Chapter 750： Netflix Transformation

Los Gato, California.

Netflix headquarters.

Patty McCord, who was Netflix's chief talent officer at the time, stood upright and looked calm, as if the suggestion about the company's direction and the more subversive promotion of the personnel system were not what she said.

In fact, Netflix's success is tied to its unique corporate culture.

For example, cancel the vacation system, reimbursement system and travel system mentioned at the moment, and even establish a headhunting agency within the company to manage employees like products.

It is even more clear why it is necessary to launch an impact on the traditional corporate culture concept.

Co-founder and CEO Reed Hastings thought slowly, nodding affirmatively.

The implementation of this theory is what he has always wanted to do, and it will indeed gather the executive core of Netflix.

However, regarding the online broadcasting platform...

"Will it be a little early?"

Reed Hastings pondered for a long time, still not making up his mind.

Netflix is ​​not even mature in the DVD rental business, and hastily entered other fields. It has a shallow foundation and is too risky. For Hastings, the overall plan is correct, but the time is wrong, and the mutual influence down, can not see their own advantages.

Patty doesn’t say anything about dying without transformation, and he doesn’t talk about seeking wealth and risk, but just makes a statement based on the market, “After Google acquired YouTube for $1.65 billion the year before, it has successively partnered with Universal Music, SonyBMG, Warner Music and CBS have reached a content licensing and protection agreement to relieve market concerns that content providers may pursue infringing content and increase legal action.

Until today, YouTube's main video content has included movie clips, TV shorts, music videos, etc., as well as amateur videos made by other uploaders. The daily active number has exceeded 6 million people... We are slow, and our opponents are faster. , What are the advantages of Netflix? "

Reed Hastings frowned. After all, this matter is indeed about the future of Netflix.

You know, YouTube, which is still developing at the moment, and Netflix's main business do not overlap, but YouTube has begun to invade Netflix's field - online DVD rental.

After all, the distribution of movie shooting and film and television content has always been played by Netflix.

Moreover, the offline share in this field is still the largest share of Best, and Netflix eats high-quality service.

Back then, when Netflix was established, it was just because they went to the Best Store store to select video discs. The clerk's service attitude was arrogant, and there was a problem with their delivery method. They always put the most popular movies in the most conspicuous position, some old movies. Don't pay attention at all.

Therefore, they started a company that can freely search for movies, and then place an order to buy DVDs through the membership system, and then deliver them in the form of express points.

Netflix's main online rental users are netizens who have grown up with the Internet era.

Now, YouTube is also trying to win over these users. Even if YouTube is not involved in online rentals, nor does it intend to develop distribution outlets, who knows when they will have this idea?

If you really call, you will be passive.

That's what Patty McCord was trying to say.

"Hey, let's have a meeting. If you want to go, you must first determine your thoughts."

Don't think that it is easy to upload the offline video resource content you have mastered to the online platform.

If you want to change, there are many problems.

Hastings just thought about it, but not implemented it.

First, Netflix and content providers (such as the Big Five, Firefly, Lionsgate, and Blockbuster) only sign the agency sales of video disc copyrights. The film and television copyrights are not owned by Netflix. After all, Netflix does not make film and television dramas. It is just one of the platform parties of the offline channel. If you want to play online, and members pay for profit, how should the profit in this area be distributed? Are content providers willing to support it?

Second, if you want to move online, you must drastically optimize the user experience, develop personalized recommendation algorithms for online platforms, and achieve the same convenience as the DVD rental business. If it weren't for this, it would have closed down a long time ago. In terms of agency film sources, there was no room for comparison with Bestard at the beginning.

It's just that Blockbuster's own management is rigid and its structure is bloated, otherwise there will be no one else.

Third, the company's business transformation will inevitably affect the existing company management and departmental business. Come up with a plan.

......

Of course, the most important thing is to reach an agreement with various content providers. If there is no content support, it will be played online.

Seeing that her idea was approved, Patty turned around and went to inform.

Netflix, indeed, the time has come to have to change.

......

Lehman quickly learned about Netflix's plans, mainly Viacom Group, News Corporation and the five major content providers who notified the higher-end content providers one by one and listened to their opinions. Fortunately, Firefly has already been listed. The power of the table to speak.

Of course, Lehman is no stranger to Netflix, but he never thought about contacting the company in advance, mainly because it was of little use.

Netflix rang the bell in 2002, and there was no shortage of funds. Maybe Lehman at that time still needed to hug Netflix's thigh.

Furthermore, why should Netflix attach great importance to a second-tier studio? People eat large-scale DVD rentals and take the amount of money.

The DVD rental business has always been a gold mine, and those qualified to operate gold mines are mainly Viacom's Blockbuster, AOL and Netflix, and Netflix has never been allowed to enter the market until it is recognized by Wall Street investment banks. card face.

Until the listing and financing, there is a lot of capital behind it - for example, the shareholders behind SoftBank include Murdoch Group (Paramount), and Redstone behind Sequoia also has a stake (Universal). In business, Netflix is ​​of course qualified to be a second-order dealer to make money through channels.

In the offline market of Hollywood, studios are transferring funds and redistributing benefits with these channel providers every day. A set of rules has been formed, and everyone's interests are guaranteed. After all, studios produce content and channel shops Setting content, this is a partnership.

Now, Netflix wants to launch a streaming service, and wants to talk to everyone, become an Internet pay TV, movie distributor, and mainstream movies and TV episodes can continue to maintain a highly synchronized frequency, and also run DVD online rentals.

Content procurement is the most common solution to content richness since Netflix was founded, and it is no exception to the cooperation with streaming media platforms. The bosses are not so friendly.

As a content provider, because it is an upstream industry chain and dealing with channel dealers like Netflix, you can earn a steady profit from sales. Of course, content providers like to hear about it - anyway, DVD and home entertainment, they have always been If you are a member of the industry, you can make money.

As for Netflix competing with YouTube for the film and television content market, studios certainly don’t care, whoever pays for the copyright can cooperate with anyone.

The relationship here is also complicated.

Offline has long been monopolized by several companies and these companies have been implicated in each other. For example, Sony has reached a cooperation with YouTube, but it is not shy to cooperate with Netflix.

When the market overlaps, who can insist to the end to say, anyway, there is no one that dominates.

After all, at the beginning, Blockbuster even endured and adjusted Netflix, so what was there to be afraid of? In 1993, Redstone acquired Paramount, and in 1994, he spent 8.4 billion US dollars to win 81.5% of Blockbuster’s shares. Almost has a certain content monopoly in Hollywood.

In 1997, with the combination of Blockbuster and Paramount, and Viacom as a strong backer, Redstone occupied more than 90% of the offline market. Among them, Blockbuster had more than 60,000 employees in total. More than 6,000 DVD distribution points have been constructed at home and abroad.

But in the new millennium, with news corporation and other capital entering the Hollywood market one after another, and Internet giants such as Google and Amazon also seeing the huge potential of the content market, it has already become a pattern of multiple strong co-existence, because Bestda cannot keep up with the trend , personnel bloated, difficult to manage, and declined rapidly.

In other words, there are many channel providers in the content market, and they all have strength, but the status of studios has risen instead, and even high-quality content has become more sought after.