Speaker 1: Strictly Business is brought to you in part by City
Speaker 1: National Bank, the bank who makes it their business to
Speaker 1: be personal. A City National relationship manager can anticipate the
Speaker 1: financial needs that make the entertainment and tech industries tick.
Speaker 1: That's because they've been doing it for more than sixty
Speaker 1: five years. Need to figure out day to day finances done.
Speaker 1: Someone that understands intellectual property, licensing and royalties absolutely. City
Speaker 1: National understands the industry because they were born in it.
Speaker 1: Visit c NB dot com and get started. City National
Speaker 1: Bank member f d I C. Welcome to Strictly Business,
Speaker 1: Varieties weekly podcast featuring conversations with industry leaders about the
Speaker 1: business of media and entertainment. I'm Cynthia Littleton, business editor
Speaker 1: for Variety Today. My guest is Ted's Surrandos, co CEO
Speaker 1: and Chief Content Officer for Netflix. Surrandos has a view
Speaker 1: of the global entertainment industry like no other because no
Speaker 1: other entertainment company has ever had the global reach and
Speaker 1: local presence that Netflix has. In our wide ranging interview,
Speaker 1: Surrandos talks about what they've learned from their aggressive global
Speaker 1: push over the past five years and how it's changed
Speaker 1: the way Netflix views the overall content business. He also
Speaker 1: talks about navigating coronavirus curveballs, the controversy over the French
Speaker 1: arthouse film Cutis, and why he recently made a big
Speaker 1: change in Netflix's senior management ranks. The interview was held
Speaker 1: in conjunction with the presentation of the Vanguard Award to
Speaker 1: Surrandos and Netflix from Variety and the mip COM Global
Speaker 1: Content Conference. Welcome everyone, Thank you for joining us what
Speaker 1: for what is sure to be a lively conversation about
Speaker 1: the global entertainment business with none other than Ted Surrando's
Speaker 1: Chief Content Officer and co CEO of Netflix. I'm Cynthia Littleton,
Speaker 1: business editor for Variety and on behalf of Variety and Midcom.
Speaker 1: We are very pleased to award varieties Vanguard Award for
Speaker 1: achievement and Impact in the global Television Business to Ted
Speaker 1: Surrandos and Netflix. Thank you very much, Thanks so much
Speaker 1: for joining us. Ted. In this virtual format, we would
Speaker 1: otherwise be on the croissette, but we we can have
Speaker 1: a toast in future years. Absolutely. If you know, if
Speaker 1: France would have us, we would have come, but I
Speaker 1: would I would not mind being on the coast of
Speaker 1: France right now. I hear you, I hear you. So
Speaker 1: thank you very much obviously to Variety and everyone at
Speaker 1: MIPCOM for this great honor and UH for the for
Speaker 1: the jetting me this morning. Oh you're welcome. So I
Speaker 1: thought we would start kind of where it began for
Speaker 1: you on the on the in the global arena. Um.
Speaker 1: It's hard to believe, but it's coming up on five years.
Speaker 1: January seven, two thousand and sixteen, you were at the
Speaker 1: c E S conference in Las Vegas and you very
Speaker 1: dramatically flipped the switch and took Netflix into more than
Speaker 1: a hundred and thirty countries on one day. I think
Speaker 1: that one move was one of the things that really
Speaker 1: I think galvanized Hollywood's attention and I think the global
Speaker 1: entertainment industry kind of looked and thought, woa, this is
Speaker 1: a different kind of company. When you were making that
Speaker 1: move almost five years ago, did you know did did
Speaker 1: you have a sense of what a profound impact that
Speaker 1: going global in that degree, you know, expanding that that
Speaker 1: to that many territories that quickly in one field swoop.
Speaker 1: Did you know what kind of an impact that would
Speaker 1: have on your business? Well, you know, the company was
Speaker 1: an Internet company, even though we were only mailing DVDs
Speaker 1: around the US to start with. The the the ability
Speaker 1: to be a global company at the Global Entertainment Company
Speaker 1: was uniquely enabled by the Internet. UH. The way that
Speaker 1: being a A to Z DVD rental company UH was
Speaker 1: owned was uniquely enabled by the Internet back in the
Speaker 1: beginning of Netflix. But I think that we've always thought
Speaker 1: that there was an interesting lack of equilibrium in the
Speaker 1: storytelling arena where the US represented such a small percentage
Speaker 1: of the world population and such a large percent of
Speaker 1: total watching of content around the world. So you knew,
Speaker 1: we knew that there were great storytellers, We knew that
Speaker 1: there was great content coming from all over the world,
Speaker 1: but the existing distribution models made it pretty difficult for
Speaker 1: anything but domestic content to travel internationally. UM. But so
Speaker 1: we looked at it earlier, which was like, what the
Speaker 1: more time we spent in more countries, the more you
Speaker 1: got to understand about the local appetites and local culture,
Speaker 1: local history, local storytelling, local production ecosystems, and realized there
Speaker 1: was an enormous opportunity for underserved audiences who've been pretty
Speaker 1: dramatically underserved up to that point for us to be
Speaker 1: able to be um as meaningful to a customer in
Speaker 1: India as we are in Indiana. That was kind of
Speaker 1: the way we thought about it back five years ago.
Speaker 1: M hmm. Were was did you have nerves at that time?
Speaker 1: It's kind of like, you know, you turned the lights on,
Speaker 1: did you have any worries that you wouldn't get meaningful
Speaker 1: numbers of subscribers? Uh, you know, at the time, it
Speaker 1: was really uh that that that that literally flipped the
Speaker 1: switch go live a hundred and thirty countries. It was
Speaker 1: at that time. It wasn't like we were specializing in
Speaker 1: any of them. You know, we had a couple, we
Speaker 1: had some international territories launched ahead of that, but these
Speaker 1: hundred and thirty countries were basically just entering for the
Speaker 1: first time with the Netflix product as it was offered
Speaker 1: to most people in the world. Uh, localized in many
Speaker 1: countries and money languages, but at the time we didn't
Speaker 1: have local payment options in many cases, or local subtitles
Speaker 1: and dubs in some cases. So and those that early
Speaker 1: early past, it was very much a hey, if you're
Speaker 1: like Western content and up international credit card, uh, and
Speaker 1: you've heard about Netflix, now you can watch it. Uh.
Speaker 1: And then we just then just started more surgically looking
Speaker 1: country by country, territory by territory uh at doing everything
Speaker 1: from localizing the content that we had UH, to localizing
Speaker 1: the payment methodologies UH and also to uh in many
Speaker 1: cases producing original content and local language in those countries.
Speaker 1: Was there anyone market or region that really fired up
Speaker 1: your appetite for local language production to to really go
Speaker 1: for it in that on that scale. Well, our first
Speaker 1: time out was um you know we did in Mexican
Speaker 1: Mexico when we made um Um Club the Cuervos, we
Speaker 1: had an opportunity to look at say, well, that's the
Speaker 1: show that not only worked really well in Mexico, but
Speaker 1: it pretty much serves the Spanish speaking world. Uh. So
Speaker 1: you really understand that you've got some opportunity to build
Speaker 1: scale in some places in the world and other stories
Speaker 1: and other places where like Japan, which was, you know,
Speaker 1: such a huge media market and it's almost exclusively jepp
Speaker 1: Upanese content in Japan. Uh. His history, history, taste, culture,
Speaker 1: all those things that steer that population to mostly enjoy
Speaker 1: the Japanese content. So you have these challenges of saying,
Speaker 1: how do you you know, one hand, you can take
Speaker 1: a stranger things that's almost totally global. But prior to that,
Speaker 1: we didn't have a lot of experience with um, non
Speaker 1: English language shows being very global. Uh. And then you
Speaker 1: know Fastival, you know launched. Uh. We have a new
Speaker 1: season of the Custody Papela just came out this year.
Speaker 1: And you think at that show, and that show is
Speaker 1: enormous globally, Uh. And the Spanish language and it's film,
Speaker 1: you know, it's in a show from Spain. Uh. So
Speaker 1: you have the opportunity to produce at scale in local languages. Uh.
Speaker 1: It's an incredible It's incredible when you get it right. UM.
Speaker 1: And I do think and that is you know, trusting
Speaker 1: the storytellers in the region, giving them a big platform
Speaker 1: and the opportunity to talk to the world in some
Speaker 1: in some cases for the first time. And and of
Speaker 1: course in this in this new on demand format which
Speaker 1: is in an of itself, is so it is revolutionary
Speaker 1: for markets where you know, the the overall the notion
Speaker 1: of you know, private private networks is still relatively young. Yeah. Absolutely. Um.
Speaker 1: Of course, in in your global network, China is a
Speaker 1: is a big gap in terms of where you are.
Speaker 1: You know, it's been well documented that the Chinese government
Speaker 1: has not has not welcomed Netflix. Is there any progress
Speaker 1: or any any effort to get into that market? You know,
Speaker 1: We've not, I menially, in the last couple of years
Speaker 1: invested in trying to get there. I think that to
Speaker 1: your point, I think the local government in China UH
Speaker 1: is not like the Chinese versions of Netflix to be
Speaker 1: Chinese UM. And so I think we have a lot
Speaker 1: of a lot of folks in the industry I think
Speaker 1: have been you know, running into walls trying to make
Speaker 1: trying to change that and eventually eventually that eventually those
Speaker 1: walls will come down. But I don't think it's gonna
Speaker 1: happen anytime really soon. And I'm glad that we spend
Speaker 1: most of our energies UH in countries that are that
Speaker 1: welcome UH Netflix to be part of the entertainment landscape.
Speaker 1: M Um. With all of the local language content that
Speaker 1: you are doing now, I was wondering, how do you
Speaker 1: must have to schedule your time to to watch some
Speaker 1: all of that content or watch at least a sampling
Speaker 1: of it. Do you do you literally like apportion your
Speaker 1: schedule by continent maybe or uh? You know what I
Speaker 1: really miss in our current times of uh of COVID restrictions.
Speaker 1: What I really miss is the international travel. Uh. Beyond
Speaker 1: just the ability to get out and see people around
Speaker 1: the world. Uh, those long plane rides were really accommodating
Speaker 1: to catching up on the viewing, to catch you watching
Speaker 1: cuts of episodes and so so I do have to
Speaker 1: be more discipline about regimenting my time to make sure
Speaker 1: that I can get get in front of some of
Speaker 1: the content. And the keith that really do that is
Speaker 1: when I we first started this, you know, we were
Speaker 1: doing two or three shows, and you can watch every
Speaker 1: cut and read every draft of every script. And today
Speaker 1: a you know, it's not unusual for shows to come
Speaker 1: on Netflix without me having seen any of any of it.
Speaker 1: And that's because we've got I've got incredible teams in
Speaker 1: each of these content verticals in each of these countries
Speaker 1: that are producing great original content and they're really empowered. Uh.
Speaker 1: There's great, hugely experience that I get to step in
Speaker 1: sometimes when things are particularly challenging or particular particularly celebratory.
Speaker 1: UH that I'm part of that, But in general, the
Speaker 1: teams that I have enabled the entire thing to scale.
Speaker 1: UM I knew going you know, looking at those early
Speaker 1: days that if we bottle neck decision behind me, we'd
Speaker 1: never get anywhere. So we really had to, particularly now
Speaker 1: that we're operating in you know, every time zone in
Speaker 1: the world. So the opportunity to enable people to make
Speaker 1: great choices and come up with great television and film
Speaker 1: for the world has been one of the things that
Speaker 1: most gratified by how this all turned out, UM, and
Speaker 1: that it it really enabled it to scale in a
Speaker 1: way that I think entertainment companies have a difficult time
Speaker 1: scaling because their historical they are you know, wrapped around
Speaker 1: these kind of cult to personalities or golden this idea
Speaker 1: of golden guts and all those things. I hopefully, if
Speaker 1: I have a golden gut, it's for people, UM, and
Speaker 1: their ability to make great choices. You have some local,
Speaker 1: local buyers, local managers have green have green light authority
Speaker 1: in essence, they can order and commission content correct on
Speaker 1: their own, on their own, and they you know, there's
Speaker 1: some things obviously you want to check in with, but
Speaker 1: for the most part, you know, they know those markets
Speaker 1: better than we do. And you know, as as example,
Speaker 1: Um uh Min Young is an executive of ours in Korea.
Speaker 1: Uh she had come up pretty you know, pretty fast
Speaker 1: and at Netflix and her her sense of the production
Speaker 1: ecosystem in Korea was obviously far better than anybody in
Speaker 1: Netflix at the time. Uh. And she's had incredible success
Speaker 1: with our local language originals film and television in Korea
Speaker 1: that are serving in the Korean market but also serving
Speaker 1: throughout a pack and every once in a while you
Speaker 1: get one, it just serves the world. Um. We had
Speaker 1: a film and original film that came out this quarter,
Speaker 1: um hashtag alive. Um that it was a big global success,
Speaker 1: one of our top non English films ever on Netflix.
Speaker 1: M Um, have you having you know, watched the flate
Speaker 1: you know, a sampling of shows undoubtedly from so many regions,
Speaker 1: you know, looking at comedies and dramas and I'm sure
Speaker 1: narrative and non narrative. Are there anything you know? I
Speaker 1: would imagine that you've become something of a student of
Speaker 1: cultures around the world. Are there any similarities that you
Speaker 1: find in dramas or similarities that you find in comedies,
Speaker 1: or differences that stand out in your mind for content
Speaker 1: in various regions. I'm always interested in what, you know,
Speaker 1: how similar the world is more so than I am.
Speaker 1: And like what are the unique differences, because I think
Speaker 1: people are mostly surprised at how similar tastes are, you know,
Speaker 1: like there's all this conventional wisdom about the entertainment is
Speaker 1: about what does and doesn't travel. Most of it turns
Speaker 1: out not to be true. What really travels is UM
Speaker 1: great already telling UM super authentic characters that you can
Speaker 1: really that people can relate to somewhere in the world. Uh.
Speaker 1: And I think that this um notion of trying to
Speaker 1: reverse engineering global storytelling is silly because really the most
Speaker 1: things have been most successful the things that are most
Speaker 1: authentically local, So that the better we do at identifying
Speaker 1: those stories that are authentically local, the better success we have.
Speaker 1: So that helps a lot playing down the other convention
Speaker 1: convention past, like French French comedy plays huge in France
Speaker 1: and never travels. Uh. We we we had a great show
Speaker 1: called Plank Core, great rom com uh that plays all
Speaker 1: over Europe and all over the world. Uh. Just by
Speaker 1: way of example, right now, our show Emily in Paris,
Speaker 1: which is obviously an English language show American characters set
Speaker 1: in Europe. You think that's kind of reverse engineering story,
Speaker 1: but it's just a it's a classic fish out of
Speaker 1: water Story, so I played. That's why it plays so
Speaker 1: well everywhere in the world. So I think in general,
Speaker 1: the one thing that that have been most fascinating Mexico
Speaker 1: was one of our early launches and one of our
Speaker 1: the original content plays and the telenovelas obviously are quite
Speaker 1: popular in Mexico, and we've kind of evolved what a
Speaker 1: what a telenovela can look like. Um and I think
Speaker 1: you know this this year recently we released a show
Speaker 1: called Dark Desire Um that was an enormous success in
Speaker 1: Mexico but also played everywhere that people really love that
Speaker 1: kind of highly serialized, soapy storytelling. Uh. And so that
Speaker 1: show is a huge success for us in India and
Speaker 1: in Turkey, uh and in the US because it speaks
Speaker 1: well to the Spanish speaking community. In the US, we
Speaker 1: have seen a bit of a cultural class a culture
Speaker 1: clash in the world and kind of coming through Netflix.
Speaker 1: In the last couple of weeks in the United States,
Speaker 1: there's been a bit of an outcry over a movie
Speaker 1: that you have on the platform. Cuti's um, a movie
Speaker 1: that you know played Sundance gathered a claim at Sundance
Speaker 1: when it came on Netflix and was very available to
Speaker 1: the world. You know, I don't have to tell you
Speaker 1: there has been some outcry in pockets in the US.
Speaker 1: How how do you feel about that? Does it? It
Speaker 1: seems too many people that this is a you know
Speaker 1: that this is UM, it's a it's a dangerous on
Speaker 1: a First Amendment UM, on a First Amendment basis in
Speaker 1: the in the United States. But it's also interesting in
Speaker 1: that Netflix really has created something of a global village. Yeah,
Speaker 1: I'm I'm frankly, I'm I'm surprised that it has been
Speaker 1: more discussion about the First Amendment implications about this film.
Speaker 1: It's a film that I would argue is very misunderstood
Speaker 1: with some audiences, uniquely in the in the United States. UM.
Speaker 1: I think the film itself speaks for itself. It's a
Speaker 1: very personal coming of age film. UH. The directors, the
Speaker 1: director's story, UM. And the film is you know, obviously
Speaker 1: played very well UMU at Sundance and without any of
Speaker 1: this controversy, played uh in theaters throughout Europe with without
Speaker 1: any of this controversy. UH. And the film I think
Speaker 1: does speak for itself. And I think it's it's a
Speaker 1: little surprising that in America we're having a discussion about
Speaker 1: censoring storytelling. Yeah, and you I mean, I think I
Speaker 1: know the answer, But you have not considered making any
Speaker 1: changes to the movie or or or limiting its access
Speaker 1: in any way. M hm Um. Let's talk about a
Speaker 1: little more specifically, like are there are there certain conditions
Speaker 1: in markets that you look at before you decide to
Speaker 1: invest big in original content? Is there like a you know,
Speaker 1: broadband penetration, or is there like a certain number of
Speaker 1: subs that you need in a market before you'll go
Speaker 1: kind of deep on original original content for that region.
Speaker 1: I think we're looking at like some some markets. Um,
Speaker 1: when we look at the opportunity, right, we're looking our
Speaker 1: addressable audience. Really is everybody with access to the Internet
Speaker 1: in a screen. Pretty big that way. So if you
Speaker 1: only think about it as broadband penetration, you missed the
Speaker 1: big population of folks who watch most of their content
Speaker 1: on mobile phones and then and connect to the Internet
Speaker 1: via mobile. So I do think that we have the
Speaker 1: opportunity is bigger than broadband penetration or pay television penetration. Uh,
Speaker 1: those are the easy ones because I think it goes
Speaker 1: to um, socio economics of that country. Uh that you know,
Speaker 1: you have an opportunity to reach audiences quickly. Um and so,
Speaker 1: but I think it's in the next piece of it
Speaker 1: is kind of the entertainment cultures, right, of these countries
Speaker 1: that really thrive on storytelling, big pay television markets, big
Speaker 1: uh movie going, all those kind of things. So there's
Speaker 1: a whole list of things that line up sometimes perfectly.
Speaker 1: And then you have places like Brazil, um, which you know,
Speaker 1: very young, vibrant population, great storytelling culture, great move great
Speaker 1: television market, great movie cultures, uh, and just people who
Speaker 1: are just hungry for great content. So we're uh. That
Speaker 1: was kind of one of our early breakouts if for international,
Speaker 1: was our success of Brazil, and I think he has
Speaker 1: a lot to do with the excitement and vibrant for
Speaker 1: the population in Brazil. We'll be right back. Strictly, business
Speaker 1: is brought to you in part by City National Bank,
Speaker 1: the bank who makes it their business to be personal.
Speaker 1: A City National relationship manager can anticipate the financial needs
Speaker 1: that make the entertainment and tech industries tick. That's because
Speaker 1: they've been doing it for more than sixty five years.
Speaker 1: Need to figure out day to day finances done. Someone
Speaker 1: that understands intellectual property licensing, and royalties. Absolutely. City National
Speaker 1: understands the industry because they were born in it. Visit
Speaker 1: c NB dot com and get started. City National Bank
Speaker 1: member f D I C. Welcome back to strictly Business.
Speaker 1: Here's more of my conversation with Ted Surrandos, PO CEO
Speaker 1: and Chief Content Officer for Netflix. Do you find that
Speaker 1: in like the bigger in the bigger global global markets
Speaker 1: in Europe and Latin America and Asia, do you find
Speaker 1: that your biggest competitors tend to be regional or local
Speaker 1: players or are you going you know, you feel like
Speaker 1: you get this the same sort of um competition from
Speaker 1: an Amazon or from other from the other you know
Speaker 1: some of the some of the competitors that are active
Speaker 1: in the US as well. Yeah, they're pretty much the
Speaker 1: same pool of folks. You know. The thing that we're
Speaker 1: competing with mostly is for you know, with folks for
Speaker 1: what time that they're spending on screens, so that can
Speaker 1: be through traditional television or through various uh subscription services
Speaker 1: and also things like YouTube. You know, many countries television
Speaker 1: watching is dominated about YouTube. So we're we're looking at
Speaker 1: all that, we look at all those markets and all
Speaker 1: those folks who we compete with, but we mostly focus
Speaker 1: on our members and mostly try to focus on how
Speaker 1: do you make these folks happy? How do you make
Speaker 1: the shows that they can't live without? Um. And if
Speaker 1: we focus on that, we don't have to worry too
Speaker 1: much about competitors. UM. We know that it's a big,
Speaker 1: enormous market and there's gonna be multiple players. You know,
Speaker 1: there's hundreds of channels of cable television around the world
Speaker 1: against satellite television. There are uh countless numbers of video
Speaker 1: competitors on the internet. UH. So you look at that
Speaker 1: and say, you know, we we always know there's gonna
Speaker 1: be folks. Yet we're competing with for people's affinity and
Speaker 1: love and attention and time. Uh. And we do that
Speaker 1: by with two great storytelling and delivering a great product
Speaker 1: for people. So when they push play uh anywhere in
Speaker 1: the world, uh, it works UM. And it's in many
Speaker 1: cases in the local language. UH. And it's oriented to
Speaker 1: what your taste is so that you could find great
Speaker 1: things to watch. Uh. And that's that great kind of
Speaker 1: convergence of of great tech and great storytelling. M HM.
Speaker 1: And I think you guys have have accurately said that
Speaker 1: one of your biggest competitor yours is in fact sleep.
Speaker 1: But we want people to sleep. Though we do want
Speaker 1: don't sacrifice anything, and don't don't sacrifice any sleep time.
Speaker 1: We want some of you more of your screen time,
Speaker 1: but your sleep time. Please keep keep sleep. It's important. UM. Obviously,
Speaker 1: COVID has been the curve just has been an enormous
Speaker 1: curveball for virtually every economics sector and every country on
Speaker 1: the planet. Have you, um, have you did you have
Speaker 1: to adjust either up or down or make big changes
Speaker 1: into your into the your plans for your content spending
Speaker 1: in has it been much revisions? The main thing I'm
Speaker 1: really proud of, you know, we throughout the one thing
Speaker 1: that really benefits from being UH Internet Global company is
Speaker 1: that throughout the early stages of the COVID shutdown, UH,
Speaker 1: in some places they did not shut down, like in
Speaker 1: Iceland and Sweden. UH. And we were able to figure
Speaker 1: out safety prod of calls that have served us really
Speaker 1: well all over the world, and our productions were mostly
Speaker 1: up and running. UH. And with our productions all over
Speaker 1: the world, we're shooting about a hundred yards from where
Speaker 1: I'm sitting right now on a stage UH, and it's
Speaker 1: I and it's making me a little crazy. I can't
Speaker 1: go over there because our code, because of our protocol
Speaker 1: safety protocols that I don't go visit the sets. But
Speaker 1: those sets and the safety protocols have kept these operations
Speaker 1: incredibly safe and healthy, uh and make the talent feel
Speaker 1: very comfortable, uh that they are being protected and looked
Speaker 1: out for. UH. So at first it was we don't.
Speaker 1: We didn't really spend that much time thinking what's it
Speaker 1: all going to cost? Um, But because because it really
Speaker 1: wasn't optional and it was not a great thing to
Speaker 1: cut corners on we're talking about, um creating a safe
Speaker 1: work environment of any kind, So we didn't, and we
Speaker 1: really built what I think is a state of the
Speaker 1: art safety protocols around our productions and uh and the
Speaker 1: art of this thing going forward because I'm afraid that
Speaker 1: you know, COVID nineteas be with us for a while, UM,
Speaker 1: that the art of all this is really gonna be
Speaker 1: how to manage in a world with COVID nineteen UM
Speaker 1: and how to keep people safe and working. And that's
Speaker 1: what we've been really focused on. And the cost of
Speaker 1: it has been um, you know, uh, not the leading
Speaker 1: priority if of course, it's a factor. Uh. And what's
Speaker 1: really nice about it is because of all the safety
Speaker 1: protocols and people being very supportive of the safety protocols,
Speaker 1: that productions run much smoother. So you actually save some
Speaker 1: shooting days. Sometimes shooting days are shorter. Um, the sets
Speaker 1: are better run, a better organized is fewer people on
Speaker 1: set sometimes, which you keep it easy. It keeps the
Speaker 1: trains running on time. So there's been some recovery in
Speaker 1: that too. Uh. And so we just we find is
Speaker 1: that you know, the the other thing two, as you
Speaker 1: get unforeseen benefits, financial benefits of when people aren't sick
Speaker 1: and getting sick going into blue season, all these safety
Speaker 1: protocols for COVID are going to prevent people also from
Speaker 1: getting the flue as frequently as they did and you
Speaker 1: would lose shooting days to the before. So in general,
Speaker 1: I think it's been uh not as um uh not
Speaker 1: as as as difficult to financial pain point to do
Speaker 1: the right thing. Uh. And we've been managing both. Have
Speaker 1: you found are there? I mean there are there. Obviously
Speaker 1: there are countries that got up and running sooner. Has
Speaker 1: there been any examples of how they're handling the protocols
Speaker 1: are just aspects of dealing with life in a COVID time.
Speaker 1: Any places that have impressed you, you know, outside the US,
Speaker 1: any places that impressed you with the way that that
Speaker 1: that local governments or you know, authorities have gone about
Speaker 1: dealing with the COVID crisis. I think everyone has got
Speaker 1: their different flavors of these things. So I think in
Speaker 1: general that you know, we I think, you know, North
Speaker 1: America was very slow to reopen relative to the rest
Speaker 1: of other places in the world. And I don't fault that,
Speaker 1: you know, this is not this is a good time
Speaker 1: to be careful, but in a way, I gotta give
Speaker 1: everybody the opportunity to figure out things. I think one
Speaker 1: thing that was great was the country is um like
Speaker 1: South Korea. One of the benefits that I think that
Speaker 1: what they did right was um you know, uh, large
Speaker 1: scale testing, a big federal response. I think the countries
Speaker 1: that took that, that took this series at the federal
Speaker 1: level UM have advanced things like production in all forms
Speaker 1: of essential work U is back to you know, near
Speaker 1: normal in many of these countries who took a big
Speaker 1: federal uniform response to to COVID. Mhm um. Let me
Speaker 1: ask you in terms of as you're you have an
Speaker 1: ever changing lineup of content. What are what are your
Speaker 1: most important metrics for evaluating shows? How there are programming,
Speaker 1: you know, program shows, movies, documentaries. What are the key
Speaker 1: things that you look at to see if they're resonating?
Speaker 1: In this way, Netflix is pretty traditional, like the meaning
Speaker 1: the audience measure audience matters. There are people showing up?
Speaker 1: Are they loving the shows? Uh? The things that we
Speaker 1: could bring to that that you know, that's more a
Speaker 1: little more difficult to measure in in old in traditional media,
Speaker 1: I said almost at old media, sorry, Uh is things like, um,
Speaker 1: you know, what people watch in the first twenty four hours,
Speaker 1: so that gives you a good signal that people actually
Speaker 1: join Netflix to watch that show, So that show is
Speaker 1: more valuable than other shows in that way. Are they
Speaker 1: finishing the show? Do they finish it quickly? Meaning are
Speaker 1: they so addicted to the show that they really love it?
Speaker 1: And that kind of watching, that kind of level of
Speaker 1: passion is more valuable than just casual watching. And it's monetized,
Speaker 1: you know, through positive word of mouth and retention and
Speaker 1: all those kind of things. So they're all signals that
Speaker 1: are relatively easy for us to manage to to measure um,
Speaker 1: that to to to land on the in a world
Speaker 1: where all viewing isn't equal um and so in that way.
Speaker 1: But at the end of the day, relative to what
Speaker 1: the show cost, does it attract you know, a big
Speaker 1: enough audience who care enough about the show to keep going.
Speaker 1: M hmm. Interesting? Um, how do you should point out
Speaker 1: to you know? It's interesting the because I think the
Speaker 1: television world has so much grown up around you know,
Speaker 1: the core financial model of syndication, that the whole measure
Speaker 1: of success is how long a show runs, and getting
Speaker 1: a show too in the syndication getting to the magic
Speaker 1: hundred episodes with so much the measure of success in
Speaker 1: old media, uh that I just don't think. I think
Speaker 1: that that's why that gets an undue attention when shows
Speaker 1: don't go longer in the new kind of premium sad world.
Speaker 1: And I don't know that it is necessarily the measure
Speaker 1: of success. I think that we get the opportunity to
Speaker 1: tell stories for exactly as long as you should. You know,
Speaker 1: I think a lot of times you watch a lot
Speaker 1: of shows and they run out of creative a lot
Speaker 1: sooner than they run out of episodes. Uh, And in general,
Speaker 1: I really but I'm really thrilled about is sometimes we could,
Speaker 1: you know, sometimes the perfect shelf life for a show,
Speaker 1: the perfect running time for a show is three seasons
Speaker 1: or four seasons, or six seasons or eight seasons, whatever
Speaker 1: it is. But the unit form measure of success being
Speaker 1: you know, long running. I don't think. I think it's
Speaker 1: a very unusual thing that emerge. I think mostly tied
Speaker 1: to the golden prize of getting this syndication that is
Speaker 1: really no longer, uh, you know, the pot of gold
Speaker 1: that it once was in television. And I feel like
Speaker 1: I have for for minimum five years, probably closer to
Speaker 1: eight years, have been writing nothing about how things used
Speaker 1: to be and how they are now, so so that
Speaker 1: that is absolutely so true. It used to be that
Speaker 1: you built, you know, the the the absolute end goal
Speaker 1: was to build something that you could last as long
Speaker 1: as possible because it was tied to time sensitive schedules
Speaker 1: and time sensive schedules and everything there. And there are
Speaker 1: times that there's a story or a world or or
Speaker 1: some I p that is really built perfectly, you know,
Speaker 1: for fifteen years of storytelling. Not there's not not that frequently,
Speaker 1: but they exist and they're usually valuable when you could
Speaker 1: if you could find them. But you know, I do think,
Speaker 1: you know, we go. I think our shows if what
Speaker 1: I don't want to ever get into the position of
Speaker 1: doing is uh, you know, trying to prop up a
Speaker 1: show beyond its creative life. I know think creators are
Speaker 1: happy doing it either so, and I like the opportunity
Speaker 1: of doing a lot of you know, having a lot
Speaker 1: of slots, uh, is that to get the opportunity to
Speaker 1: tell another story? You know? The big reason why I
Speaker 1: think people wanted these shows to last forever is that
Speaker 1: sometimes they didn't get a second or third shot at
Speaker 1: it because it was because this the shelf space was
Speaker 1: so limited. It's the bringing in cousin Oliver syndrome exactly,
Speaker 1: the final season doing you're punching sharks and you're trying
Speaker 1: to keep you know, you're trying to go Maybe do
Speaker 1: you is this something that you talked talk about with
Speaker 1: your creators early on in the process. Do you talk about,
Speaker 1: like what is the what is the long arc for this?
Speaker 1: Do you see this as three seasons or four seasons?
Speaker 1: Are you having those conversations earlier? Given that the mindset
Speaker 1: is I want to go as long often is I
Speaker 1: want to go as long as possible. Yeah, And I
Speaker 1: would say, look, going back to our earliest shows, Um,
Speaker 1: The Crown, Peter Morgan could tell you nearly every story
Speaker 1: beat of six seasons of The Crown when we met,
Speaker 1: and you know, not that many there's not that many
Speaker 1: people who can tell you. Basically, you get a season,
Speaker 1: you get sometimes a pilot script, and sometimes I see
Speaker 1: a season bible and then a kind of very loose
Speaker 1: series bible, like where is this going over time? And
Speaker 1: you know, and they by the time you get to
Speaker 1: the fourth or fifth when it's a sentence. Uh. And
Speaker 1: in this case that you know Peter had talked about
Speaker 1: uh literally the stories that when they would break, how
Speaker 1: they would break, you know, through every season of this show.
Speaker 1: And that's why it's been such a thrill to watch
Speaker 1: it unfold so closely to how we pitched it. Uh.
Speaker 1: In most cases, I don't think people really have that
Speaker 1: clearer vision of the creative vision. I think they think
Speaker 1: they can say, this is a world that you can
Speaker 1: keep exploring and keep going deeper. Um, these are characters
Speaker 1: that you want to age with. Um. All those things
Speaker 1: are possible in television, is just not that common let
Speaker 1: me ask you, Ted, you i'll be had a major
Speaker 1: change in your uh, in your operation in the management
Speaker 1: side recently with Cindy Holland, a long time lieutenant of
Speaker 1: yours has left Bello Bajaria was was elevated. Can you
Speaker 1: tell me what drove that? Why did you change the
Speaker 1: structure in that way? UM? Some of it was triggered
Speaker 1: on the coast CEO arrangement with read meaning I was
Speaker 1: taking on some other responsibilities inside the company. Uh and
Speaker 1: and and had me second look at my direct report
Speaker 1: organization and how to how how to kind of streamline
Speaker 1: things a bit. And we've had great success running film
Speaker 1: and animation uh and and uh is uh is as
Speaker 1: global organizations. Our stand up comedy group was doing you know,
Speaker 1: global stand up comedy. UH. The only thing that really
Speaker 1: was regionalized this way really was our television efforts. We
Speaker 1: had very strong teams regionally. Uh and I looked at
Speaker 1: that and said, I wanted to have a global head
Speaker 1: of television. Du could had that up and in that
Speaker 1: world thinking about the things that we're going to be
Speaker 1: incredibly important to us for the next decade um, you know,
Speaker 1: local language, original programming, UM. UH. The the enormous growth
Speaker 1: has seen an unscripted and unscripted television which is still
Speaker 1: kind of been its infancy. Um. Uh. Bella built the
Speaker 1: unscripted team inside of Netflix now headed by Brandon reag
Speaker 1: as you brought over with her. I remember when I
Speaker 1: when we hired Bela, she had never worked on scripted television,
Speaker 1: and she built you know, brand Brandon and they architected
Speaker 1: this team in this slate of original unscripted shows. Uh
Speaker 1: so successfully. Um. After doing that for a little while,
Speaker 1: she stepped into the role of the local running the
Speaker 1: local language originals everywhere outside of the US, again having
Speaker 1: never worked international television. Uh and it has had a
Speaker 1: remarkable track record of building and rebuilding that team for me. Uh.
Speaker 1: And when I look at that, on top of the
Speaker 1: fact that she had such enormous success at Universal Television.
Speaker 1: Uh and in fact, it was a great supplier to
Speaker 1: Netflix before she joined us, the veloping great Joe's like
Speaker 1: master of None and I'm breakboo, Kim Schmidt uh and
Speaker 1: was really instrumental in getting UM never have I ever
Speaker 1: to Netflix. I thought it was a no brainer that
Speaker 1: Bella had the experience, uh and the leadership skills to
Speaker 1: take on. All those things are gonna be so important
Speaker 1: for the next you know, next twenty years at Netflix. Uh,
Speaker 1: and Cindy was a great partner getting all this built.
Speaker 1: But I think in the if you know, looking at it,
Speaker 1: the challenges and the opportunities of the next twenty years,
Speaker 1: the Bella was so perfectly positioned to lead through that
Speaker 1: those of us that have known Bella a while are
Speaker 1: not at all surprised that she is in fact on
Speaker 1: top of the world now. Fantastic. I guess my last
Speaker 1: question for you, Tend you sort of touched on but
Speaker 1: m you were recently elevated to co CEO with Read Hastings.
Speaker 1: How does you know you've been an architect of Netflix
Speaker 1: for years now, but how does the view look different
Speaker 1: at all? If how does the view look different, if
Speaker 1: at all as co CEO? Well, you know, I like,
Speaker 1: like to your point, Read and I've been doing this
Speaker 1: together for a really long time. You know, the migration
Speaker 1: from DVD to streaming and streaming to original production, and
Speaker 1: from the domestic to international and global, all those things
Speaker 1: we were, you know, very closely aligned and making those
Speaker 1: decisions both how to time them out, how to invest
Speaker 1: in them, how to build the teams to support. You know,
Speaker 1: we've done all those things together for a very long time,
Speaker 1: so Read very generously says, we've been I've been co
Speaker 1: CEO for a long time, but um, this is more
Speaker 1: uh so people. I would say that my day to
Speaker 1: day hasn't changed very dramatically because we've been running things
Speaker 1: that way for a long time. UM. And I think
Speaker 1: it's been you know, under Getting the opportunity to do
Speaker 1: this with somebody a real visionary like Read um has
Speaker 1: been a remarkable gift. And I think being able to
Speaker 1: to co lead Netflix with him uh is the gift
Speaker 1: that keeps on giving because it's a it's surprised to
Speaker 1: me to have an executive Usually people have very good
Speaker 1: in the weeds? Are they very good on the clouds?
Speaker 1: And Read is really good in both you know, and
Speaker 1: his ability to look see around the corner, uh to
Speaker 1: ask hard questions about things that he really doesn't you know,
Speaker 1: may or not have experience in um has been something
Speaker 1: that has enabled me to run fast. His kind of
Speaker 1: lack of ego in this uh to been able to
Speaker 1: to allow me to exist at the profile that I
Speaker 1: do with Netflix all this time is really unusual as
Speaker 1: you know, uh in an entertainment company. So it's been
Speaker 1: a great thing and I think my day to day,
Speaker 1: while it hasn't shifted much, I really are looking forward
Speaker 1: to the to the next several years doing this together.
Speaker 1: So it's really an exciting time. Well again to you
Speaker 1: can't find two executives that have had a bigger impact
Speaker 1: on the global business of entertainment in the in many decades.
Speaker 1: So uh, ted, we thank you for your time, thank
Speaker 1: you for answering all of my questions, and uh again,
Speaker 1: congratulations on the Vanguard award from Variety and mipcom. That
Speaker 1: is very very well deserved. Thank you so it Do
Speaker 1: you mind if I take a second and thank a
Speaker 1: few folks for this once again. I wanted first of
Speaker 1: all all of our members around the world, many of
Speaker 1: which are stuck at home or sometimes some have who
Speaker 1: have been affected by the by the impact of of
Speaker 1: the of the COVID nineteen Uh. Our thoughts and prayers
Speaker 1: are with you and our goals to keep you entertained
Speaker 1: while you're home. Uh. Obviously I think nip COM and
Speaker 1: Variety for this great honor you send it to me
Speaker 1: ahead of time. Thank you so much. Uh. I've got
Speaker 1: One of the great gifts of this role is you
Speaker 1: get to to meet all your heroes and uh, in
Speaker 1: the last lesson, just in the last year, uh, some
Speaker 1: of got had lost a few of them. We have
Speaker 1: gotten to be very very friendly, very friendly with and
Speaker 1: inspired by like Leonard Goldberg, who put almost every show
Speaker 1: that I cared about on television when I was young. Uh,
Speaker 1: Carl Reiner on top of being a real architect of television,
Speaker 1: you know, starting back, you know, with with your show
Speaker 1: of shows. And think Ben Dyke's enormous influence on me,
Speaker 1: um and getting to know him before he passed. A
Speaker 1: real kind of guy. Basically, I think of Carl Ryner
Speaker 1: is like the origin of American comedy. Uh. So it's
Speaker 1: just it was a real joy in my life to
Speaker 1: get to know him before he passed. Uh. And then
Speaker 1: it makes you really appreciate the legends who are still around,
Speaker 1: who I could pick up the phone and get advice
Speaker 1: from or support from or kicked kicked by. And that's
Speaker 1: folks like Bob Dailey, Uh, you know, he right after
Speaker 1: right after Bill Paley in television. It's a really remarkable
Speaker 1: resource to get to have to have Bob WoT speed
Speaker 1: dial a Norman Lear uh, who you know who is
Speaker 1: not just a legend from the beginning of television and
Speaker 1: maybe the first guy who was first to be a
Speaker 1: television writer before he was a radio writer and still
Speaker 1: doing it, still making great television uh, and such an
Speaker 1: incredibly decent human being. And I'm just it's a real
Speaker 1: gift to have access to folks like that and and
Speaker 1: doing all this work. Um, it takes a lot of time,
Speaker 1: and it takes me a lot of time away from home. Uh.
Speaker 1: And of course I just none of that, None of
Speaker 1: this would be possible without the sacrifice and support and
Speaker 1: love of my wife Nicole uh and my kids, Tony
Speaker 1: and Sarah, whom we met. We all make trade offs
Speaker 1: to make all this work. And I just endlessly appreciative
Speaker 1: of the time and support, bigot. Thanks for listening. Be
Speaker 1: sure to tune in next week for another episode of
Speaker 1: Strictly Business. Strictly Business is brought to you in part
Speaker 1: by City National Bank, the bank who makes it their
Speaker 1: business to be personal. A City National relationship manager can
Speaker 1: anticipate the financial needs that make the entertainment and tech
Speaker 1: industries tick. That's because they've been doing it for more
Speaker 1: In sixty five years. Need to figure out day to
Speaker 1: day finances done. Someone that understands intellectual property, licensing and
Speaker 1: royalties absolutely. City National understands the industry because they were
Speaker 1: born in it. Visit c NB dot com and get started.
Speaker 1: City National Bank member f d I C