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Dealbook 2019

Reed Hastings draws fire

Moving the Market: Netflix chief Reed Hastings has come under fire after defending his decision to pull an episode of "Patriot Act With Hasan Minhaj" in Saudi Arabia because the kingdom complained about the comedian's criticisms of Crown Prince Mohammed bin Salman.

• "We're not in the news business. We're not trying to do truth to power. We're trying to entertain," Hastings said at the New York Times Dealbook Conference on Wednesday.

• "This was a truth to power thing" he said. "[It's] a quite justified critique of MBS, but that's just not our core brand. That's a news kind of thing. ... If you want to be an entertainment brand, it's really about sharing lifestyles."

The big picture: Hastings' remarks, which were widely criticized, come amid a larger debate about how American executives balance free speech values with their global corporate interests, particularly when doing business in countries like China and Saudi Arabia.

• NBA Commissioner Adam Silver has walked a fine line since Houston Rockets GM Daryl Morey backed pro-democracy protestors in Hong Kong, apologizing to Chinese fans while also defending free speech.

• Activision Blizzard chief Bobby Kotick suspended an esports gamer who voiced support for the protests.

• Marriott, Gap and the three major U.S. airlines have all apologized to China for websites or products that didn't correlate to Beijing's view of its sovereignty over Taiwan, Tibet and Hong Kong.

• Snap chief Evan Spiegel removed Al Jazeera from the Saudi Arabia version of its Discover platform after the kingdom said the news organization "violated its media and cybercrime laws."

What is exceptional about Hastings' defense is how transparent and unapologetic he is about Netflix's decision to meet the demands of the Saudi kingdom. Netflix had previously said they were simply complying with "a valid legal request."

• Hastings also justified the decision by highlighting Netflix's larger cultural influence: "We can accomplish a lot more by being entertainment and influencing a global conversation about how people live, rather than trying to be another news channel."

• And yet Hastings did draw a line on censorship: "If they came to us and said, ‘you can't have gay content,’ we wouldn't do that," he said. "We would not comply with that."

What's next: Look for Netflix to push the argument that cooperating with foreign governments allows them to operate in those countries and thus expose people to a much wider array of views and social issues than they might otherwise have access to.

Bloomberg/Getty

Dealbook 2019

Reed Hastings talks DTC wars

Talk of Tinseltown: Hastings also weighed in on the increasingly competitive direct-to-consumer landscape, praising Disney while appearing ambivalent about other services like Apple TV+ and Quibi, Jeffrey Katzenberg's forthcoming short-form play.

• On Disney+: "Disney's an amazing company and I think they are going to have great success. ... They really understand creativity. We learn, we observe, we watch them. We admire the heck out of them."

• On Apple TV+: We have "the most to learn from Disney."

• On Quibi: "That’s coming out next year some time?"

The big picture: Hastings said the measurement of success in the streaming wars won't be revenue, because Apple and Disney won't break that out in their quarterly earnings reports. "The real measurement will be time,” he said. “How do consumers vote with their evenings."

• Bonus: Over the course of the interview, Hastings said Netflix would not show ads, would not get into news, sports or video games, and would not create short-form content (like Quibi).

💰 Dealbook Top Talker 💰

Bill Gates, when asked if he would sit down with Elizabeth Warren to talk tax policy: "I don’t know how open-minded she is or if she’d even be willing to sit down with somebody who has large amounts of money."

• "I've paid over $10 billion in taxes. I've paid more than anyone in taxes. If I had to pay $20 billion, it's fine," Gates said. "But when you say I should pay $100 billion, then I'm starting to do a little math over what I have left over."

Elizabeth Warren, via Twitter: "I'm always happy to meet with people, even if we have different views. @BillGates, if we get the chance, I'd love to explain exactly how much you'd pay under my wealth tax. (I promise it's not $100 billion.)"

Michael Cohen/Getty

Dealbook 2019

Political ad policy in spotlight

Big in the Bay, big in the Beltway: Dealbook's Andrew Ross Sorkin asked Hillary Clinton, Bill Gates and other guests to weigh in on the debate over Facebook and Twitter's differing approaches to lies in political advertising, which has been a hot-button issue in recent weeks.

• Hillary Clinton sided squarely with Twitter, which is banning political ads. "Twitter got it right," she said. "That should be the decision that Facebook makes as well. ... Figure out a better way to do it, or refrain from doing it."

• Bill Gates defended Facebook hosting political ads and said he disagreed with those "who believe private companies should make judgments." The real problem, he said, is microtargeting, which allows candidates to target narrow groups of users. "Targeting... should not be allowed," Gates said.

• Kevin Systrom, the co-founder of Instagram, said “there has to be some place in the middle" between Twitter and Facebook's respective approaches.

The big picture: As I reported earlier this week, Mark Zuckerberg has no intention of changing Facebook’s policy on candidate advertisements, which means the social network will not ban them or fact-check them. But he is open to the idea of limiting candidates' ability to microtarget.

• Meanwhile, WSJ's Emily Glazer reports that Google "has been holding internal meetings about changing its political ad policy and is expected to share more information with employees this week."

Market Links

• Xavier Becerra has been privately investigating Facebook (NBC)

• Mark Zuckerberg saw WhatsApp as a threat in 2014 (WSJ)

• David Drummond faces a sexual misconduct probe (CNBC)

• Rupert Murdoch posts a strong Fox earnings report (THR)

• Mark Thompson takes an advertising hit at the Times (NYT)

Michael Cohen/Getty

Dealbook 2019

Kim Kardashian on Instagram

Moving Menlo: Kim Kardashian West, another guest at Dealbook, said she supported Instagram's proposal "to remove 'likes' from posts as a mental health move," Dealbook's Sophia June reports.

• “It would be really beneficial," Kardashian West said. "I know the Instagram team has been having lots of inner conversations ... and is taking it really seriously, and that makes me happy.”

• Both Kardashian West and her mother, Kris Jenner, also said that bullying on social media was their top concern for future generations.

In a later interview, Systrom, the Instagram co-founder, called bullying "one of the toughest challenges for social media companies."

Mark Brown/Getty

Derek Jeter eyes Tribune deal

Talk of the locker: "Digital media company Minute Media is in talks to buy the Players’ Tribune, a website started by former baseball star Derek Jeter," Bloomberg's Liana Baker, Scott Soshnick and Sarah McBride report.

• The former New York Yankees shortstop "co-founded the Players’ Tribune in 2014 ... to give athletes a platform to connect with fans that bypasses traditional media."

• "The site has had viral posts including by basketball stars Kobe Bryant and Kevin Durant. ... Still, the site has struggled to draw consistent traffic."

• Minute Media, which was founded by Asaf Peled and owns sites like 90min and Mental Floss, has been buying up digital sports publications.

The big picture: "Growth-starved digital media companies have been merging in hopes of sparking a turnaround."

• What's next: "While the companies are in exclusive talks, there is no guarantee the discussions will lead to a deal."

🔔 What's next: Bob Iger reports Disney Q4 earnings today after the bell. T-minus five days til the launch of Disney+.

See you tomorrow.