Netflix co-CEO Ted Sarandos has recalled a defining moment in the company’s history, the decision to commit $100 million to House of Cards without first seeking approval from founder Reed Hastings.
Speaking in CNBC’s Leaders Playbook interview, Sarandos said the move, which involved committing to two full seasons of the political drama, was a calculated risk that ultimately reshaped Netflix’s future as a streaming powerhouse.
At the time, Netflix was still transitioning away from its DVD-by-mail business. Sarandos said Hastings questioned the scale of the investment, prompting a candid explanation of the risk involved.
“When he asked me, ‘Why would you do that?’ I said, ‘Reed, it’s a simple risk-reward for me. If this show fails, we will have dramatically overpaid for a show. We do that all the time. But if it succeeds, we could completely transform the business as we know it,’” Sarandos said.
The gamble paid off. House of Cards became Netflix’s first major original series and as it marked its shift into premium original programming, helping redefine the streaming industry.
Lessons in leadership and trust
Sarandos, who has joined Netflix in 2000, said that the experience shaped his leadership philosophy. He credited Hastings for teaching him the importance of trusting talented people rather than micromanaging decisions.
“The lesson he’s left for me is that you pick the best people, give them the tools to do the best work of their life, and get out of their way,” Sarandos said.
He also spoke about his unconventional approach that helps in learning leadership. Unlike many executives, Sarandos said he rarely reads management books. Instead, he turns to fiction.
Also Read | Hungarian filmmaker Béla Tarr, pioneer of 'slow cinema', passes away
One of the books he revisits repeatedly is Typhoon, a 1902 novel by Joseph Conrad. The story follows a steamship captain navigating a violent storm at sea, which Sarandos described as one of the most powerful leadership narratives he has encountered.
“When I first read it about 20 years ago, I thought the captain was reckless,” he said. “When I read it now, I see a deeper lesson about how leaders handle conflict, uncertainty and decisions that don’t always go as planned.”
Sarandos added that leadership, in business or life, is ultimately tested not by success alone, but by how one manages setbacks and unexpected outcomes.
