pretty far back in the limelight,” Hastings says with a chuckle. That is partly because of his self-effacing, hands-off style (he prides himself on leaving as many decisions as possible to his team) and partly because Sarandos has so skillfully conquered the entertainment industry.
The increased streaming competition does drive up the price of high-end talent, since Apple, HBO, Hulu, and Amazon are often throwing money at the same prestigious creators. (Hastings mentioned twice during our conversation that despite rolling out the red carpet for The Irishman at Netflix, Martin Scorsese went elsewhere for his next movie: “We do Irishman with Marty and then his next thing is with Apple.”) Netflix made waves a few years ago when it locked down gargantuan overall deals with superstar producers like Ryan Murphy, Kenya Barris, and Shonda Rhimes.