Is the Albanian Army going to take over the world?

Saturday, October 29th, 2022

Back in December 2010, Jeffrey Bewkes, CEO of Time Warner, told the New York Times what he thought about the hype surrounding Netflix: “It’s a little bit like, is the Albanian Army going to take over the world? I don’t think so.”

It was the shot heard round the entertainment world:

By buying House of Cards, Netflix would change the market’s perception of what internet video businesses did. “Up until the moment we launched House of Cards,” Holland recalls, “everything that was made for the internet was webisodes — Funny or Die, people falling off horses or getting kicked in the nuts.” Other streamers like Hulu, says Holland, were making early investments in original programming, but it was what she considered “the Comedy Central space” — in other words, low rent. Netflix, they agreed, ought to begin by aiming high.

Because HBO was in hot pursuit, the only way Netflix was going to win was to make an astounding offer. At the time, in keeping with the new paradigm of tech investing, Netflix was selling its story to Wall Street based on rapid customer growth, not bottom-line performance.

The most important thing, according to the prevailing market view, was for tech disrupters to crush the incumbents. Wooing new customers with ludicrous prices that made little long-term economic sense beyond undermining competitors was not only tolerated, it was expected and rewarded. Traditional publicly traded media companies, by contrast, enjoyed no such leeway.

“There’s a thousand reasons not to do this at Netflix,” Sarandos told Fincher. “I want to give you one reason to say yes.” Sarandos and Holland outlined their plan to Fincher and MRC executives: Not only would there be no pilot required, but Netflix would commit to a two-season, 26-episode guarantee, which was unheard of. They also promised Fincher that they would not bog him down with any notes. He could make the show any way he saw fit. And then Netflix offered a staggering amount of money: $100 million for the two-season commitment.

“We made the richest offer that had been seen for something that hadn’t been made yet,” Holland says.

Their sales pitch worked. Fincher’s team chose to go with the streaming newcomer over HBO, the reigning king of home entertainment. Plepler and the programming team were stunned at Netflix’s two-year commitment. “We couldn’t do that,” Plepler says. “We didn’t have the financial flexibility to make that commitment.”

(From It’s Not TV: The Spectacular Rise, Revolution, and Future of HBO.)

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