Good morning. 🔥 A heat wave is spreading through about two-thirds of the United States. Know your heat index.

⛳ For those of you staying inside, the British Open is already under way on the Golf Channel and NBC.

Join the Market.

Reed Hastings on the throne

Moving the Market: Reed Hastings, once thought of as the great Hollywood disruptor, is now the vulnerable king in a contest where his rivals are emulating his distribution model in order to regain power. The days of Netflix shaking up Hollywood are over. Instead, Hollywood is now trying to unseat Netflix.

• Netflix's ability to combine its unique tech platform with good content "is the winning paradigm," Jeffrey Katzenberg tells me. "The question is... can Hollywood [and other] content companies build a state of the art platform/product and user experience."

This is not a foregone conclusion: New entrants into the streaming space like Disney and AT&T's WarnerMedia have emphasized their massive content portfolios, but they have yet to prove that their distribution platforms can match Netflix's for ease and convenience.

• Netflix's biggest challenge is content, as I explain here. It needs to create new original hits in order to compete with the new services and offset the loss of popular shows being taken back by its rivals.

• For Disney and WarnerMedia, the challenge is the opposite: They have the content and intellectual property, but they need to develop successful distribution platforms that match or best Netflix.

Not every media company getting into streaming will be able to create successful platforms. As Stratechery's Ben Thompson notes, "most content companies simply don’t have the business model or stomach for building a sustainable streaming service."

• If and when those companies fail, Thompson adds, they'll likely go back to licensing their content. And "Netflix has a massive advantage" in that regard "thanks to the user base it already has."

• "To use an entertainment industry analogy, we are entering the time period of The Empire Strikes Back," Thompson writes, "but the big difference is that it is Netflix that owns the Death Star."

The big picture: "You can have great content," Katzenberg tells me, "but if you don’t have the ability to access and serve your customers in a convenient [way] and an attractive price/value proposition, you won’t be competitive."

Netflix enters 'ratings hell'

Talk of Tinseltown: Bloomberg's Tara Lachapelle rightly notes that Netflix investors are about to become even more obsessed with the company's quarterly subscriber count as Disney, AT&T and others launch their rival streaming services in the months ahead.

• Investors will also want "more real data as far as how many people are watching Netflix’s costly originals – much in the way investors have picked apart the traditional media companies’ Nielsen viewership ratings."

The big picture: "Netflix, welcome to ratings hell. With last quarter’s weak showing, the video-streaming service gets to experience what the media giants went through."

• What's next: Disney+ launches on Nov. 12.

🇺🇸 Talk of the Trail 🇺🇸

Playing the field: Katzenberg and other Hollywood megadonors are giving the maximum $2,800 donation to the vast majority of Democratic contenders — at least 14 in Katzenberg's case — in order to ensure that the party nominates the best possible candidate.

• "The entertainment industry has donated more than $2.2 million to Democratic presidential candidates so far this year," according to a Los Angeles Times analysis of campaign finance reports.

Adam Neumann cashes out

Worrying the workspace: "WeWork co-founder Adam Neumann has cashed out more than $700 million from the company ahead of its initial public offering through a mix of stock sales and debt," WSJ's Eliot Brown, Maureen Farrell and Anupreeta Das report.

• The big picture: It's "an unusually large sum given that startup founders typically wait for the IPO to monetize their holdings," and raises questions about Neumann's confidence in the company.

• "On the other hand, people close to Mr. Neumann say, his borrowings against some of his WeWork shares indicate that he is bullish on the company’s long-term prospects."

What's next, via WSJ's Christopher Mims: Neumann "is set for life on a scale beyond 99% of even the most successful startup founders, no matter how hard his company crashes and burns in any potential real estate downturn."

Market Links

• Satya Nadella drives record revenue at Microsoft (WSJ)

• Randall Stephenson weighs sale to pay down debt (Bloomberg)

• Mike Reed nears a Gannett-GateHouse merger (WSJ)

• Tim Sweeney branches out into video programming (THR)

• Kevin Reilly unveils the HBO Max content team (Variety)

• Daniel Ek gives love to the Disney music catalogue (Reuters)

The Jeffrey Epstein test, con't

Friends like these: Last week, I wrote that Jeffrey Epstein’s close ties to America's rich, powerful and famous ⁠meant that "many high-profile politicians, business leaders and public figures" might "soon be called to account for their relationships with a man whose bad reputation long preceded his most recent indictment."

• Now, investigative journalist Nick Bryant tells Vanity Fair's Joe Pompeo that there's "a road map to that network... in Epstein’s now-infamous black book, filled with many bold-faced names... from Donald Trump, Bill Clinton and Ehud Barak to Alec Baldwin, Ralph Fiennes, Mick Jagger and even Courtney Love."

• “It is a mosaic of Epstein’s social contacts,” Bryant says.

The big picture: "If Epstein talks, there’s gonna be a lot of powerful people who could go down. It’s really contingent upon how far the Department of Justice wants to take this."

What next: The Weekend.

See you Monday.