Echoes of Hollywood

In a reception room at Death Star Tower, Reed Hastings sat on the sofa, chatting enthusiastically with CAA agent Bill Rossis, waiting for the director's arrival. With five minutes to go until the scheduled meeting time, the door opened, and a tall, well-dressed young man walked in. Reed Hastings immediately stood up, recognizing the face. The young man quickened his pace and flashed a polite smile.

Eager to make a good impression, Reed Hastings stepped forward and extended his right hand. "Hi, Murphy, good to see you again."

"Hello, Reed."

Murphy shook his hand firmly. They had met before.

Bill Rossis walked over, "Let's sit down and talk."

The three of them sat on adjacent sofas. Reed Hastings began with a smile, "I heard your new film has completed post-production, Murphy. Netflix would love to secure the online rental rights. I'm calling dibs."

"We've always had a good partnership." Murphy also smiled, "But the rights for this film aren't held by Stanton Studios. You'll need to talk to 20th Century Fox."

Reed Hastings, aware of the value of this prominent Hollywood director, continued, "We can extend the current rights agreement between Netflix and Stanton Studios."

Several of Stanton Studios' films, like "Gone Girl," were hot commodities in the online rental market.

"No problem." Murphy adjusted his posture, "I'll have the head of Stanton Studios contact you."

Watching Murphy and Reed Hastings chat amicably, Bill Rossis mostly remained silent, speaking only when Murphy needed him to.

Murphy had received detailed information about Reed Hastings from Bill Rossis. With his personality, Murphy wouldn't underestimate the man.

Years ago, Reed Hastings had approached Murphy, but Netflix was not yet mature enough in content production. So, Murphy had postponed their collaboration and acquired the adaptation rights to that political novel.

Sometimes things follow a certain trajectory. In August this year, Netflix contacted Bill Rossis again, not only wanting to continue their collaboration with Murphy but also eyeing the adaptation rights to that political novel, aiming to turn it into a series to pave the way for content production.

Murphy knew Netflix was a highly ambitious company with considerable strength.

Especially Reed Hastings, who, despite his current enthusiasm, was indeed an impressive person.

Last November, Reed Hastings was named "Businessperson of the Year" by Fortune magazine for successfully transitioning Netflix from a DVD rental business to an online video streaming service.

In April this year, he ranked third in Time magazine's "100 Most Influential People in the World."

Apart from founding Netflix and serving as its co-chairman and CEO, Reed Hastings was also a board member of Microsoft.

From any perspective, he was a successful individual. Murphy was well aware of this and wouldn't underestimate Netflix just because Reed Hastings needed something from Stanton Studios.

Moreover, Netflix was seen as a company with the potential to revolutionize Hollywood's distribution industry.

In many people's eyes, Netflix's model was the future of the film industry.

On the North American internet, a story about Netflix was widely circulated: A long time ago, there was a company called Blockbuster that dominated the rental business for many years.

Reed Hastings once rented a DVD from them and was hit with a hefty late fee. He was so furious that he went to the gym, where he found the membership model appealing—members had to pay regardless of how often they used the service.

Unfortunately, Reed Hastings was a software engineer with a penchant for world-changing ideas. With some startup capital at hand, he founded Netflix in his fury, also in the rental business, but with no late fees and a membership model.

Thirteen years later, Netflix drove Blockbuster into bankruptcy, and Reed Hastings' revenge was complete.

This isn't to say Blockbuster was doomed; rather, it represented the past losing to the future. And clearly, Netflix was a future-oriented company.

"Murphy, I heard from Bill earlier," Reed Hastings looked at Bill Rossis, then continued to Murphy, "You intend to adapt Michael Dobbs' novel into a TV series and continue collaborating with Fox Cable Network."

"I do have that in mind." Murphy nodded.

This information was deliberately leaked by Bill Rossis to impress, given his successful collaboration with Fox Network on "Game of Thrones."

"Why not choose Netflix?" Reed Hastings confidently said, "Netflix has many advantages that traditional TV networks lack."

Murphy knew this, but he replied, "From initial release to sales and rentals, I'm concerned about Netflix's promotion and distribution model. The current internet bandwidth..."

Compared to his extensive knowledge of the film industry, Murphy's understanding of North American internet technology was superficial. Judging solely based on scattered online news would be unwise. This industry required thorough research and understanding, not casual assumptions.

Reed Hastings understood Murphy's concerns and said, "Netflix's technical team spent four years solving these issues. We have a specialized encoding program that tailors to each resource's characteristics, ensuring precision. Each film receives a unique algorithm, saving users 20% bandwidth while improving picture quality. Our engineers believe each episode, even within the same series, should have its own encoding."

Technical aspects were Murphy's main worry and the reason he postponed Netflix's invitation before. Poor viewer experience could ruin even the best films or series.

This was a genuine business deal, and Murphy had to consider his profit potential.

Murphy tapped his left index finger lightly on his middle finger, contemplating the collaboration with Netflix.

He could afford to wait, but Reed Hastings didn't want to. Netflix's situation wasn't as rosy as it seemed.

So he said, "Murphy, Netflix is very sincere about collaborating on this political drama."

After a brief pause, Reed Hastings made a decision, "I have a suggestion."

"Go ahead." Murphy turned to him.

Reed Hastings didn't hesitate, "Stanton Studios and Netflix each invest 50% in the production of this series. Netflix handles promotion and distribution. Netflix..."

He emphasized, "For the first two seasons, Netflix and Stanton Studios will split the profits 50-50, even before deducting Netflix's promotional and distribution costs!"

Hearing this, Bill Rossis looked up at Reed Hastings. Netflix was making significant concessions.

Murphy didn't expect Reed Hastings to be so determined, showing genuine willingness to collaborate.

Although both parties would invest 50%, Netflix would also handle promotion and distribution. Splitting the profits evenly...

"Let's do this..." Murphy thought for a moment, then said cautiously, "Reed, I need some time to consider."

Reed Hastings nodded, "No problem. But Murphy, can you give me a specific timeframe?"

Murphy stopped tapping his fingers, "Before December. I'll give you a definite answer by the end of this month."

Such favorable terms were indeed tempting.

"Good!" Reed Hastings saw that Murphy was more inclined to collaborate and stood up, "I hope we get the chance to work together!"

Murphy also stood up, extending his hand, "I hope so too."

Reed Hastings shook his hand, "I'll return to Netflix's headquarters now and prepare for our potential collaboration."

Murphy didn't respond directly but said, "I'll let Bill notify you once I've made my decision."

Despite the generous terms, Murphy wouldn't rush into a decision without thorough consideration. In the business world, deceit and trickery were rampant, and all capital pursued profit. He needed to understand why Reed Hastings and Netflix were making such concessions and ensure there were no hidden traps.

Murphy wasn't a naive child who would make hasty decisions.

After seeing off Reed Hastings, Murphy told Bill Rossis, "Get me detailed information on Netflix for the past two years, as detailed as possible."

After instructing Bill Rossis, Murphy called his lawyer, Robert, to gather more information about Netflix through various channels.

Netflix, being a public company with its main business in online streaming, had plenty of available data. By noon the next day, Murphy had gathered extensive information.

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