Swept Away by the Stream

“Is the Albanian army going to take over the world?” Old-media conglomerates famously dismissed Netflix when it was a fledgling startup. Time Warner, Blockbuster: Where are they now?

April 22, 2022

Netflix co-founder Reed Hastings in 2002. Photo: Justin Sullivan, Getty Images

WHEN READING ABOUT THE MEDIA BUSINESS these days, there are some 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 delivering TV nowhere. Or that when the head of a mighty corporation says, of a pint-size digital competitor, “It’s a little bit like, is the Albanian army going to take over the world?”—the answer is going to surprise him.

BINGE TIMES: Inside Hollywood’s Furious Billion-Dollar Battle to Take Down Netflix
By Dade Hayes and Dawn Chmielewski
William Morrow

That was Jeffrey L. Bewkes, Time Warner’s CEO, famously dismissing the threat of Netflix in 2010. Ten years before, Time Warner had been the biggest media conglomerate of them all. But having sold itself to AOL in 2000 in a near-disastrous attempt to achieve digital competence, it went on to shed its cable-system subsidiary, its music colossus, its magazine empire and AOL itself before Mr. Bewkes, in 2018, sold what was left to AT&T for $85.4 billion. This month, AT&T offloaded WarnerMedia to Discovery Inc. for barely half that amount.

Books: Digital Life

Swept Away by the Stream

Binge Times, by Dade Hayes and Dawn Chmielewski

“Is the Albanian army going to take over the world?” Old-media conglomerates famously dismissed Netflix when it was a fledgling startup. Time Warner, Blockbuster: Where are they now?
The Wall Street Journal  |  April 22, 2022

After the Disruption

System Error, by Rob Reich, Mehran Sahami and Jeremy Weinstein

The digital transition was always going to be a messy one—look at the antitrust fights that followed the telephone during the analog era.
The Wall Street Journal  |  Sept. 23, 2021

The New Big Brother

The Age of Surveillance Capitalism, by Shoshana Zuboff

Tech companies have shown themselves to be increasingly cavalier with our personal data. Are we handing over too much information?
The Wall Street Journal  |  Jan. 14, 2019

The Promise of Virtual Reality

Dawn of the New Everything, by Jaron Lanier, and Experience on Demand, by Jeremy Bailenson

The story of VR, the most immersive communications technology since cinema, as told by two of its pioneers.
The Wall Street Journal  |  Feb. 6, 2018

When Machines Run Amok

Life 3.0, by Max Tegmark

The author was taken aback when he observed an AI program teach itself to play an arcade game—and play it much better than its human designers.
The Wall Street Journal  |  Aug. 29, 2017

The World’s Hottest Gadget

The One Device, by Brian Merchant

Apple’s iPhone—a 21st-century American icon—could not exist without the labors of Bolivian miners and Chinese factory workers.
The Wall Street Journal  |  June 30, 2017

Confronting the End of Privacy

Data for the People, by Andreas Weigend, and The Aisles Have Eyes, by Joseph Turow

We are at a hinge moment, when the relationship between people and their data will be defined for future generations.
The Wall Street Journal  |  Feb. 1, 2017

We’re All Cord Cutters Now

Streaming, Sharing, Stealing, by Michael D. Smith and Rahul Telang

What happens when media executives refuse to believe the Internet is a challenge to their businesses?
The Wall Street Journal  |  Sept. 7, 2016

Augmented Urban Reality

The City of Tomorrow, by Carlo Ratti and Matthew Claudel

Can smartphone connectivity and shared data solve the problems of crowded cities?
The New Yorker  |  July 29, 2016

Word Travels Fast

Writing on the Wall, by Tom Standage

Twitter and Facebook are just the latest incarnations of a tradition that dates back 2,000 years, Tom Standage says.
The New York Times Book Review  |  Nov. 3, 2013
The men who ran these conglomerates were a hubristic lot, chasing dominance in an analog industry while remaining utterly clueless about the coming digital tsunami. It was only a matter of file size: Music labels were already being gutted by the early aughts, but movie studios and television networks, whose output requires vastly more bandwidth, had another decade to contemplate the inevitable—not that it did them much good.
What happened when they met the Albanian army is the subject of Dade Hayes and Dawn Chmielewski’s Binge Times: Inside Hollywood’s Furious Billion-Dollar Battle to Take Down Netflix. Mr. Hayes is the business editor at Deadline; Ms. Chmielewski is an entertainment-business correspondent for Reuters.
The story begins in 1997, when a Silicon Valley computer scientist named Reed Hastings and a marketing manager named Marc Randolph launched a movie-rental company. Initially, customers would make their selections online and receive DVDs by mail. But when the dot-com bubble burst in 2000, Netflix was in trouble. As Mr. Randolph reported in his 2019 memoir That Will Never Work, he and Mr. Hastings were prepared to sell Netflix to Blockbuster—the Viacom subsidiary that dominated the U.S. movie-rental business at the time—for $50 million. That deal didn’t happen. A decade later, Blockbuster filed for bankruptcy.
At first, media executives saw Netflix as just another revenue stream, a distribution outlet along the lines of in-flight movies and pay-per-view. But after Netflix began offering a streaming option in 2007, and especially after it started commissioning original programming in 2013, they began to view it as a competitor. What they failed to see was that streaming changed the game completely: Suddenly “appointment TV” was a relic.
Binge Times has its moments, as when the authors describe John Stankey, the AT&T lifer who engineered the Time Warner purchase and is now AT&T’s chief executive. Stiff as a board in a business defined by schmooze, Mr. Stankey, the authors note, “hardly endeared himself to the creative community by casually referring to the films and TV shows they made as ‘tonnage.’”
Then there was film executive Jeffrey Katzenberg’s bungled attempt to capitalize on millennials’ perceived appetite for super-short-form entertainment. Known as Quibi (short for “quick bites”) and funded to the tune of $1.75 billion, Mr. Katzenberg’s startup offered “snackable content” in the form of high-production-value videos. Viewable only on cellphones, lacking the spontaneity and free-spiritedness of TikTok and plainly created by people with no feel for the target audience, Quibi became what the authors describe as “the app equivalent of New Coke: a vigorously marketed product that no one wanted.” But at least Mr. Katzenberg was trying something new. Until declining cable and satellite subscriptions and competition from Netflix forced their hand, most of the media executives you meet here were too busy trying to protect expiring business models to think about the future.
The story of Netflix barging into Hollywood’s china shop is one that cries out for a big, sweeping treatment that leverages the clash of outsize personalities. Unfortunately, Binge Times lurches from one company to another and one time period to another in a way that’s confusing, disjointed and strangely inert. When we do see people interacting with one another, it’s often to watch them scarf down canapés at a party.
And while the book can be good at pointing out less-than-obvious motivations—the role of executive bonuses in driving bad business decisions, for example—the authors show some peculiar lapses in judgment. Yes, the media moguls were wrong to set up executive fiefdoms that pitted one arm of the company against another, and Time Warner is a textbook example. But what are we to conclude when the example on offer is a lukewarm review of a Harry Potter movie from Warner Bros. that ran in Time Inc.’s Entertainment Weekly magazine? That the job of a magazine is to tout its corporate sibling’s films? Even at their worst, the people who ran Time Warner knew better than that.
Yet earlier this week, when Netflix stock dropped 35% in a single day on news that the service was losing subscribers, the schadenfreude was on full display in some quarters of Hollywood. The celebrants, many of whom had recently launched their own streaming operations, might have done better to wonder what a stumble by the market leader portends for their own services, most of them lackluster by comparison. Maybe people won’t want to pay for a host of me-too offerings from conglomerates they can’t even keep track of? It’s a scary thought—almost as scary as having to fend off an outfit from Silicon Valley that doesn’t do business the way you’ve come to expect. ◼︎

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