Netflix’s Ted Sarandos Interview with Anupama Chopra | Film Companion

Summary

In this insightful interview, Netflix co-CEO Ted Sarandos discusses the company's journey through a tumultuous year, including subscriber losses and a stock price plunge, to a remarkable recovery with record subscriber growth. He emphasizes the importance of diverse, high-quality content that caters to varying tastes and moods, highlighting Netflix's global hits like 'Stranger Things' and 'Wednesday.' Sarandos also addresses the streaming wars, the company's content strategy, and its commitment to local storytelling in markets like India, while sharing his vision for the future of streaming and the impact of Netflix on the entertainment industry.

Takeaways

• 🎬 Netflix's commitment to diverse content: The company aims to cater to a wide range of tastes and moods, ensuring there's something for everyone.
• 📉 A challenging year for Netflix: In 2022, Netflix experienced a loss of subscribers and a drop in stock prices, but ended the year with a significant gain, adding 7.5 million subscribers in December.
• 🌐 Global success through local focus: Netflix believes in creating content that is authentic to the local audience first, which then has the potential to become globally popular, as seen with 'Squid Game'.
• 🤝 Leadership change: In January 2023, co-founder Reed Hastings stepped down after two decades, and the company now has co-CEOs, including Greg Peters.
• 💡 Prioritizing consumer engagement: Netflix's top priority is engagement, focusing on how, when, and where people watch their content, as it is a leading indicator of success.
• 🏆 Oscars and global recognition: Netflix content, including Indian productions, is gaining international recognition, with nominations and discussions around films like 'RRR' and 'Gangubai'.
• 📊 Measuring success beyond subscriber numbers: Netflix emphasizes that success is not just about the number of subscribers but also about engagement, revenue, and profit.
• 🚀 Growth through resilience: The company has faced challenges but has shown resilience, learning from past experiences and adapting to changes in the market.
• 🌍 Expansion in India: Netflix India has grown significantly, producing a wide range of original content and gaining a better understanding of local tastes and storytelling.
• 💸 High content spending: Netflix's content budget is massive, even surpassing the defense budget of Sweden, reflecting the company's commitment to creating a wide variety of content.
• 📈 Future outlook: Despite the ups and downs, Netflix remains optimistic about the future of streaming, with a focus on profitability and meeting consumer demands for on-demand content.

Q & A

What is the main challenge that Netflix faces when it comes to content selection for its diverse audience?

The main challenge is catering to the vastly different tastes and moods of its audience, ensuring there is content for all preferences and situations.

How does Netflix's spending on content compare to the defense budget of Sweden?

Netflix spends more on content than the defense budget of Sweden, with its content budget being around 17 billion dollars.

What significant event happened on January 19th regarding Netflix's leadership?

On January 19th, Reed Hastings stepped down after two decades and handed over the reins to Co-CEO Greg Peters.

How did Netflix address the loss of subscribers and plummeting stock prices in 2022?

Netflix addressed these issues by focusing on reigniting growth through programming, starting with the release of popular series like 'Stranger Things' season four and the global phenomenon 'Wednesday'.

What are the three business metrics that Netflix considers most important for success in streaming?

The three business metrics are engagement (how people watch), revenue, and profit.

What is Netflix's stance on the current state of the streaming business and its profitability?

Netflix believes that the streaming business is great because it aligns with consumer desires and is moving away from traditional television and movie formats. Netflix is profitable in its streaming endeavors, unlike its major competitors.

How does Netflix approach content creation for a global audience?

Netflix aims to create content that is authentically local, which often ends up being successful globally, as seen with 'Squid Game' from Korea.

What is Netflix's strategy for content breadth and how has it evolved over time?

Netflix's strategy involves producing content across every genre and format, expanding from prestige dramas to a wide range of television and movie genres to cater to diverse tastes.

How has Netflix India's approach to content creation and audience engagement evolved?

Netflix India has grown by producing a wide range of original projects, understanding local tastes, and increasing engagement through shows like 'Trial by Fire' and 'The Romantics'.

What is the significance of Netflix's content budget and how does it plan to allocate it moving forward?

Netflix's content budget is significant, allowing for broad investment in content that people love. As markets grow, like India, they get a larger piece of the content budget to cater to local tastes.

How does Netflix view the importance of sports content in its platform, especially considering its historical significance in pay and broadcast television?

While sports have been important for traditional television, Netflix has proven it can build a large audience and business without relying on sports as a loss leader.

What was the impact of Netflix's 'Drive to Survive' show on Formula One's global audience?

The show significantly increased engagement with Formula One, demonstrating Netflix's ability to enhance viewer interest in sports through compelling storytelling.

How did Netflix respond to the challenges and negative press during its subscriber loss and stock price drop?

Netflix responded by focusing on resilience, not taking negative press too seriously, and continuing to prioritize its members and product quality.

What is Netflix's view on the future of streaming and its role in the entertainment industry?

Netflix sees streaming as the future of entertainment, with people increasingly moving away from traditional formats and towards on-demand streaming services.