When reading about business these days in the media, there are things you know without being told. You can be pretty sure that when a bunch of conglomerates come together to create something they call TV Everywhere, it will end up getting TV nowhere. Or that when the head of a powerful company says, of a small digital competitor, “It’s kind of like, is the Albanian army going to take over the world?” – the answer will surprise him.
It was Jeffrey L. Bewkes, CEO of Time Warner, who dismissed the threat from Netflix in 2010. Ten years prior, Time Warner was the biggest media conglomerate of them all. But after selling himself to AOL in 2000 in a near-disastrous attempt to gain digital proficiency, he then ditched his cable system subsidiary, his music colossus, his magazine empire and AOL himself before Mr. Bewkes, in 2018, only sold what was left to AT&T for $85.4 billion. This month, AT&T transferred WarnerMedia to Discovery Inc. for just half that amount.
The men who ran these conglomerates were a prideful lot, chasing dominance in an analog industry while remaining utterly unaware of the coming digital tsunami. It was just a matter of file size: music labels were already drained by the early years, but movie studios and TV networks, whose production requires a lot more bandwidth, had another decade to contemplate the inevitable, not that it did them much good.
What happened when they encountered the Albanian military is the subject of Dade Hayes and Dawn Chmielewski of “Binge Time: Furious Battle Billions Inside Hollywood for Netflix’s Take Down.” Mr. Hayes is the business editor at Deadline; Ms. Chmielewski is a business entertainment correspondent for Reuters.
Binge Times: Inside Hollywood’s furious billion-dollar battle to bring down Netflix
We may earn a commission when you purchase products through links on our site.
The story begins in 1997, when a Silicon Valley computer scientist named Reed Hastings and a marketing manager named Marc Randolph started a movie theater rental company. Initially, customers make their selection online and receive DVDs in the mail. But when the dot-com bubble burst in 2000, Netflix was in trouble. As Mr. Randolph reported in his 2019 memoir “It Won’t Work,” he and Mr. Hastings were prepared to sell Netflix Blockbuster—the Viacom subsidiary that dominated the U.S. movie-rental business at the time—for $50 million. This agreement did not take place. Ten years later, Blockbuster went bankrupt.
At first, media executives saw Netflix as another revenue stream, a distribution outlet along the in-flight and pay-per-view movie lines. But after Netflix started offering a streaming option in 2007, and especially after they started commissioning original programming in 2013, they started looking at it as a competitor. What they didn’t see as streaming was changed the game completely: Suddenly “rendezvous TV” was a relic.
“Binge Times” has its moments, such as when the writers portray John Stankey, the AT&T lifer who engineered the Time Warner purchase and is now AT&T’s chief executive. Stiff as a board of directors in a company defined by schmooze, Mr. Stankey, the authors note, “didn’t endear himself to the creative community by casually referring to the movies and TV shows they made. as “tonnage”. “
Then there was film director Jeffrey Katzenberg’s failed attempt to capitalize on millennials’ perceived appetite for super-short entertainment. Known as Quibi (short for “quick bites”) and funded to the tune of $1.75 billion, Mr Katzenberg’s startup offered “nibble content” in the form of high production value videos. Viewable only on cellphones, lacking the spontaneity and free-spiritedness of TikTok, and clearly created by people with no feelings for the target audience, Quibi has become what the authors describe as “the equivalent of the New Coke app: a vigorously marketed product that no one wanted.” But at least Mr. Katzenberg tried something new. Until declining cable and satellite subscriptions and competition from Netflix imposed their hand on them, most of the media executives you meet here were too busy trying to protect expiring business models to think about the coming.
The story of Netflix’s burst into Hollywood’s china shop is one that cries out for a big, sweeping treatment that takes advantage of the clash of plus-size personalities. Unfortunately, “Binge Times” lurches from one company to another and from one time period to another in a way that is confusing, disjointed and strangely inert. When we see people interacting with each other, it’s often to stare them down scarf at some of the couches.
And while the book may be good at pointing out less-than-obvious motivations — the role of executive bonuses in driving poor business decisions, for example — the authors show particular errors of judgment. Yes, media moguls have been wrong to create executive fiefdoms that pit one branch of business against another, and Time Warner is a classic example. But what are we to conclude when the example offered is a lukewarm review of a Warner Bros. “Harry Potter” movie. which was published in Time Inc.’s Entertainment Weekly magazine? That a magazine’s job is to tout the films of its corporate siblings? Even at worst, people who ran Time Warner knew better than that.
Yet earlier this week, when Netflix stock plummeted 35% in a single day on news that the service was losing subscribers, the schadenfreude was on full display in parts of Hollywood. Celebrants, many of whom had recently launched their own streaming operations, could have done better wondering what a stumble by the market leader portends for their own services, most of them sluggish by comparison. Maybe people won’t want to pay for a host of me too offers from conglomerates they can’t even keep track of? It’s a scary thought, almost as scary as having to fend off a Silicon Valley outfit that isn’t doing business like you’ve come to expect.
Mr. Rose is a senior fellow at Columbia University School of the Arts and the author, most recently, of “The Sea We Swim In: How Stories Work in a Data-Driven World.”
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8