It’s a story so good it could have been a screenplay. In 2000, Reed Hastings and Marc Randolph sat down across from John Antioco, then CEO of video rental giant Blockbuster, and pitched him on acquiring their still unprofitable DVD-by-mail startup, Netflix, which at the time had around 300,000 subscribers. But when they told him their price—$50 million and the chance to develop and run Blockbuster’s online rental business—Antioco balked. It was a famously shortsighted business decision: By 2010, Blockbuster had filed for bankruptcy, and Netflix had stormed Hollywood with its entertainment streaming service
Now Netflix—a behemoth that has moved far beyond streaming others’ films and shows, with an estimated $18 billion content spend for 2025—is 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’s power structures: Jeff Bewkes, then CEO of Warner Bros. parent Time Warner, described that scenario in 2010 as “a little bit like, is the Albanian army going to take over the world?”
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–Warner 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.
It’s a trajectory that’s all the more impressive given the company’s scrappy, dotcom-era start. “Netflix should have never existed,” says Peter Supino, who analyzes the media and entertainment industries as managing director at Wolfe Research. “Their 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.”
To dominate streaming today, of course, is to dominate all of entertainment. And Netflix now has a market cap—almost $400 billion currently— that exceeds the combined value of legacy competitors Disney, Warner Bros. Discovery, Fox Corp., Paramount, and Lionsgate.
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—including a series of strategic U-turns. Netflix was never going to make original television shows and movies—until it ponied up an unprecedented $100 million for two seasons of House of Cards from executive producer David Fincher in 2011, sight-unseen without a pilot. Netflix didn’t care about password sharing—until it began vigorously enforcing a “one household” rule in 2023. Netflix was never going to introduce livestreaming or advertising—until 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.
“When one of your people does something dumb, don’t 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?”
Reed Hastings on leading with “context, not control.” From No Rules Rules: Netflix and the Culture of Reinvention, by Reed Hastings and Erin Meyer
And Netflix was never going to go all in on theatrical releases—until it decided to buy Warner Bros. and pledged to distribute its films to movie theaters. “We’ve built a great business, and to do that, we’ve had to be bold and continue to evolve,” co-CEO Ted Sarandos told investors on the call announcing the deal. “We can’t stand still. We need to keep innovating and investing in stories that matter most to audiences.”
Call it “innovating,” 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, Hastings offers guidelines for strategic pivots, pointing out: “The vast majority of firms fail when their industry shifts.” The former CEO, who kicked himself upstairs to chairman in 2023, attributes the company’s success to a culture that prioritizes innovation, motivates top performers, and has few controls, allowing Netflix “to continually grow and change as the world, and our members’ needs, have likewise morphed around us.”
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.
Netflix cofounder and ex-CEO Reed Hastings (left) with his successor, co-CEO Ted Sarandos.
Kevin Dietsch—Getty Images
A bolder approach has given Netflix the upper hand. “We were willing to take the risk that these other companies weren’t willing to take because they were so stuck on what made them successful in the first place,” says Jessica Neal, former chief talent officer at Netflix. This approach means also accepting what Neal calls “the tax” of sometimes disappointing customers in the short term, in service of a bigger goal. Case in point: Netflix’s 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
“Companies do [themselves] a massive disservice because they look at mistakes as failures, and we looked at mistakes as learning,” says Neal, who worked almost 12 years in talent-focused roles during two stints at Netflix. “But 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.”
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’s original business model remains in place. Yet remarkably, the company’s internal corporate culture remains relatively unchanged. It’s that work environment—and what Supino calls an “unsentimental culture”—that just might be its secret weapon.
Thousand-fold growth
Blockbuster turned down the opportunity to buy Netflix in 2000.
~300,000
Approximate number of subscribers to Netflix’s DCD-by-mail service in 2000
>300 million
Netflix’s 2025 streaming subscribers, in over 190 countries Sources: Netflix, Media Reports
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 “context, not control,” and a commitment to candor, even (or especially) when it’s uncomfortable.
As Hastings’s book acknowledges, Netflix’s culture is weird. The company doesn’t keep track of vacation or expenses. It champions internal transparency around performance data and executive salaries. And to ensure it’s only employing people at the top of their game, the company famously applies a “keeper test”—essentially an employee review where bosses ask themselves, “If X wanted to leave, would I fight to keep them?”—to 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’s original chief talent officer and one of the architects of its corporate culture.
“We were very focused on feedback and having tough conversations that people don’t want to have,” says Neal. “And we believed that telling the truth to somebody was actually caring, and it was uncaring to do the opposite.” This helps teams communicate during rough patches, she says: “We actually were able to navigate those things much more effectively because we were able to talk about the tough stuff.”
Take the moment, all those years ago, when Time Warner’s CEO shrugged Netflix off as the “Albanian army.” 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 “with pride.”
Even back then, they knew they’d eventually get their Hollywood ending.
This article appears in the February/March issue of Fortune with the headline “How Netflix swallowed Hollywood.”
The mayor of Minneapolis said Sunday that sending active duty soldiers into Minnesota to help with an immigration crackdown is a ridiculous and unconstitutional idea as he urged protesters to remain peaceful so the president won’t see a need to send in the U.S. military.
Daily protests have been ongoing throughout January since the Department of Homeland Security ramped up immigration enforcement in the Twin Cities of Minneapolis and St. Paul by bringing in more than 2,000 federal officers.
Three hotels where protesters have said Immigration and Customs Enforcement officers were staying in the area stopped taking reservations Sunday.
In a diverse neighborhood where immigration officers have been seen frequently, U.S. postal workers marched through on Sunday, chanting: “Protect our routes. Get ICE out.”
Soldiers specialized in arctic duty told to be ready
The Pentagon has ordered about 1,500 active-duty soldiers based in Alaska who specialize in operating in arctic conditions to be ready in case of a possible deployment to Minnesota, two defense officials said Sunday.
The officials, who spoke on condition of anonymity to discuss sensitive military plans, said two infantry battalions of the Army’s 11th Airborne Division have been given prepare-to-deploy orders.
One defense official said the troops are standing by to deploy to Minnesota should President Donald Trump invoke the Insurrection Act.
The rarely used 19th century law would allow the president to send military troops into Minnesota, where protesters have been confronting federal immigration agents for weeks. He has since backed off the threat, at least for now.
“It’s ridiculous, but we will not be intimidated by the actions of this federal government,” Minneapolis Mayor Jacob Frey told CNN’s State of the Union on Sunday. “It is not fair, it’s not just, and it’s completely unconstitutional.”
Thousands of Minneapolis citizens are exercising their First Amendment rights and the protests have been peaceful, Frey said.
“We are not going to take the bait. We will not counter Donald Trump’s chaos with our own brand of chaos here,” Frey said.
Gov. Tim Walz has mobilized the Minnesota National Guard, although no units have been deployed to the streets.
Some hotels close or stop accepting reservations amid protests
At least three hotels in Minneapolis-St. Paul that protesters said housed officers in the immigrant crackdown were not accepting reservations Sunday. Rooms could not be booked online before early February at the Hilton DoubleTree and IHG InterContinental hotels in downtown St. Paul and at the Hilton Canopy hotel in Minneapolis.
Over the phone, an InterContinental hotel front desk employee said it was closing for the safety of the staff, but declined to comment on the specific concerns. The DoubleTree and InterContinental hotels had empty lobbies with signs out front saying they were “temporarily closed for business until further notice.” The Canopy hotel was open, but not accepting reservations.
The Canopy has been the site of noisy protests by anti-ICE demonstrators aimed to prevent agents from sleeping.
“The owner of the independently owned and operated InterContinental St. Paul has decided to temporarily close their hotels to prioritize the safety of guests and team members given ongoing safety concerns in the area,” IHG Hotels & Resorts spokesperson Taylor Solomon said in a statement Sunday. “All guests with existing reservations can contact the hotel team for assistance with alternative accommodations.”
Earlier this month, Hilton and the local operator of the Hampton Inn Lakeville hotel near Minneapolis apologized after the property wouldn’t allow federal immigration agents to stay there. Hampton Inn locations are under the Hilton brand, but the Lakeville hotel is independently operated by Everpeak Hospitality. Everpeak said the cancelation was inconsistent with their policy.
US postal workers march and protest
Peter Noble joined dozens of other U.S. Post Office workers Sunday on their only day off from their mail routes to march against the immigration crackdown. They passed by the place where an immigration officer shot and killed Renee Good, a U.S. citizen and mother of three, during a Jan. 7 confrontation.
“I’ve seen them driving recklessly around the streets while I am on my route, putting lives in danger,” Noble said.
Letter carrier Susan Becker said she came out to march on the coldest day since the crackdown started because it’s important to keep telling the federal government she thinks what it is doing is wrong. She said people on her route have reported ICE breaking into apartment buildings and tackling people in the parking lot of shopping centers.
“These people are by and large citizens and immigrants. But they’re citizens, and they deserve to be here; they’ve earned their place and they are good people,” Becker said.
Republican congressman asks governor to tone down comments
A Republican U.S. House member called for Walz to tone down his comments about fighting the federal government and instead start to help law enforcement.
Many of the officers in Minnesota are neighbors just doing the jobs they were sent to do, House Majority Whip Tom Emmer told WCCO-AM in Minneapolis.
“These are not mean spirited people. But right now, they feel like they’re under attack. They don’t know where the next attack is going to come from and who it is. So people need to keep in mind this starts at the top,” Emmer said.
Across social media, videos have been posted of federal officers spraying protesters with pepper spray, knocking down doors and forcibly taking people into custody. On Friday, a federal judge ruled that immigration officers can’t detain or tear gas peaceful protesters who aren’t obstructing authorities, including when they’re observing the officers during the Minnesota crackdown.
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Contributing were Associated Press writers Konstantin Toropin in Washington; Steve Karnowski in Minneapolis; Edith M. Lederer at the United Nations; Jeffrey Collins in Columbia, South Carolina; and Christopher Weber in Los Angeles.
At least eight more countries say the United States has invited them to join President Donald Trump’s Board of Peace, a new body of world leaders meant to oversee next steps in Gaza that shows ambitions for a broader mandate in global affairs. Two of the countries, Hungary and Vietnam, said they have accepted.
A $1 billion contribution secures permanent membership on the Trump-led board instead of a three-year appointment, which has no contribution requirement, according to a U.S. official who spoke on condition of anonymity about the charter, which hasn’t been made public. The official said the money raised would go to rebuilding Gaza.
Hungarian Prime Minister Viktor Orbán has accepted an invitation to join the board, Foreign Minister Péter Szijjártó told state radio Sunday. Orbán is one of Trump’s most ardent supporters in Europe.
Vietnam’s Communist Party chief, To Lam, also has accepted, a foreign ministry statement said.
India has received an invitation, a senior government official with knowledge of the matter said, speaking on condition of anonymity as the information hadn’t been made public by authorities.
Australia has been invited and will talk it through with the U.S. “to properly understand what this means and what’s involved,” Deputy Prime Minister Richard Marles told Australian Broadcasting Corp. on Monday.
Jordan, Greece, Cyprus and Pakistan said Sunday they had received invitations. Canada, Turkey, Egypt, Paraguay, Argentina and Albania have already said they were invited. It was not clear how many have been invited in all.
The U.S. is expected to announce its official list of members in the coming days, likely during the World Economic Forum meeting in Davos, Switzerland.
Those on the board will oversee next steps in Gaza as the ceasefire that took effect on Oct. 10 moves into its challenging second phase. It includes a new Palestinian committee in Gaza, the deployment of an international security force, disarmament of Hamas and reconstruction of the war-battered territory.
In letters sent Friday to world leaders inviting them to be “founding members,” Trump said the Board of Peace would “embark on a bold new approach to resolving global conflict.”
That could become a potential rival to the U.N. Security Council, the most powerful body of the global entity created in the wake of World War II. The 15-seat council has been blocked by U.S. vetoes from taking action to end the war in Gaza, while the U.N.’s clout has been diminished by major funding cuts by the Trump administration and other donors.
Trump’s invitation letters for the Board of Peace noted that the Security Council had endorsed the U.S. 20-point Gaza ceasefire plan, which includes the board’s creation. The letters were posted on social media by some invitees.
The White House last week also announced an executive committee of leaders who will carry out the Board of Peace’s vision, but Israel on Saturday objected that the committee “was not coordinated with Israel and is contrary to its policy,” without details. The statement by Prime Minister Benjamin Netanyahu’s office was rare criticism of its close ally in Washington.
The executive committee’s members include U.S. Secretary of State Rubio, Trump envoy Steve Witkoff, Trump’s son-in-law Jared Kushner, former British Prime Minister Tony Blair, World Bank President Ajay Banga and Trump’s deputy national security adviser Robert Gabriel, along with an Israeli business owner, billionaire Yakir Gabay.
Members also include representatives of ceasefire monitors Qatar, Egypt and Turkey. Turkey has a strained relationship with Israel but good relations with Hamas and could play an important role in persuading the group to yield power in Gaza and disarm.
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Boak reported from West Palm Beach, Florida. Associated Press writers Justin Spike in Budapest, Hungary, Rajesh Roy in New Delhi and Rod McGuirk in Canberra, Australia, contributed to this report.
The greenback dropped while precious metals rallied Sunday as financial markets started reacting to President Donald Trump’s new tariff threats.
The dollar sank 0.31% against the euro to $1.16 and tumbled 0.32% against the yen to 157.58. Meanwhile, gold rose 1.95% to a fresh record of $4,684.30 per ounce. Silver jumped 5.66% to $93.53, also a new high.
Due to the Martin Luther King Jr. Day holiday on Monday, U.S. stock and bond futures were inactive.
On Saturday, Trump said Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland will be hit with a 10% tariff starting on Feb. 1 that will rise to 25% on June 1, until a “Deal is reached for the Complete and Total purchase of Greenland.”
The announcement came after those countries sent troops to Greenland this past week, ostensibly for training purposes, at the request of Denmark.
Trump has refused to back down from taking over Greenland, even keeping military options on the table, while the administration has also left open the possibility of buying the island.
At the same time, the European Union is weighing options for retaliation, including the bloc’s anti-coercion instrument that has been described as a “trade bazooka” for its scope and severity.
Not only do Trump’s latest tariffs pose an existential threat to the trans-Atlantic alliance, the fallout could threaten the dollar’s dominance and so-called exorbitant privilege.
“The dollar’s reserve-currency status allows us to live beyond our means. Soaring debt, tariffs, and military threats jeopardize that status,” Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, warned on X. “When it’s lost, economic collapse will follow.”
And the EU holds significant leverage over Trump as European countries own $8 trillion of U.S. bonds and equities, almost twice as much as the rest of the world combined, according to George Saravelos, head of FX research at Deutsche Bank.
America’s vulnerability in global financial markets was not lost on Rep. Thomas Massie, R-Ky., who reacted to Schiff’s post.
“As the dollar’s reserve currency status diminishes, so does our ability to tax the world by creating more money,” he wrote. “When reserve status is lost, maintaining current spending levels and servicing the debt will be even more painful for Americans who will bear the full inflation tax.”
Politics8 years ago