Reed Hastings in conversation with Chris Anderson, editor of Wired Magazine, about "the Netflix effect." The men discuss several themes highlighted by the emergence of Netflix in video rental.

Regarding the Netflix business, Hastings makes several points. He says Netflix allows the consumer find their own taste. The company does not have "studio envy"; it doesn't want to produce movies. He believes it is helpful to niche markets such as independent films, Bollywood in America, and Anime. Netflix does not do adult videos because "[Hastings] is a prude" (his words). He also discusses the mechanics of how Netflix works, both on the business and website avenues.

The men discuss the movie industry as a whole as well. Hastings discusses Netflix's relationship with its competitors: traditional rental shops, cable company video on demand, Amazon, and Tivo. Anderson questions Hastings on how the ills of the music industry relate to the movie industry; they discuss piracy/copying of movies at length.

The conversation ends with a discussion of education in California as Hastings sits on the state board. He claims the biggest problem with the schools is a lack of funding; that despite California having the highest paid teachers in the country, other areas of education are under-funded, such as counselors and computer supplies.