How a Netflix-Warner deal would change everything in Hollywood—again

was far different from the norm in Hollywood.

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Executives embraced radical candor, paid staff handsomely and viewed high turnover as a sign of success. Managers were told to embrace a “ keeper test ” when it came to staff. If an employee wasn't worth fighting to keep, out they went.When Netflix first launched its streaming service in 2007, big studios eagerly licensed their TV shows and movies to the platform. It was fresh revenue and there was a little concern that they were helping build a beast that would soon be a danger.

Asked whether Netflix was a threat to Hollywood, thenTime Warner Chief Executive Jeff Bewkes said it was “a little like the Albanian army is going to take over the world.”

On Friday he said the remark was “unfortunately flippant,” and made when Time Warner, Warner Bros.’ parent company, had just emerged from its disastrous AOL merger and he didn’t want to admit how big of a concern Netflix actually was.

Much of Hollywood viewed Netflix in its early days as an outsider that wouldn’t grasp the alchemy of making a hit show. It paid huge sums to persuade creatives to take the leap.

It made a two-season commitment to the political drama “House of Cards” to woo the project away from HBO. That show became the streamer’s first big original success, followed by “Orange Is the New Black.”