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Speaker 1: Welcome to a special episode of Variety's Strictly Business podcast.

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Speaker 1: I'm Cynthia Littleton, co editor in chief of Arriety. It's Friday,

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Speaker 1: February twentieth. I was fortunate to spend some time today

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Speaker 1: with Ted Sarandos, co CEO of Netflix. Sarandos is unabashedly

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Speaker 1: on a campaign this week to support the deal that

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Speaker 1: his company reached in December to buy Warner Brothers and

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Speaker 1: HBO for nearly eighty three billion. Sirandos is forcefully speaking

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Speaker 1: out even as the board of WBD went back into

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Speaker 1: negotiations with rival suitor Paramount's Guidance this week. In Sirandos's view,

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Speaker 1: the seven day window for Paramount to impress BBD with

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Speaker 1: the better offer is a minor hurdle to the endgame.

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Speaker 1: In our interview, he's not shy about calling out what

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Speaker 1: he sees as quote misinformation end quote spread by the

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Speaker 1: Paramount's guidance team and its leader, CEO, David Ellison. Sirandos

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Speaker 1: is still playing his strategic cards close to the vest

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Speaker 1: when it comes to discussing what a post merger Netflix

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Speaker 1: WB HBO would look like, but he does offer some

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Speaker 1: glimpses of his vision for how the enlarged company would run.

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Speaker 1: He talks about competing with YouTube and how he felt

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Speaker 1: after losing out to them in the hunt for Academy

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Speaker 1: Awards TV rights, and of course, Sendos revisits his blood

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Speaker 1: oath regarding preserving the forty five day theatrical exhibition window

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Speaker 1: for Warner Brothers pictures titles. He also commits to maintaining

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Speaker 1: the existing paid download home entertainment window. In other words,

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Speaker 1: the movie won't stream on Netflix or HBO on day

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Speaker 1: forty six. We talk about a whole lot of other things,

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Speaker 1: so please give it a listen. It's Sirandos. Thank you

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Speaker 1: for making time.

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Speaker 2: For me today. Of course, good to see you, always ed.

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Speaker 1: Obviously, we don't need to recap. I know you've been

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Speaker 1: living this now for many months when the cap gun

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Speaker 1: went off on December fifth, when you went public with this,

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Speaker 1: saying that you didn't think that we would be sitting

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Speaker 1: here on Friday, February twentieth, still talking about the wrangling

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Speaker 1: over whether or not you wouldn't Warner Brothers will consummate

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Speaker 1: this deal and that Paramount Skydance would stills be in

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Speaker 1: the background and making a lot of.

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Speaker 2: Noise, yeah, over a deal that we have signed and

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Speaker 2: endorsed by the board unanimously and is getting ready to

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Speaker 2: go for shareholder approval. So it's a remarkable amount of

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Speaker 2: noise from Paramount around this since we announced that we

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Speaker 2: agreed to signed our deal. I guess it's probably cheaper

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Speaker 2: to make noise than it is to raise your bid.

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Speaker 2: So I think at every step of this process, I've

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Speaker 2: been super impressed with Warner Brothers Discoveries directness and clarity

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Speaker 2: about what the bid process would be and what you

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Speaker 2: had to cover to do it, and when you had

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Speaker 2: to do it, and what's the deadline and what state

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Speaker 2: those bids would have to take. And shocked that of

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Speaker 2: all people that complain about the process, Warner Brothers Discovery,

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Speaker 2: you know, had shared that multi they were multip bidders

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Speaker 2: and that and as you saw they shared in their filings,

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Speaker 2: Paramoun had missed every deadline they're bidding for, you know,

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Speaker 2: assets that weren't for sale. You know, there's there was

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Speaker 2: all this lack of clarity about what they were even offering.

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Speaker 2: That's the reason why we're having this seven day window

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Speaker 2: that we granted them was to bring some clarity to

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Speaker 2: the shareholders of Warner Brothers Discovery. So they knew what

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Speaker 2: our deal was, and they knew what these other deals

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Speaker 2: were because they were so noisy on that side. Our

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Speaker 2: deal is super simple. Twenty seven dollars and seventy five

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Speaker 2: cents a share plus the value of Discovery Global. That's

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Speaker 2: that's our deal is incredibly simple. All the other things,

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Speaker 2: what what Paramount is and isn't doing is completely not clear,

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Speaker 2: not clear to shareholders, not clear to us, not clear

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Speaker 2: to Warner Brothers Discovery. So we said, look, take this

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Speaker 2: seven days to try to get some clarity about what

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Speaker 2: they're saying.

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Speaker 1: I mean, I got to believe that there was a

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Speaker 1: candid assessment of this takes away a point that somebody

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Speaker 1: could raise in a shareholder lawsuit down the road. Was

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Speaker 1: that part of the calculation.

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Speaker 2: That's what I mean about complete certainty and clarity. That's

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Speaker 2: not that's not this not Let's say we didn't turn

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Speaker 2: over one last stone, which is say, will you please

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Speaker 2: clarify what this is?

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Speaker 1: Yeah, do you feel confident that, as as you know,

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Speaker 1: regulators and other and investors.

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Speaker 2: We didn't have to do this, as you know.

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Speaker 1: Was it a debate among the Netflix board or the

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Speaker 1: committee that is adjudicating all of this. Was it a

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Speaker 1: was it a vigorous debate?

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Speaker 2: It was a sign a I think it was a

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Speaker 2: sign of confidence and everyone agreed with that. And also

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Speaker 2: it was a an opportunity for you know, for clarity,

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Speaker 2: which everybody saw the value in and you know there's

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Speaker 2: going to be I didn't want a black cloud over

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Speaker 2: the decision. Did the board do it? You know, hear

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Speaker 2: people out, let's hear them out.

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Speaker 1: When did Warner Brothers come to you and say would

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Speaker 1: you consider this? Was it weeks ago? Was it days ago? Like?

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Speaker 1: How long did did Netflix folks consider whether to grant this?

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Speaker 2: Just a day or two? So, I mean, it wasn't

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Speaker 2: a I don't feel like it was a controversial thing.

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Speaker 2: I know, I know it's an unusual thing in the

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Speaker 2: bidding process. But the other thing we got in exchange

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Speaker 2: for it was we set a date for the shareholder meeting.

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Speaker 2: We'd bring this, bring this thing to a head.

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Speaker 1: Had setting that day, had that had there been hurdles

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Speaker 1: to that process before this latest round of Ellison negotiations happened, I.

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Speaker 2: Mean this process could go you know, could have gone

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Speaker 2: on until you know, the end of the regulatory process

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Speaker 2: for months and months and months. So yeah, this swicially

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Speaker 2: springs that piece of this piece of it, which is

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Speaker 2: getting the shareholders say off the table, so we can

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Speaker 2: keep moving forward on the regulatory process.

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Speaker 1: Just looking at the chest of this all, obviously the

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Speaker 1: world is waiting to see if paramounts guidance raises it's bien.

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Speaker 1: Have you thought at all you could also change the

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Speaker 1: stakes if you threw another dollar on the table? Would

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Speaker 1: Has that at all been a consideration?

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Speaker 2: It's the next move is up to somebody else. We

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Speaker 2: have We have a signed deal with Warner Brothers Discovery.

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Speaker 2: If someone wants to make a better deal, which Warner

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Speaker 2: Brothers Discovery board has said has not happened yet, then

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Speaker 2: we'll see what happens down the road. But just not

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Speaker 2: get ahead of that process. And it certainly wouldn't come

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Speaker 2: in on the bidding strategy anyway. But the core of

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Speaker 2: it is is, you know, we're super disciplined buyers, as

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Speaker 2: you probably we have a reputation for such so that

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Speaker 2: we'll you know, willing to willing to walk away and

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Speaker 2: let someone else overpay for things. We have a little

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Speaker 2: rich history of that.

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Speaker 1: That is the history that is much more so than

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Speaker 1: what you're doing now, and you know, advocating for a

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Speaker 1: very large deal. Obviously this is this is unfamiliar territory

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Speaker 1: for Netflix. Can we talk a little bit about and

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Speaker 1: I know, you know you can't reveal too much, but

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Speaker 1: things that were sort of generally talked about in all

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Speaker 1: the sec disclosures about this. Can you talk about the

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Speaker 1: process of getting to the price that you got to

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Speaker 1: that twenty seven dollars and change a share price? Like

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Speaker 1: it's so hard right now to put a value on

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Speaker 1: entertainment properties. What's the value of this show going to

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Speaker 1: be in ten years, twenty years, this movie in a

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Speaker 1: long time, when the potential spin off rights and all that.

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Speaker 1: What were some of the components that you used that

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Speaker 1: made you confident in the number that you got to

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Speaker 1: of almost eighty three billion.

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Speaker 2: Look, a lot of it is in the secret sauce

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Speaker 2: of the business. So I'm not going to go into

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Speaker 2: much rich detail on it, except for it was a

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Speaker 2: bottoms up process of valuing the properties, valuing the films,

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Speaker 2: valuing the series relative to price, relative to odians, all

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Speaker 2: those kind of things. And so for us, when we

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Speaker 2: looked at it, it is a culmination of our evaluation

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Speaker 2: work that we've do every day and we've been doing

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Speaker 2: since we started streaming.

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Speaker 1: When you acquire content at the scale that you do,

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Speaker 1: you do become pretty good at the actuarial tables for

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Speaker 1: comedies and dramas.

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Speaker 2: Proud of the teams that do that in terms of

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Speaker 2: the level of insight, and also that you know, there's

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Speaker 2: you know, it's it's a data project for sure, but

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Speaker 2: it's also richuly informed by intuition. You know that that

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Speaker 2: we have all this history of this is what this

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Speaker 2: revenue has been historically, but you know, is it monetized

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Speaker 2: to the best of its ability and the form that

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Speaker 2: it's in right now? So some that's where the gut

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Speaker 2: part comes in.

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Speaker 1: Well, as we sit here, Monday marks the end of

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Speaker 1: the seven day deadline, and if there is in fact

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Speaker 1: an agreement, if the Warner Brothers Discovery Board feels that

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Speaker 1: they have put a superior offer on the table, you

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Speaker 1: have a four day period to match it. At the

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Speaker 1: end of that, what is in your best case scenario,

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Speaker 1: what's the outcome?

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Speaker 2: Again, I don't want to get ahead of this whole process.

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Speaker 2: We we have the deal done, they have this window

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Speaker 2: of time to get to a place where they make

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Speaker 2: an offer that they can then evaluate that offer and

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Speaker 2: then we can decide if for what we want to do.

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Speaker 2: So that's let's just let it play out.

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Speaker 1: After Monday this morning, Paramount came out with the government

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Speaker 1: the heart Scott Rodino process that is part of every

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Speaker 1: regulatory review. They trumpeted that this is now completed. Obviously

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Speaker 1: that relates to a deal that they don't have in hand.

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Speaker 1: You have a deal in hand. Where does Netflix stand

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Speaker 1: with that process?

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Speaker 2: We're in the process. As you know, completing the HSR

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Speaker 2: request and waiting ten days is not the same as

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Speaker 2: being approved. That's turning in the homework. That's not getting

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Speaker 2: your passing grade. And they know that too. They get

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Speaker 2: from their their legal council used to be in the

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Speaker 2: Department of Justice, and it's on record saying that that

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Speaker 2: is that means nothing. It just means that you've filled

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Speaker 2: out the forms. Again, I think it's an unusual process

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Speaker 2: that Paramount takes, which you know, putting out a press

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Speaker 2: release that they met with a culture secretary. Maybe it's

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Speaker 2: that unusual for them to meet a culture minister that

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Speaker 2: they put out a press release. But we deal with

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Speaker 2: the culture ministers around the world every day. So we've

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Speaker 2: not talked about we're not taking out press releases about

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Speaker 2: our progress with the European regulators, but we are ongoing.

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Speaker 2: We're deep into the regulatory process. It is following traditional

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Speaker 2: DOJ you know, guide merger guideline rules that they've laid out.

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Speaker 2: There's nothing unusual happening in this process. And we knew

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Speaker 2: you've seen and we've said it a couple days ago.

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Speaker 2: We knew that they would come out and try to

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Speaker 2: make the HSRs some kind of a milestone, which it

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Speaker 2: is clearly not.

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Speaker 1: Just do you have any sense where the hurdles are

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Speaker 1: going to be, where the discussions or even potentially down

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Speaker 1: the road concessions in certain areas.

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Speaker 2: Yeah, we look at this whole thing and mostly I'm

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Speaker 2: a little surprised of most of the work we've been

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Speaker 2: doing is unringing the bells of a misinformation campaign. What

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Speaker 2: is our market share? I mean, the market share is

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Speaker 2: very clear. Nielsen publishes the market share constantly called the Gauge,

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Speaker 2: and show that we are nine percent of the business

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Speaker 2: and if you put HBO together with us, we're ten

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Speaker 2: percent of the b business. So this does not constitute

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Speaker 2: any you know, concentration of the business, and it certainly

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Speaker 2: is nowhere near monopoly, which you know, folk folks has

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Speaker 2: been batting around the last couple of days, you know,

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Speaker 2: which is fifty to seventy percent market share. It's insane.

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Speaker 2: There's no way you could dice the market up and

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Speaker 2: say that we are that. And there's also, I believe

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Speaker 2: no way that you could make it so narrow that

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Speaker 2: it wouldn't include things like YouTube. But let's just say,

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Speaker 2: for the sake of indulging fantasy, you take YouTube out

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Speaker 2: of that, we're not even twenty percent of the marketplace FORRESVOT.

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Speaker 2: So much of the work has been clearing up misconceptions

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Speaker 2: that have been intentionally put in the market.

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Speaker 1: By traditional metrics of these things, monopoly oligopoly. There is

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Speaker 1: definitely at the very high bar. But as you know,

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Speaker 1: just in the broader regulatory world and in media and

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Speaker 1: outside of media, you've seen both under Republican and democratic administrations,

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Speaker 1: a more aggressive regulatory world, a more aggressive FTC. Certainly,

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Speaker 1: this FCC is very very crusading, very and very aggressive.

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Speaker 2: Yeah, I think see Paramount and CBS. I've had to

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Speaker 2: deal with that. We know there because they have broadcast network.

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Speaker 1: I know you can't get into detail, but are you

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Speaker 1: to the stage of thinking of the concessions or the

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Speaker 1: things that you would places where you would give to

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Speaker 1: get a deal done.

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Speaker 2: Those are remedies for market to deal with market concentration.

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Speaker 2: We don't have anywhere near the market concentration risk that

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Speaker 2: would require those kind of remedies.

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Speaker 1: I want to talk about YouTube because I think that's

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Speaker 1: a really interesting point and also interesting for the broader

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Speaker 1: media ecosystem beyond this transaction. But you've used the word

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Speaker 1: misinformation obviously, and you know M and A processes are

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Speaker 1: famously aggressive. Do you feel like the Ellisons and that

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Speaker 1: the Paramounts Guidance Camp have done things that are below

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Speaker 1: the belt beyond an aggressive pursuit of an asset.

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Speaker 2: Yeah, I think that putting out information that's knowingly provably

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Speaker 2: wrong is pretty below the belt.

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Speaker 1: What provably wrong have they put out about Netflix?

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Speaker 2: I've had people to me parrot back information, you know,

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Speaker 2: sixty seventy percent market share, which is just obviously knowingly

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Speaker 2: provably wrong. I think much of the things you've heard

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Speaker 2: about woke content that came out of the Senate hearing,

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Speaker 2: I'm sure was given to them directly from Paramount communications

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Speaker 2: and policy people, and I think it's just meant to

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Speaker 2: distract from what we have, which is a superior offer.

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Speaker 2: And one way to try to defend your inferior offer

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Speaker 2: is to try to attack ours, and instead of just

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Speaker 2: making a superior offer yourself.

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Speaker 1: You've been very consistent about looking at a pretty simple

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Speaker 1: prism to interpret the deal. That you do the math

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Speaker 1: that Netflix would be absorbing assets that it doesn't. The

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Speaker 1: HBO Max is a little different, but it's certainly with

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Speaker 1: the Warner Brothers of it all. You do not have

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Speaker 1: an existing production infrastructure of that size and scale and

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Speaker 1: incredible asset, incredible library and all the things and Paramount does.

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Speaker 1: Obviously we've seen Paramount Kate. Paramount went through a transaction,

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Speaker 1: They went through some very difficult layoffs, and in doing

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Speaker 1: the math things that have been talked about in SEC disclosures,

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Speaker 1: you are seeing that the numbers have added up to

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Speaker 1: about sixteen billion in synergies that they are talking about

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Speaker 1: to make their numbers work.

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Speaker 2: Yeah, so in their offer, they and they're filings, they

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Speaker 2: talk about six billion dollars in synergies. That's cost savings.

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Speaker 2: You know that they're proposing in the deal. What they

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Speaker 2: are telling people who are lending them the money, and

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Speaker 2: they said themselves in December on the record too, that

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Speaker 2: they are going to take if they were able to

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Speaker 2: close this deal, they would end up with a business

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Speaker 2: at six to seven times levered. This is this would

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Speaker 2: be the largest LBO in history. And LBOs are inherently risky.

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Speaker 2: They have a very bad track record, even worse than

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Speaker 2: media mergers generally. But when you look at this and say, well,

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Speaker 2: what they're doing to try to give people some comfort

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Speaker 2: is saying that they intend to be two to three

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Speaker 2: times levered in as little as eighteen months. So to

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Speaker 2: do that, that is sixteen not six sixteen billion dollars

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Speaker 2: worth of cuts. Now, I don't know if it's sixteen

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Speaker 2: plus the six or talking about or there's six plus

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Speaker 2: ten to get to sixteen, but it is definitely at

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Speaker 2: least sixteen billion to delever that company. And their biggest

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Speaker 2: cost centers are production in people, so these are job cuts.

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Speaker 2: These are fewer productions and at the same time that

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Speaker 2: they're promising more production somehow, So it's a I don't

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Speaker 2: understand the deal, but except for I do know how

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Speaker 2: to count, and I do know that if you want

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Speaker 2: to de lever a company from seven times down to

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Speaker 2: two and a half times, it would cost at least.

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Speaker 1: That setting aside the pair amount of it all. Would

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Speaker 1: you commit to preservation of a certain amount of jobs,

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Speaker 1: committing to allocating a certain amount of resources.

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Speaker 2: As is, Cynthia, our whole business track record has been

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Speaker 2: about more about adding, about doing more, about add more jobs,

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Speaker 2: about more production, more film. Remember thet the Knock on

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Speaker 2: Netflix is always just too much to watch, too much

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Speaker 2: to watch. So this whole business model is contingent. The thing,

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Speaker 2: the reason we're buying this very expensive asset is because

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Speaker 2: it generates revenue that we don't currently make, and because

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Speaker 2: it we leave that putting these two companies together are

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Speaker 2: to our distribution model, our business model, that we could

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Speaker 2: better monetize those assets that they are being monetized today

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Speaker 2: and we need, but we need all those people to

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Speaker 2: keep making them. So are not proposing any cuts. We're

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Speaker 2: proposing to run Warner Brothers largely than it is today

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Speaker 2: television and film, and running HBO largely as it is today,

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Speaker 2: just giving it a better business model and better distribution.

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Speaker 2: And that's where the value in the deal is it's

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Speaker 2: not you know those media mergers, what Skydance, Paramount just did,

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Speaker 2: what Fox and Disney did a few years ago. This

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Speaker 2: is a classic horizontal media merger. You take two studios,

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Speaker 2: turn them into one, and cut all your costs in half,

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Speaker 2: and you know, make less, don't make more movies. So

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Speaker 2: in dis Disney Fox, they went from making over thirty

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Speaker 2: movies between them to making around twenty. So that's not

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Speaker 2: a big win for the town. Paramount is offering this

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Speaker 2: exact thing, which is are going to take Paramount and

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Speaker 2: Warner two of the five remaining large studios, crush them

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Speaker 2: down to one. Paramut put out like a half a

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Speaker 2: dozen movies last year. They're going to say there's somehow

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Speaker 2: they're going to go to thirty. So I don't see

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Speaker 2: how any of that makes sense. And you know, this

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Speaker 2: is a vertical merger, adding assets that we don't currently

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Speaker 2: have and having a balance sheet to continue to invest

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Speaker 2: in them.

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Speaker 1: You've been consistent in saying we're buying this not to

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Speaker 1: dismantle it. I do think the YouTube of it all

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Speaker 1: is fascinating because it does seem to be that it's

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Speaker 1: going to be very, if not pivotal, very important in

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Speaker 1: the regulatory process in any constant, any look at the

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Speaker 1: concentration of viewership, of audience share, market share, advertising, affiliate revenue.

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Speaker 1: But if a regulator asked you to, could you shook

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Speaker 1: that Netflix was watching YouTube as a competitor long before

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Speaker 1: the potential to buy Warner Brothers came into the picture.

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Speaker 2: You can go back to our quarterly earnings calls ten

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Speaker 2: years ago, and we identified YouTube as a potential competitor,

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Speaker 2: and we've talked about them in nearly every quarter since.

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Speaker 2: We definitely saw what this was going. We compete with

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Speaker 2: YouTube on the television screen for viewing, for advertisers, for

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Speaker 2: subscription dollurs, and for ad dollars. You look at that

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Speaker 2: and you say, and creators as well, and projects as well.

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Speaker 2: You know, we were bidding for the oscars, we were

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Speaker 2: bidding for the Brazil NFL football game, and that can

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Speaker 2: that's just going to continue to grow. So to me,

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Speaker 2: it's like you look at this and say, Okay, we're

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Speaker 2: The television screen itself is a zero sum game. When

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Speaker 2: you're on the screen, you cannot watch you know, two

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Speaker 2: apps at the same time. You can't watch broadcasts at

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Speaker 2: the same time you watch Netflix, And so when you

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Speaker 2: look at all the different the sea of choices that

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Speaker 2: a consumer has, broadcast, cable, all of the different direct

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Speaker 2: to consumer ad choices fast like two B and all

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Speaker 2: these things, and you add them all together, you'd say, well,

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Speaker 2: they don't do exactly this, and they don't do exactly that,

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Speaker 2: but that's what you're choosing to do tonight on your screen.

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Speaker 2: And then it's paid for, sometimes with advertising, sometimes with subscription,

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Speaker 2: but in either way it's to monetized and it's often

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Speaker 2: the same content, it's always the same viewer. So and

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Speaker 2: when I look at these things and think it's a

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Speaker 2: fantasy to say, here's the world of television, and it

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Speaker 2: doesn't include the thing that people spend the most time doing,

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Speaker 2: which is watching YouTube on TV. And I think people

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Speaker 2: also do track that this was a very deliberate move

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Speaker 2: for YouTube to move off of the phone where they

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Speaker 2: were getting knocked around by TikTok and go on to

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Speaker 2: the TV screen and compete there. So if you're if

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Speaker 2: they're there on the TV screen competing with Netflix, competing

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Speaker 2: with broadcast, competing with HBO, competing with CBS, then they

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Speaker 2: are on the TV and there are competitor and they're

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Speaker 2: part of the competitive landscape.

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Speaker 1: The milestone moment that we all wrote a lot about

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Speaker 1: for YouTube was early in twenty five they reached that

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Speaker 1: fifty percent.

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Speaker 2: That's not cat video, Cynthia. As you know, it's watching

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Speaker 2: Saturday Night Live on Sunday morning, it's watching original, original,

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Speaker 2: creative content. It's watching them one of the most important

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Speaker 2: live shows on television. The Oscars are going to be

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Speaker 2: exclusively on YouTube, and people want to make an argument

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Speaker 2: that they're not part of the television landscape.

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Speaker 1: And had you seen that in your own data in

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Speaker 1: terms of viewing patterns for people on Netflix. Had you

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Speaker 1: seen YouTube become a rising competitor.

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Speaker 2: Yeah, we've been watching them for ten years. We've been that.

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Speaker 2: We thought they would be a more likely competitor than

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Speaker 2: much of the traditional media companies who had to cut

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Speaker 2: their teeth on the technology side of the business too.

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Speaker 1: Were you disappointed about the Oscars, Yeah.

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Speaker 2: No, I'm glad. Look, I'm glad. I hope it's really

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Speaker 2: good and strengthened the Academy the deal that they got,

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Speaker 2: So I hope it's successful and we're thrilled about the

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Speaker 2: Saga wards next week.

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Speaker 1: There's been a lot of questions for you about Warner Brothers.

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Speaker 1: I want to talk a little bit about Hbo because

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Speaker 1: I think that is obviously a huge, huge component of

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Speaker 1: this deal and a big part of the issue, certainly

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Speaker 1: with the questions about concentration. Do you have a vision

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Speaker 1: does HBO Max itself go away? In a future where

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Speaker 1: you do come together.

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Speaker 2: We'll continue to distribute HBO Max as a standalone product,

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Speaker 2: and we'll also offer some ways that they can get

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Speaker 2: you can get it in conjunction with a Netflix subscription

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Speaker 2: as well. But I think in general, what it's really

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Speaker 2: important for this deal is that Hbo We're buying a

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Speaker 2: very respected brand and incredible content, and we just think

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Speaker 2: we can better distribute it under our deal. And I

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Speaker 2: do think if you look at the difference between the businesses,

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Speaker 2: you know they've been at this for a long time too.

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Speaker 2: And I have said this before about the naming mechanics, Well,

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Speaker 2: anyway from HBO and Hbo go Hbo, now HBO Max Max,

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Speaker 2: Hbo Max. And I said, look, when they get serious

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Speaker 2: about the business, they're going to just go by Hbo

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Speaker 2: because everyone loves Hbo. What I want to do in

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Speaker 2: this deal is make sure that Hbo can keep being

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Speaker 2: exactly what it is. It doesn't need to become a

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Speaker 2: general entertainment brand to get big. It needs to do

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Speaker 2: exactly what it's doing to get big, which is to

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Speaker 2: deliver great stories. And we have a rich history of

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Speaker 2: taking great stories and making them big. And we didn't

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Speaker 2: have to contort, you know, press these television into general

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Speaker 2: entertainment to do that. We do both press these television

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Speaker 2: and general entertainment.

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Speaker 1: But you would, just to be clear, you would keep

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Speaker 1: the HBO Max name alive and not just.

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Speaker 2: I don't know about the Max part. Remember we've always

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Speaker 2: just used Netflix. We never warre Netflix Plus or Netflix

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Speaker 2: Max or any of those things. So I just think

436
00:20:54,200 --> 00:20:57,080
Speaker 2: it's a it's a known, well and respected brand, and

437
00:20:57,119 --> 00:20:59,080
Speaker 2: I don't think it actually needs any amplifiers.

438
00:20:59,119 --> 00:21:02,240
Speaker 1: It would be that would be better served with its

439
00:21:02,320 --> 00:21:05,960
Speaker 1: more traditional call it pre twenty twenty twenty nineteen, when

440
00:21:06,080 --> 00:21:09,560
Speaker 1: HBO Max launched, Would they be better served with a

441
00:21:09,600 --> 00:21:13,560
Speaker 1: more bespoken, boutique lineup of programming.

442
00:21:13,400 --> 00:21:15,159
Speaker 2: Look, And I think it's I don't think that was

443
00:21:15,200 --> 00:21:18,520
Speaker 2: true for us, But we really we started our roots,

444
00:21:18,560 --> 00:21:22,400
Speaker 2: began DVD by mail in that model, we carried everything

445
00:21:22,440 --> 00:21:25,280
Speaker 2: ever published. So of course we're a general entertainment brand,

446
00:21:25,520 --> 00:21:27,840
Speaker 2: because what happened is as we grew up with consumers.

447
00:21:28,320 --> 00:21:30,879
Speaker 2: If you love documentaries, Netflix was the best place in

448
00:21:30,920 --> 00:21:32,639
Speaker 2: the world to get a documentary because you could you know,

449
00:21:32,640 --> 00:21:35,520
Speaker 2: they're so under distributed at the time, a foreign language film,

450
00:21:35,600 --> 00:21:37,880
Speaker 2: Netflix was the best place to get a foreign language film.

451
00:21:38,200 --> 00:21:39,640
Speaker 2: It was also the best place to get a big

452
00:21:39,640 --> 00:21:42,199
Speaker 2: blockbuster movie that weekend. So for us, I don't think

453
00:21:42,200 --> 00:21:46,040
Speaker 2: people bet. We've always been, by design, a general entertainment

454
00:21:46,080 --> 00:21:50,080
Speaker 2: brand that is highly person personalized, so that whenever you're watching,

455
00:21:50,200 --> 00:21:52,520
Speaker 2: you know, netflixhid morph into that for you, and I

456
00:21:52,520 --> 00:21:54,920
Speaker 2: think that has served us very well. And I don't

457
00:21:54,960 --> 00:21:57,840
Speaker 2: and I think with HBO trying to say, well, let's

458
00:21:57,840 --> 00:22:01,080
Speaker 2: become Netflix, we it was just always in our DNA

459
00:22:01,119 --> 00:22:03,160
Speaker 2: to be one to be this, and in their DNA

460
00:22:03,240 --> 00:22:05,440
Speaker 2: was always to be a little more prestige, and then

461
00:22:05,480 --> 00:22:08,560
Speaker 2: trying to be something else just probably wasn't a good

462
00:22:08,640 --> 00:22:11,080
Speaker 2: use of resources. But I do think that you don't.

463
00:22:11,440 --> 00:22:15,720
Speaker 2: For us, you know, adolescence was as prestige TV as

464
00:22:15,720 --> 00:22:18,399
Speaker 2: you get, and you'll see, you know, just has swept

465
00:22:18,400 --> 00:22:21,040
Speaker 2: through every awards and remember Baby Reading there before that

466
00:22:21,160 --> 00:22:23,679
Speaker 2: and Beef before that. So when you look at that

467
00:22:23,720 --> 00:22:25,560
Speaker 2: and think, okay, those are that was where what you'd

468
00:22:25,560 --> 00:22:31,360
Speaker 2: call prestige TV, and they were enormous successes, big audience shows,

469
00:22:31,440 --> 00:22:34,199
Speaker 2: and that's what Netflix is really good at. So for me,

470
00:22:34,240 --> 00:22:36,119
Speaker 2: it's like, these are those two things that've never been

471
00:22:36,119 --> 00:22:38,200
Speaker 2: in conflict with each other on Netflix, and they won't

472
00:22:38,200 --> 00:22:41,320
Speaker 2: be with HBO programming in there as well. And I

473
00:22:41,359 --> 00:22:43,879
Speaker 2: think the point of it is eighty five percent of

474
00:22:44,040 --> 00:22:48,000
Speaker 2: HBO subscribers also subscribe to Netflix, so that is a

475
00:22:48,000 --> 00:22:51,800
Speaker 2: good example of how incredibly complementary these services are. And

476
00:22:51,840 --> 00:22:55,760
Speaker 2: those people pay roughly a one hundred percent premium to

477
00:22:55,800 --> 00:22:58,960
Speaker 2: have both services today, So those folks are going to

478
00:22:59,000 --> 00:23:00,679
Speaker 2: get a nice discount when I.

479
00:23:00,720 --> 00:23:03,399
Speaker 1: Have the numbers here, Netflix is about eighteen bucks a

480
00:23:03,440 --> 00:23:07,159
Speaker 1: month without ads. HBO Max is about eighteen fifty a

481
00:23:07,240 --> 00:23:11,919
Speaker 1: month without ads. Obviously, the concern about pricing power, the

482
00:23:11,960 --> 00:23:14,800
Speaker 1: concern about the cost of the service and the impact

483
00:23:14,880 --> 00:23:17,960
Speaker 1: on consumers is one of the huge issues around this deal.

484
00:23:18,280 --> 00:23:20,520
Speaker 1: What can you say now, what can you say in

485
00:23:20,560 --> 00:23:23,240
Speaker 1: a regulatory filing in a couple of months that would

486
00:23:23,280 --> 00:23:27,240
Speaker 1: be concrete and rock solid in terms of what you're

487
00:23:27,280 --> 00:23:30,840
Speaker 1: saying about the price and the cost of these services

488
00:23:31,200 --> 00:23:34,800
Speaker 1: to people, especially because there is so overlap, the business

489
00:23:34,840 --> 00:23:37,359
Speaker 1: temptation is going to be so great for you.

490
00:23:37,760 --> 00:23:40,280
Speaker 2: I mean, if there's ever been a greater champion of

491
00:23:40,280 --> 00:23:43,560
Speaker 2: consumer value in entertainment than Netflix, I don't know who

492
00:23:43,560 --> 00:23:46,480
Speaker 2: it is. We have been. Our whole history is about

493
00:23:46,480 --> 00:23:49,760
Speaker 2: giving more for less, and we are very fine tuned

494
00:23:49,800 --> 00:23:53,239
Speaker 2: into the pricing price to value proposition. People always talk

495
00:23:53,240 --> 00:23:56,600
Speaker 2: about affordability. Affordability is value, and when you look at

496
00:23:56,640 --> 00:23:59,760
Speaker 2: what it costs for Netflix and how much entertainment value

497
00:23:59,760 --> 00:24:03,359
Speaker 2: you can it for Netflix, it's enormous. It's probably the

498
00:24:03,359 --> 00:24:06,119
Speaker 2: greatest value in the history of entertainment. And by the way,

499
00:24:06,359 --> 00:24:09,359
Speaker 2: it's one click cancel if we'rever wrong. So if we

500
00:24:09,560 --> 00:24:11,399
Speaker 2: when our pricing goes up and people look at it

501
00:24:11,400 --> 00:24:13,400
Speaker 2: and they make a decision, they said, why I watch

502
00:24:13,440 --> 00:24:15,120
Speaker 2: a lot of Netflix, and I wouldn't. I don't want

503
00:24:15,119 --> 00:24:17,120
Speaker 2: to not have Netflix, and I'll pay an extra box.

504
00:24:17,720 --> 00:24:19,600
Speaker 2: You know that. So they go through this every time

505
00:24:19,680 --> 00:24:21,800
Speaker 2: we talk about pricing, and we don't ever do that

506
00:24:21,880 --> 00:24:24,760
Speaker 2: until we know we've got that value proposition in order.

507
00:24:25,200 --> 00:24:28,320
Speaker 2: So it's a we're very consumer led, very we don't

508
00:24:29,920 --> 00:24:32,080
Speaker 2: this notion that you know we're just going to get

509
00:24:32,119 --> 00:24:36,560
Speaker 2: these assets and raise the price on everybody. You just example,

510
00:24:36,600 --> 00:24:40,080
Speaker 2: you just gave those people are voluntarily playing one hundred

511
00:24:40,480 --> 00:24:44,760
Speaker 2: more to add HBO to their Netflix subscription that they're

512
00:24:44,800 --> 00:24:47,280
Speaker 2: going to see a tremendous value in a combined in

513
00:24:47,320 --> 00:24:49,719
Speaker 2: a combined service. So and if they don't, if they

514
00:24:49,760 --> 00:24:52,000
Speaker 2: only want HB, you know, some percentage of them, only

515
00:24:52,000 --> 00:24:55,159
Speaker 2: one HBO will continue to distribute HBO largely than it

516
00:24:55,240 --> 00:24:56,400
Speaker 2: is today for them.

517
00:24:56,840 --> 00:25:00,199
Speaker 1: So Netflix right now, I know you're not disclosing, but

518
00:25:00,280 --> 00:25:03,920
Speaker 1: from the most recent figures, Netflix right now around three

519
00:25:03,960 --> 00:25:06,639
Speaker 1: hundred and twenty five million global HBO max. About one

520
00:25:06,760 --> 00:25:10,320
Speaker 1: hundred and twenty eight million global Netflix about eighty nine

521
00:25:10,359 --> 00:25:14,560
Speaker 1: million US HBO max. About fifty eight million US. Where

522
00:25:14,560 --> 00:25:17,160
Speaker 1: do you see the upside in that if the two

523
00:25:17,200 --> 00:25:19,800
Speaker 1: do come together? Where is upside? Do you see the

524
00:25:19,880 --> 00:25:23,879
Speaker 1: upside as being able to significantly expand that pie whether

525
00:25:23,920 --> 00:25:27,080
Speaker 1: globally or in the US, or is it going to

526
00:25:27,119 --> 00:25:29,920
Speaker 1: come from efficiencies over time?

527
00:25:30,600 --> 00:25:33,359
Speaker 2: It's going to come from right now, where even with

528
00:25:33,440 --> 00:25:35,639
Speaker 2: all of our great success, even if you put the

529
00:25:35,640 --> 00:25:38,720
Speaker 2: two companies together, we're about ten percent of engagement view time.

530
00:25:39,160 --> 00:25:41,440
Speaker 2: So can we win those moments of truth more often

531
00:25:41,520 --> 00:25:44,359
Speaker 2: over the years and grow that number and then people

532
00:25:44,400 --> 00:25:45,600
Speaker 2: will see great value in that.

533
00:25:46,720 --> 00:25:48,920
Speaker 1: Do you know Casey Bloys? And obviously he's such a

534
00:25:49,040 --> 00:25:51,639
Speaker 1: huge he's the creative leader of the creative force behind HBO.

535
00:25:51,800 --> 00:25:53,680
Speaker 1: Did you have a relationship before this?

536
00:25:53,960 --> 00:25:57,440
Speaker 2: No. I know him socially, and I deeply respect him.

537
00:25:57,440 --> 00:25:59,560
Speaker 2: I think he's done a phenomenal job there over the years,

538
00:26:00,160 --> 00:26:02,280
Speaker 2: and he's had this very long track record of doing it.

539
00:26:03,119 --> 00:26:05,400
Speaker 2: So yeah, but I know him socially, but I don't

540
00:26:05,920 --> 00:26:07,879
Speaker 2: beyond that. I don't know him well. But I do

541
00:26:08,000 --> 00:26:11,440
Speaker 2: know kind of the key creative leaders at the company,

542
00:26:11,920 --> 00:26:14,440
Speaker 2: and I've just been so thrilled to get to spend

543
00:26:14,440 --> 00:26:17,040
Speaker 2: some time with them through this process, and they seem

544
00:26:17,080 --> 00:26:19,399
Speaker 2: to be quite really excited about it too, which just

545
00:26:19,400 --> 00:26:21,480
Speaker 2: makes me happy because I would love to keep those

546
00:26:21,480 --> 00:26:24,080
Speaker 2: folks in those chairs doing exactly what they're doing for

547
00:26:24,200 --> 00:26:24,840
Speaker 2: years to come.

548
00:26:26,080 --> 00:26:28,280
Speaker 1: You've been asked many times about the Warner Brothers and

549
00:26:28,320 --> 00:26:31,520
Speaker 1: the theatrical exhibition, and I know you have said very

550
00:26:31,520 --> 00:26:33,640
Speaker 1: publicly that you would commit to a forty five day

551
00:26:33,640 --> 00:26:35,600
Speaker 1: window this sort of sub question.

552
00:26:35,840 --> 00:26:38,280
Speaker 2: Your listeners can watch us. Now cut a finger and

553
00:26:38,280 --> 00:26:39,320
Speaker 2: do a blood out together.

554
00:26:39,640 --> 00:26:42,240
Speaker 1: You did it under oath in front of the Senate,

555
00:26:42,280 --> 00:26:45,000
Speaker 1: and that was quite a performance. You did not get rattled.

556
00:26:45,080 --> 00:26:46,960
Speaker 1: I think the highest compliment we can say is you

557
00:26:47,040 --> 00:26:48,080
Speaker 1: did not become a meme.

558
00:26:48,280 --> 00:26:51,200
Speaker 2: But I said this is I understand I have earned

559
00:26:51,240 --> 00:26:53,960
Speaker 2: the skepticism on this issue for sure, but I have

560
00:26:54,040 --> 00:26:56,720
Speaker 2: just remind you we were not in the theatrical business.

561
00:26:57,240 --> 00:27:00,560
Speaker 2: Anytime I made any commentary about the theatrical business, it

562
00:27:00,640 --> 00:27:03,720
Speaker 2: was an observation. It wasn't a wish, it wasn't a desire.

563
00:27:03,960 --> 00:27:06,119
Speaker 2: We don't compete with time, with time spent in the

564
00:27:06,160 --> 00:27:09,920
Speaker 2: movie theater. When we just did The Stranger Things finale,

565
00:27:10,480 --> 00:27:12,480
Speaker 2: we put it in theaters on the same day we

566
00:27:12,640 --> 00:27:16,199
Speaker 2: released it on Netflix. About half the audience watched it

567
00:27:16,200 --> 00:27:18,439
Speaker 2: in the theater after already watching it at home, so

568
00:27:18,480 --> 00:27:20,600
Speaker 2: they watched it a second time, and the other half

569
00:27:20,600 --> 00:27:23,479
Speaker 2: went home and watched it again. And I think it

570
00:27:23,520 --> 00:27:26,320
Speaker 2: does anything you could do to raise enthusiasm and excitement

571
00:27:26,359 --> 00:27:28,919
Speaker 2: for movies and television, you should do that. And I

572
00:27:28,960 --> 00:27:31,359
Speaker 2: think when you can do it like this, that's phenomenal.

573
00:27:31,640 --> 00:27:35,000
Speaker 2: And at that relationship, when somebody you know get leaves

574
00:27:35,040 --> 00:27:37,280
Speaker 2: their house, goes to see a movie. If they had

575
00:27:37,280 --> 00:27:39,159
Speaker 2: a great experience in the theater, the first thing they

576
00:27:39,200 --> 00:27:41,280
Speaker 2: want to do is watch another movie they turn on Netflix.

577
00:27:41,560 --> 00:27:44,679
Speaker 2: So I think it's a hugely complimentary business. Now, everything

578
00:27:44,680 --> 00:27:46,800
Speaker 2: I've ever said about it before has just been raw

579
00:27:46,880 --> 00:27:49,960
Speaker 2: observations of data, and I do think what we can

580
00:27:50,000 --> 00:27:53,560
Speaker 2: do to help make the movie business a more healthy business.

581
00:27:54,119 --> 00:27:56,479
Speaker 2: I don't want to open theaters and compete with theater owners,

582
00:27:56,480 --> 00:27:58,080
Speaker 2: of course not. But I want to do a supply

583
00:27:58,160 --> 00:28:01,080
Speaker 2: them with great movies to do, and then they will

584
00:28:01,119 --> 00:28:04,399
Speaker 2: provide a great experience for consumers. And we both have

585
00:28:04,480 --> 00:28:06,600
Speaker 2: to do that for this to work. And I'm committing

586
00:28:06,640 --> 00:28:08,439
Speaker 2: to my part, which is I'm going to give them

587
00:28:08,720 --> 00:28:10,480
Speaker 2: movies and we're going to give them a window of

588
00:28:10,520 --> 00:28:13,080
Speaker 2: time to exploit them, and they have to create a

589
00:28:13,080 --> 00:28:14,480
Speaker 2: great experience for theater. Guards.

590
00:28:14,760 --> 00:28:19,280
Speaker 1: Would Warner Brothers pay TV output remain with HBO or

591
00:28:19,320 --> 00:28:21,240
Speaker 1: would that potentially move over to Netflix.

592
00:28:21,280 --> 00:28:23,560
Speaker 2: It would remain with HBO, And there's more than one

593
00:28:23,600 --> 00:28:25,399
Speaker 2: hundred output deals around the world that they go to.

594
00:28:25,520 --> 00:28:26,720
Speaker 2: They will continue to hunt.

595
00:28:26,840 --> 00:28:30,680
Speaker 1: Yeah, okay, question about the forty five day window. You've

596
00:28:30,720 --> 00:28:32,600
Speaker 1: been very clear about committing to a forty five day

597
00:28:32,640 --> 00:28:36,320
Speaker 1: exhibition window would day forty six, then the movie would

598
00:28:36,359 --> 00:28:41,480
Speaker 1: be eligible to stream on HBO or stream on potentially Netflix.

599
00:28:41,880 --> 00:28:44,200
Speaker 2: No, I would go into a traditional pebot window after that,

600
00:28:44,320 --> 00:28:45,560
Speaker 2: just so same as it does today.

601
00:28:45,720 --> 00:28:49,240
Speaker 1: Right now, there's about a ninety day difference between, you know,

602
00:28:49,320 --> 00:28:53,040
Speaker 1: with this theatrical exhibition window, then the PAYVOD and many

603
00:28:53,040 --> 00:28:53,680
Speaker 1: different AGAs.

604
00:28:53,720 --> 00:28:56,280
Speaker 2: And to be true to my oath, it's the number

605
00:28:56,320 --> 00:28:58,000
Speaker 2: of the days are a little squishier than that. As

606
00:28:58,000 --> 00:29:00,280
Speaker 2: you know, some films, you know, go a little faster,

607
00:29:00,440 --> 00:29:02,440
Speaker 2: sometimes go a little slower, depending on how they're doing

608
00:29:02,520 --> 00:29:05,120
Speaker 2: or what their strategy is, or holiday calendars and those

609
00:29:05,200 --> 00:29:09,520
Speaker 2: kinds of things. But these would go through from theatrical

610
00:29:09,560 --> 00:29:12,520
Speaker 2: exclusivity is that forty five day window. After that it

611
00:29:12,520 --> 00:29:17,240
Speaker 2: would go into various other traditional windows of pivot and

612
00:29:17,280 --> 00:29:19,760
Speaker 2: then go into the traditional ATV window.

613
00:29:19,720 --> 00:29:24,120
Speaker 1: So no basic subscription streaming on day forty six. There

614
00:29:24,160 --> 00:29:26,600
Speaker 1: would still be a process of the page.

615
00:29:26,720 --> 00:29:28,360
Speaker 2: Yeah, exactly, what.

616
00:29:28,440 --> 00:29:31,600
Speaker 1: Did your time in DC in the hot seat there?

617
00:29:31,600 --> 00:29:34,680
Speaker 1: What did you learn about the popular perception of this

618
00:29:34,760 --> 00:29:37,160
Speaker 1: deal and what you need to combat to get this

619
00:29:37,240 --> 00:29:38,400
Speaker 1: over the finish line?

620
00:29:38,880 --> 00:29:40,760
Speaker 2: Well, I think that there's a lot of education that

621
00:29:40,800 --> 00:29:42,480
Speaker 2: has to go on for folks. Like I said, I

622
00:29:42,840 --> 00:29:46,560
Speaker 2: don't think that the folks on that committee, for you know, Philly,

623
00:29:46,640 --> 00:29:51,320
Speaker 2: understood what YouTube was that YouTube on television? I mean,

624
00:29:51,520 --> 00:29:54,800
Speaker 2: in the conversations I had going into the hearing, my

625
00:29:54,920 --> 00:29:58,240
Speaker 2: having to describe to them and their staff, this wasn't

626
00:29:58,280 --> 00:30:00,760
Speaker 2: cat videos on your phone that we're talking about that,

627
00:30:00,840 --> 00:30:04,960
Speaker 2: this was viewing professional content on your television. So I

628
00:30:04,960 --> 00:30:06,680
Speaker 2: do think that this when people get into that they

629
00:30:06,720 --> 00:30:09,600
Speaker 2: want they regulars tend to see the world in the

630
00:30:09,680 --> 00:30:12,040
Speaker 2: most narrow terms, and folks you know, like us, want

631
00:30:12,040 --> 00:30:13,440
Speaker 2: to see it in the most broad terms. But I

632
00:30:13,440 --> 00:30:15,880
Speaker 2: really wanted them to see it in real, unrealistic terms.

633
00:30:16,200 --> 00:30:21,000
Speaker 2: How do consumers consume movies and television shows? How where?

634
00:30:21,040 --> 00:30:23,240
Speaker 2: How do they spend time in front of their television set?

635
00:30:23,640 --> 00:30:25,720
Speaker 2: How is it monetized? If they look at that world,

636
00:30:25,840 --> 00:30:27,840
Speaker 2: you know, as it is today. We are in the

637
00:30:27,840 --> 00:30:30,680
Speaker 2: most competitive and vibrant time in the history of entertainment.

638
00:30:31,240 --> 00:30:34,280
Speaker 2: And by way of example, is this idea that you

639
00:30:34,320 --> 00:30:37,360
Speaker 2: could make your make a movie? You know, everyone, by

640
00:30:37,360 --> 00:30:40,440
Speaker 2: the way, every creator, every storyteller has the tools to

641
00:30:40,520 --> 00:30:43,480
Speaker 2: make a professional level movie in their back pocket right

642
00:30:43,520 --> 00:30:45,640
Speaker 2: now and then you could upload it to two B

643
00:30:46,120 --> 00:30:49,840
Speaker 2: and start making money on advertising against that film right now,

644
00:30:50,080 --> 00:30:52,520
Speaker 2: and the fast video segment is growing faster than all

645
00:30:52,560 --> 00:30:55,880
Speaker 2: those other segments. So this is an unbelievable time for

646
00:30:56,000 --> 00:30:59,840
Speaker 2: storytelling and a very creative environment for people to get

647
00:30:59,840 --> 00:31:03,479
Speaker 2: their story seen like never before. And to try to

648
00:31:03,760 --> 00:31:05,520
Speaker 2: narrow it and make it make it so narrow that

649
00:31:05,560 --> 00:31:09,000
Speaker 2: people can't function. That doesn't make any sense. And I

650
00:31:09,000 --> 00:31:15,880
Speaker 2: also think further than that is the ability to monetize

651
00:31:15,920 --> 00:31:18,959
Speaker 2: starts with engagement, So you can't there's no money if

652
00:31:18,960 --> 00:31:21,600
Speaker 2: you don't have people watching, right, So our old thing is,

653
00:31:21,720 --> 00:31:24,520
Speaker 2: can we then take a store a small story and

654
00:31:24,520 --> 00:31:27,400
Speaker 2: if it's really great, make it into a big story. Absolutely,

655
00:31:27,440 --> 00:31:29,560
Speaker 2: that's our bread and butter, and we're really good at that.

656
00:31:30,080 --> 00:31:32,200
Speaker 2: But it isn't the end of the road for anybody,

657
00:31:32,480 --> 00:31:34,280
Speaker 2: and that there are so many places to sell your

658
00:31:34,320 --> 00:31:36,959
Speaker 2: show now. And because people keep trying to say, well,

659
00:31:37,080 --> 00:31:39,120
Speaker 2: you know, if it's just you or just HBO, I

660
00:31:39,200 --> 00:31:42,320
Speaker 2: remind you, Shit's creek. It was on pop TV. It

661
00:31:42,400 --> 00:31:44,560
Speaker 2: just came out, you know, the big You don't know

662
00:31:44,600 --> 00:31:47,080
Speaker 2: where great, big HiT's got to come from anymore, because

663
00:31:47,080 --> 00:31:50,520
Speaker 2: it's because the distribution entertainment has been so democratized in

664
00:31:50,560 --> 00:31:54,280
Speaker 2: that way, which is super exciting, incredibly exciting, but frustrating

665
00:31:54,280 --> 00:31:56,760
Speaker 2: if you try to narrow it down to just people

666
00:31:56,880 --> 00:31:59,480
Speaker 2: who look and feel and smell like it Netflix and

667
00:31:59,560 --> 00:32:02,280
Speaker 2: charge for subscription. That doesn't seem like the way that

668
00:32:02,400 --> 00:32:04,640
Speaker 2: consumers experienced television.

669
00:32:04,320 --> 00:32:07,160
Speaker 1: In the last ten years as Netflix really ramped up.

670
00:32:07,400 --> 00:32:10,880
Speaker 1: Were you ever tempted? There have been studio assets up

671
00:32:10,960 --> 00:32:13,480
Speaker 1: for sale, including Warner Brothers in twenty twenty two. Were

672
00:32:13,520 --> 00:32:16,320
Speaker 1: you ever tempted to jump in before this? Or is

673
00:32:16,400 --> 00:32:21,720
Speaker 1: this time with Warner Brothers Discovery? Sue esian Eras for Netflix.

674
00:32:21,440 --> 00:32:23,800
Speaker 2: It was very unique because it did not have all

675
00:32:23,840 --> 00:32:26,200
Speaker 2: of the linear television assets attached to it that we

676
00:32:26,240 --> 00:32:28,880
Speaker 2: didn't want to get into. So when I look at

677
00:32:28,880 --> 00:32:31,240
Speaker 2: that business, it's not because it's a bad business. It's

678
00:32:31,240 --> 00:32:33,760
Speaker 2: not our business for sure, And this is a pivot.

679
00:32:33,800 --> 00:32:39,040
Speaker 2: This alone, taking on third party production, theatrical distribution, linear HBO,

680
00:32:39,160 --> 00:32:43,840
Speaker 2: linear TCM, those are extensions to our business. I didn't

681
00:32:43,840 --> 00:32:45,840
Speaker 2: want to take the next one, which was this, you know,

682
00:32:46,720 --> 00:32:49,680
Speaker 2: a whole suite of linear TV channels to deal with.

683
00:32:49,800 --> 00:32:52,720
Speaker 2: So this was a very unique offer because the Warner

684
00:32:52,720 --> 00:32:55,480
Speaker 2: Brothers Discovery Board decided it was in their strategic best

685
00:32:55,480 --> 00:32:59,360
Speaker 2: interest to sell these assets separate from the linear television assets,

686
00:32:59,480 --> 00:33:00,720
Speaker 2: and that's when I got attractive.

687
00:33:01,560 --> 00:33:03,960
Speaker 1: Ted. Thank you for your time, Thank you so much,

688
00:33:04,160 --> 00:33:06,440
Speaker 1: Thanks for listening. Be sure to leave us a review

689
00:33:06,480 --> 00:33:08,840
Speaker 1: at the podcast platform of your choice. We love to

690
00:33:08,880 --> 00:33:11,480
Speaker 1: hear from listeners. Please go to Variety dot com and

691
00:33:11,560 --> 00:33:15,040
Speaker 1: sign up for our free weekly Strictly Business newsletter, and

692
00:33:15,160 --> 00:33:17,840
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00:33:17,840 --> 00:33:18,959
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