Now Netflix\u2014a behemoth that has moved far beyond streaming others\u2019 films and shows, with an estimated $18 billion content spend for 2025\u2014is writing the sequel, following the same underdog-towinner trope. It announced in early December an $82.7 billion deal to become the new owner of the storied Warner Bros. film and television studios, plus cable crown jewel HBO and streamer HBO Max. The deal comes some 15 years after an executive who previously oversaw those very assets dismissed the notion of Netflix being a threat to Hollywood\u2019s power structures: Jeff Bewkes, then CEO of Warner Bros. parent Time Warner, described that scenario in 2010 as \u201ca little bit like, is the Albanian army going to take over the world?\u201d\u00a0<\/p>\n
To be sure, Netflix has never before attempted a deal of this size. And with rival Paramount making a play for the entire Warner Bros. Discovery business through a hostile bid, a Netflix\u2013Warner Bros. tie-up is still far from a sure thing. But even if the deal never actually materializes, Netflix has demonstrated how to not just disrupt an industry but swallow it.\u00a0<\/p>\n
It\u2019s a trajectory that\u2019s all the more impressive given the company\u2019s scrappy, dotcom-era start. \u201cNetflix should have never existed,\u201d says Peter Supino, who analyzes the media and entertainment industries as managing director at Wolfe Research. \u201cTheir path relied on a bunch of strategic decisions that were risky and uncertain at times and the body of which proved out to be smashingly correct.\u201d\u00a0<\/p>\n
To dominate streaming today, of course, is to dominate all of entertainment. And Netflix now has a market cap\u2014almost $400 billion currently\u2014 that exceeds the combined value of legacy competitors Disney, Warner Bros. Discovery, Fox Corp., Paramount, and Lionsgate.\u00a0<\/p>\n
So just how did Netflix do it? The company has built a culture that fosters flexibility and daring, and has repeatedly shown its adeptness at taking calculated risks\u2014including a series of strategic U-turns. Netflix was never going to make original television shows and movies\u2014until it ponied up an unprecedented $100 million for two seasons of House of Cards<\/em> from executive producer David Fincher in 2011, sight-unseen without a pilot. Netflix didn\u2019t care about password sharing\u2014until it began vigorously enforcing a \u201cone household\u201d rule in 2023. Netflix was never going to introduce livestreaming or advertising\u2014until it added both within a few months in 2022 and 2023, then struck its first major sports rights deal, another one-time no-go, in 2024.<\/p>\n \u201cWhen one of your people does something dumb, don\u2019t blame them. Instead ask yourself what context you failed to set. Are you articulate and inspiring enough in expressing your goals and strategy? Have you clearly explained all the assumptions and risks that will help your team to make good decisions?\u201d<\/p>\n And Netflix was never going to go all in on theatrical releases\u2014until it decided to buy Warner Bros. and pledged to distribute its films to movie theaters. \u201cWe\u2019ve built a great business, and to do that, we\u2019ve had to be bold and continue to evolve,\u201d co-CEO Ted Sarandos told investors on the call announcing the deal. \u201cWe can\u2019t stand still. We need to keep innovating and investing in stories that matter most to audiences.\u201d<\/p>\n Call it \u201cinnovating,\u201d or call it misleading the competition, most people agree that Netflix has offered a master class in audacious strategy. In his business tome, No Rules Rules: Netflix and the Culture of Reinvention<\/em>, Hastings offers guidelines for strategic pivots, pointing out: \u201cThe vast majority of firms fail when their industry shifts.\u201d The former CEO, who kicked himself upstairs to chairman in 2023, attributes the company\u2019s success to a culture that prioritizes innovation, motivates top performers, and has few controls, allowing Netflix \u201cto continually grow and change as the world, and our members\u2019 needs, have likewise morphed around us.\u201d\u00a0<\/p>\n This is antithetical to how business is usually done in Hollywood, where studio executives would rather bet on proven IP with sequels, spinoffs, reboots, and copycats than stick their neck out for new, untested ideas.\u00a0<\/p>\n Kevin Dietsch\u2014Getty Images<\/p>\n<\/figure>\n A bolder approach has given Netflix the upper hand. \u201cWe were willing to take the risk that these other companies weren\u2019t willing to take because they were so stuck on what made them successful in the first place,\u201d says Jessica Neal, former chief talent officer at Netflix. This approach means also accepting what Neal calls \u201cthe tax\u201d of sometimes disappointing customers in the short term, in service of a bigger goal. Case in point: Netflix\u2019s short-lived plan to split its DVD-by-mail operations into a separate unit called Qwikster in 2011, while arguably necessary to maintain the focus on streaming growth, annoyed customers, and its execution was seen as a rare blunder for the company<\/p>\n \u201cCompanies do [themselves] a massive disservice because they look at mistakes as failures, and we looked at mistakes as learning,\u201d says Neal, who worked almost 12 years in talent-focused roles during two stints at Netflix. \u201cBut you have to teach people how to do it, and we did. And you also have to hire people that have the appetite to do it.\u201d\u00a0<\/p>\n That once-scrappy DVD-by-mail company now employs around 14,000 people worldwide. And after nearly 30 years of strategic pivots, little of Netflix\u2019s original business model remains in place. Yet remarkably, the company\u2019s internal corporate culture remains relatively unchanged. It\u2019s that work ~300,000<\/p>\n >300 million<\/p>\n Netflix\u2019s 2025 streaming subscribers, in over 190 countries In 2009, Netflix published a 125-slide culture deck on how it has become such a high-functioning workplace. The memo has been updated several times, but it continues to emphasize a handful of unique concepts, including freedom over processes, leading with \u201ccontext, not control,\u201d and a commitment to candor, even (or especially) when it\u2019s uncomfortable.\u00a0<\/p>\n As Hastings\u2019s book acknowledges, Netflix\u2019s culture is weird. The company doesn\u2019t keep track of vacation or expenses. It champions internal transparency around performance data and executive salaries. And to ensure it\u2019s only employing people at the top of their game, the company famously applies a \u201ckeeper test\u201d\u2014essentially an employee review where bosses ask themselves, \u201cIf X wanted to leave, would I fight to keep them?\u201d\u2014to decide who is delivering real results and who should be let go. Some very senior executives have exited the company in accordance with these principles, including Patty McCord, the company\u2019s original chief talent officer and one of the architects of its corporate culture.\u00a0<\/p>\n \u201cWe were very focused on feedback and having tough conversations that people don\u2019t want to have,\u201d says Neal. \u201cAnd we believed that telling the truth to somebody was actually caring, and it was uncaring to do the opposite.\u201d This helps teams communicate during rough patches, she says: \u201cWe actually were able to navigate those things much more effectively because we were able to talk about the tough stuff.\u201d<\/p>\n Take the moment, all those years ago, when Time Warner\u2019s CEO shrugged Netflix off as the \u201cAlbanian army.\u201d In what could be a scene straight out of the official Netflix movie, a comment intended as an insult instead galvanized the troops. Hastings reportedly gifted top executives camouflage berets featuring the double-headed eagle from the flag of Albania, and Neal remembers staff wearing Albanian army dog tags \u201cwith pride.\u201d\u00a0<\/p>\n Even back then, they knew they\u2019d eventually get their Hollywood ending.<\/p>\n This article appears in the February\/March issue of <\/em>Fortune with the headline \u201cHow Netflix swallowed Hollywood.\u201d<\/em><\/p>\n<\/div>\n #Netflixs #billion #ragstoriches #story #DVDbymail #company #swallowed #Hollywood<\/p>\n","protected":false},"excerpt":{"rendered":" It\u2019s a story so good\u00a0 it could… <\/p>\n","protected":false},"author":1,"featured_media":11098,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[579,596,8187,1243,723,626,461,719,1649,3898,3157,8188,577],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/11097"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11097"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/11097\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/11098"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Reed Hastings on leading with \u201ccontext, not control.\u201d
From No Rules Rules: Netflix and the Culture of Reinvention<\/em>, by Reed Hastings and Erin Meyer<\/cite><\/p><\/blockquote>\n<\/figure>\n![\"\"](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/01\/GettyImages-1327376740-e1767981644781.jpg?format=webp&w=1440&q=100\"\/)
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environment\u2014and what Supino calls an \u201cunsentimental culture\u201d\u2014that just might be its secret weapon.\u00a0<\/p>\nThousand-fold growth<\/h2>\n
Blockbuster turned down the opportunity to buy Netflix in 2000.<\/h3>\n
\n
Approximate number of subscribers to Netflix\u2019s DCD-by-mail service in 2000<\/cite><\/p><\/blockquote>\n<\/figure>\n\n
Sources: Netflix, Media Reports<\/cite><\/p><\/blockquote>\n<\/figure>\n