1 00:00:00,160 --> 00:00:02,360 Speaker 1: We want to pivot though, now to the Bloomberg screen 2 00:00:02,480 --> 00:00:07,080 Speaker 1: Time event, where Bloomberg's Lucas Shaw is with Netflix co 3 00:00:07,280 --> 00:00:10,280 Speaker 1: CEO Ted Sarandas. Let's listen in good morning. 4 00:00:10,400 --> 00:00:13,480 Speaker 2: Yeah, thanks for being here. I know you've had a busy. 5 00:00:13,440 --> 00:00:14,920 Speaker 1: Yeah, so what's going How was your week? 6 00:00:18,200 --> 00:00:19,239 Speaker 2: My week was pretty good. 7 00:00:19,720 --> 00:00:21,599 Speaker 1: Yeah. Hey, if you don't mind, before we start, I 8 00:00:21,640 --> 00:00:23,279 Speaker 1: just wanted to say something real quick. It's just on 9 00:00:23,400 --> 00:00:26,040 Speaker 1: top of mind and my heart right now. You know, 10 00:00:26,280 --> 00:00:28,560 Speaker 1: we're here talking a lot about the future of media. 11 00:00:29,560 --> 00:00:31,720 Speaker 1: A lot of folks in Israel are still reeling from 12 00:00:31,760 --> 00:00:36,720 Speaker 1: this horrific terrorist attack by a moss and I'm reminded 13 00:00:36,760 --> 00:00:38,440 Speaker 1: all the time when these things happen how small the 14 00:00:38,440 --> 00:00:41,159 Speaker 1: world is. Many of us in this room probably have 15 00:00:41,720 --> 00:00:44,160 Speaker 1: lost friends and family, or friends of friends and family 16 00:00:44,200 --> 00:00:47,879 Speaker 1: of friends and family. And at Netflix, one of the 17 00:00:47,960 --> 00:00:51,199 Speaker 1: victims of this terrorist attack, the or Whitesman, I was 18 00:00:51,240 --> 00:00:55,080 Speaker 1: working on our first Netflix original series there called Bros. 19 00:00:55,080 --> 00:00:57,840 Speaker 1: Worked in the sound department. On Saturday morning, out biking, 20 00:00:58,400 --> 00:01:00,960 Speaker 1: stopped and texted his wife that there's been a shooting. 21 00:01:01,800 --> 00:01:04,080 Speaker 1: And that's the last you heard from him. Because he 22 00:01:04,120 --> 00:01:06,679 Speaker 1: was a victim of that terrorist attack. It's a horrific 23 00:01:06,840 --> 00:01:09,680 Speaker 1: thing that's happened in the world, and I just want 24 00:01:09,680 --> 00:01:11,039 Speaker 1: to say our hearts are out to Leor and his 25 00:01:11,120 --> 00:01:13,640 Speaker 1: family and anyone else who may have lost somebody initial 26 00:01:13,880 --> 00:01:18,920 Speaker 1: on Saturday. Thank you for sharing that. I don't mean 27 00:01:19,080 --> 00:01:20,839 Speaker 1: you are. By the way, it was fantastic. He worked 28 00:01:20,880 --> 00:01:24,120 Speaker 1: on Fouda and Taranva at Apple. 29 00:01:23,880 --> 00:01:27,360 Speaker 2: And that made me so even though that this is 30 00:01:27,400 --> 00:01:30,679 Speaker 2: your first Israeli original that we produce. Yes as Fouda 31 00:01:30,840 --> 00:01:35,319 Speaker 2: came out, it was a co production, got it. I'm 32 00:01:35,319 --> 00:01:38,880 Speaker 2: just curious what I assume the production has shut down 33 00:01:38,959 --> 00:01:39,200 Speaker 2: on that? 34 00:01:39,440 --> 00:01:43,280 Speaker 1: Sure, Yeah, thank you for indulging that. 35 00:01:44,840 --> 00:01:47,800 Speaker 2: No, as with yesterday, with already, there is no seamless 36 00:01:47,800 --> 00:01:48,800 Speaker 2: way to transition out of that. 37 00:01:48,880 --> 00:01:50,720 Speaker 1: Yeah, I'm gonna start to do my best. But they 38 00:01:50,760 --> 00:01:53,600 Speaker 1: did not break rhythm, not at all. You know. 39 00:01:53,680 --> 00:01:56,440 Speaker 2: One of the themes of this event, one of the 40 00:01:56,480 --> 00:02:00,200 Speaker 2: big things happening in the industry obviously, is there's we're 41 00:02:00,200 --> 00:02:05,280 Speaker 2: in a ceaseless moment of kind of tumult and change. 42 00:02:05,440 --> 00:02:08,040 Speaker 2: A lot of people or a lot of that comes 43 00:02:08,040 --> 00:02:12,160 Speaker 2: from companies like you, companies like YouTube, and we've reached 44 00:02:12,160 --> 00:02:15,480 Speaker 2: this point where it's clear that sort of streaming has won, right, 45 00:02:15,840 --> 00:02:19,520 Speaker 2: or at least it is slowly replacing television as the 46 00:02:19,560 --> 00:02:20,760 Speaker 2: dominant way that people watch. 47 00:02:20,880 --> 00:02:23,720 Speaker 1: I mean, ultimately, consumers decide what wins, right, and I 48 00:02:23,760 --> 00:02:26,960 Speaker 1: think they're saying loud and clear that they like the 49 00:02:26,960 --> 00:02:28,400 Speaker 1: control and the choice of streaming. 50 00:02:28,600 --> 00:02:32,799 Speaker 2: But there remains a pretty healthy amount of skepticism as 51 00:02:33,120 --> 00:02:37,960 Speaker 2: to streaming as a business. Now, you guys are profitable, 52 00:02:38,560 --> 00:02:40,440 Speaker 2: some people would say, and we can debate this, that 53 00:02:40,520 --> 00:02:44,200 Speaker 2: you are less profitable than the most profitable TV networks were. 54 00:02:44,480 --> 00:02:46,880 Speaker 2: Pretty much every other media company that is trying to 55 00:02:46,880 --> 00:02:49,880 Speaker 2: compete with you is losing money trying to do that. 56 00:02:50,360 --> 00:02:53,840 Speaker 2: So give me the case for why you think streaming 57 00:02:54,160 --> 00:02:56,440 Speaker 2: is already a good business and we'll only get better 58 00:02:56,480 --> 00:02:57,040 Speaker 2: going forward. 59 00:02:57,120 --> 00:02:58,760 Speaker 1: Yeah. Look, I think it's a great business, and I 60 00:02:58,800 --> 00:03:03,000 Speaker 1: think it is it's infancy. We've been streaming for you know, 61 00:03:03,040 --> 00:03:06,000 Speaker 1: in some form for about sixteen years, and our original 62 00:03:06,080 --> 00:03:08,520 Speaker 1: content initiative. We just passed our tenth anniversary of our 63 00:03:08,560 --> 00:03:11,320 Speaker 1: first original show. So if you think about it in 64 00:03:11,320 --> 00:03:13,440 Speaker 1: that way, and you think about the network business that's 65 00:03:13,480 --> 00:03:16,640 Speaker 1: been at it for seventy five plus years before that, 66 00:03:16,639 --> 00:03:18,440 Speaker 1: there most of those were radio networks, so they've been 67 00:03:18,440 --> 00:03:21,280 Speaker 1: at this for a very long time, and I think 68 00:03:21,280 --> 00:03:25,800 Speaker 1: that ultimately these consumer driven things caused businesses to react 69 00:03:25,960 --> 00:03:30,400 Speaker 1: and reshuffle. And I'd say consumer driven because like now, 70 00:03:30,400 --> 00:03:32,320 Speaker 1: we didn't just put something on there and say now 71 00:03:32,360 --> 00:03:34,960 Speaker 1: this is how you have to watch. When we started 72 00:03:35,000 --> 00:03:40,760 Speaker 1: doing this streaming actually i would say saved this industry 73 00:03:41,320 --> 00:03:44,160 Speaker 1: because where we were heading at that time. Remember we 74 00:03:44,200 --> 00:03:47,440 Speaker 1: started this business of streaming. We started licensing content from 75 00:03:47,440 --> 00:03:50,080 Speaker 1: the networks, and at the time that we were licensing, 76 00:03:50,680 --> 00:03:53,200 Speaker 1: we could only get what was available, which was nothing. 77 00:03:53,760 --> 00:03:55,680 Speaker 1: So we were licensing from the bottom of the barrel, 78 00:03:55,680 --> 00:03:59,040 Speaker 1: things that had no revenue for anybody, shows that didn't 79 00:03:59,040 --> 00:04:01,440 Speaker 1: get the syndication, things that weren't otherwise. 80 00:04:01,080 --> 00:04:03,600 Speaker 2: Sold, kind of like what to be in. Some of 81 00:04:03,640 --> 00:04:06,200 Speaker 2: the AVOD services did, right. It came around where they 82 00:04:06,200 --> 00:04:06,960 Speaker 2: started and we. 83 00:04:06,920 --> 00:04:09,440 Speaker 1: Gave it away with the DVD business, and it was 84 00:04:09,520 --> 00:04:12,160 Speaker 1: you got what you paid for back then. But I'd 85 00:04:12,160 --> 00:04:14,440 Speaker 1: say what happened was that's created a whole new revenue 86 00:04:14,440 --> 00:04:16,839 Speaker 1: stream for the networks. In the studios, It created a 87 00:04:16,839 --> 00:04:20,279 Speaker 1: whole new residual revenue stream for actors and performers who 88 00:04:20,360 --> 00:04:22,440 Speaker 1: performed in those projects that were sitting on the shelf 89 00:04:23,160 --> 00:04:25,160 Speaker 1: and really kind of got the ball rolling in a 90 00:04:25,200 --> 00:04:27,080 Speaker 1: way that you know that we you know, obviously, I 91 00:04:27,080 --> 00:04:29,640 Speaker 1: think these things can take decades to build. But with 92 00:04:29,760 --> 00:04:33,240 Speaker 1: their big, meaningful businesses, you know, that's that's a good investment, and. 93 00:04:33,240 --> 00:04:34,560 Speaker 3: I'd say good good business. 94 00:04:34,560 --> 00:04:36,280 Speaker 1: For us, it's you know, thirty two billion dollars of 95 00:04:36,320 --> 00:04:39,760 Speaker 1: revenue and six billion dollars of profit, and we've been 96 00:04:39,880 --> 00:04:41,920 Speaker 1: growing the business pretty dramatically and pretty quick. 97 00:04:42,000 --> 00:04:43,000 Speaker 3: We grew pretty quickly. 98 00:04:43,400 --> 00:04:45,400 Speaker 1: We're not growing as fast right now as we want to, 99 00:04:45,440 --> 00:04:46,680 Speaker 1: but we are still growing the business. 100 00:04:46,760 --> 00:04:49,440 Speaker 2: So I'm curious on that point because you you guys, 101 00:04:49,440 --> 00:04:51,600 Speaker 2: in your remarks, I think your last earning support talked 102 00:04:51,600 --> 00:04:53,960 Speaker 2: about how you still aren't growing as quickly as you'd 103 00:04:53,960 --> 00:04:56,400 Speaker 2: like to. There was a point in time where every year, 104 00:04:56,440 --> 00:04:58,880 Speaker 2: like clockwork, Netflix would basically add twenty five million to 105 00:04:58,920 --> 00:05:02,960 Speaker 2: thirty million customers. That obviously post pandemic has come way down. 106 00:05:04,440 --> 00:05:06,719 Speaker 2: What are you doing about that? And do you think 107 00:05:06,760 --> 00:05:09,440 Speaker 2: you can get back to the level of growth you 108 00:05:09,480 --> 00:05:11,240 Speaker 2: were at three four years ago. 109 00:05:11,320 --> 00:05:13,760 Speaker 1: Look, I think the key to it is growing the 110 00:05:14,000 --> 00:05:16,720 Speaker 1: growing revenue, and I think for us, that's a combination 111 00:05:16,920 --> 00:05:19,400 Speaker 1: of you know, putting a great product on the board. 112 00:05:19,800 --> 00:05:21,680 Speaker 1: When you talk about is streaming a good business, it 113 00:05:21,760 --> 00:05:23,440 Speaker 1: is if you do it well. And I think I 114 00:05:23,480 --> 00:05:27,520 Speaker 1: would say the team at Netflix in terms of the programming, 115 00:05:27,800 --> 00:05:30,880 Speaker 1: Bella Bajari and her team are phenomenal at focusing on 116 00:05:30,960 --> 00:05:34,320 Speaker 1: what people love, and their creative team is great at 117 00:05:34,360 --> 00:05:37,520 Speaker 1: delivering for what people love. The team that delivers the 118 00:05:37,680 --> 00:05:41,440 Speaker 1: UI experience something that happens at Netflix that's almost impossible 119 00:05:41,440 --> 00:05:44,880 Speaker 1: anywhere else. And I'd say because of our distribution footprint 120 00:05:44,920 --> 00:05:47,880 Speaker 1: and our recommendations that you have the ability, if you're 121 00:05:47,880 --> 00:05:50,920 Speaker 1: telling a story from Korea, to be the biggest television 122 00:05:50,920 --> 00:05:53,760 Speaker 1: show in the world. That can only happen on Netflix. 123 00:05:54,520 --> 00:05:57,359 Speaker 1: And it's not just taking obscurity and making it big. 124 00:05:57,680 --> 00:06:02,800 Speaker 1: Imagine somebody as big as David Beckham who releases his 125 00:06:03,120 --> 00:06:06,400 Speaker 1: documentary on Netflix and in days grows his social media 126 00:06:06,440 --> 00:06:07,919 Speaker 1: following by half a million people. 127 00:06:08,920 --> 00:06:10,480 Speaker 3: And I think this happens over and over again. 128 00:06:10,640 --> 00:06:14,599 Speaker 1: The combination of our distribution, footprint and recommendation and which 129 00:06:14,640 --> 00:06:16,640 Speaker 1: I think is what distinguishes the business and the way 130 00:06:16,680 --> 00:06:19,000 Speaker 1: you grow it is by keep doing that better and better, 131 00:06:19,160 --> 00:06:22,200 Speaker 1: and the opportunity to grow it is enormous. We're about 132 00:06:22,240 --> 00:06:25,880 Speaker 1: ten percent of screen time when people are using watching 133 00:06:25,880 --> 00:06:29,200 Speaker 1: on their TV at home, about ten percent in our 134 00:06:29,200 --> 00:06:32,480 Speaker 1: most penetrated markets like the US around the world are 135 00:06:32,560 --> 00:06:36,359 Speaker 1: significantly smaller. We're about five percent of consumer spending and 136 00:06:36,400 --> 00:06:39,960 Speaker 1: the businesses that we're in, which is paid television, advertising, 137 00:06:40,000 --> 00:06:43,120 Speaker 1: supported television, and games and so as you look at 138 00:06:43,160 --> 00:06:44,920 Speaker 1: that of the air and we're just in our infancy 139 00:06:44,920 --> 00:06:47,680 Speaker 1: in those businesses and about five percent of consumer spending. 140 00:06:48,040 --> 00:06:50,440 Speaker 1: So we've a ton of room to grow revenue from here. 141 00:06:50,600 --> 00:06:54,960 Speaker 1: And I'd say that we're pretty underpriced based on those 142 00:06:55,040 --> 00:06:57,280 Speaker 1: kind of statistics of ten percent of screen time and 143 00:06:57,320 --> 00:06:59,839 Speaker 1: five percent of revenue, So I think that there's a 144 00:07:00,200 --> 00:07:02,400 Speaker 1: there's plenty of room to grow as long as we're 145 00:07:03,080 --> 00:07:05,240 Speaker 1: you know, have a high level of satisfaction with the 146 00:07:05,279 --> 00:07:07,960 Speaker 1: product the consumers. You know, it's a one button, easy 147 00:07:08,000 --> 00:07:10,840 Speaker 1: cancel service. So if you're not loving the new season 148 00:07:10,920 --> 00:07:13,840 Speaker 1: of The Crown when it comes out of November, you jump. 149 00:07:14,320 --> 00:07:16,920 Speaker 1: So we know we have a constant feedback circle with 150 00:07:17,040 --> 00:07:19,800 Speaker 1: our feedback loop with our members that if we're not 151 00:07:19,800 --> 00:07:20,680 Speaker 1: pleasing them, they jump. 152 00:07:20,800 --> 00:07:23,679 Speaker 2: Yeah, So you said underpriced, when is the next Netflix 153 00:07:23,680 --> 00:07:24,560 Speaker 2: price increase? Coming. 154 00:07:26,960 --> 00:07:30,040 Speaker 1: Nothing to announce, but our pricing philosophy has not changed, 155 00:07:30,040 --> 00:07:31,880 Speaker 1: which is we have to add more value to the 156 00:07:31,920 --> 00:07:34,320 Speaker 1: consumer and as then we come back and ask them 157 00:07:34,320 --> 00:07:35,640 Speaker 1: to pay a little bit more for it if they 158 00:07:35,720 --> 00:07:38,800 Speaker 1: if they agree, So it's been a successful formula. 159 00:07:38,840 --> 00:07:42,440 Speaker 2: Have you done on that point? What does your research 160 00:07:42,520 --> 00:07:45,760 Speaker 2: tell you about sort of the upper limit of what 161 00:07:45,800 --> 00:07:48,160 Speaker 2: people would pay before they start to really question the 162 00:07:48,240 --> 00:07:49,400 Speaker 2: value of Netflix? 163 00:07:49,720 --> 00:07:51,800 Speaker 1: You know, we're really we really don't spend that much 164 00:07:51,840 --> 00:07:53,920 Speaker 1: time on trying to figure out how much we'll get. 165 00:07:53,760 --> 00:07:56,320 Speaker 3: You to pay, because I think it's a fluid thing. 166 00:07:56,400 --> 00:07:59,440 Speaker 1: So basically, if you're delivering, you have to continue to deliver, 167 00:07:59,520 --> 00:08:01,840 Speaker 1: so you can't it's all on the hypothetical. So I 168 00:08:01,920 --> 00:08:03,400 Speaker 1: don't want to do is come in at a period 169 00:08:03,400 --> 00:08:05,600 Speaker 1: of great strength and someone say, oh, I'll pay anything 170 00:08:05,640 --> 00:08:07,240 Speaker 1: because I'm in the middle of the new season of 171 00:08:07,280 --> 00:08:09,720 Speaker 1: Stranger Things, and then we have to come back. But 172 00:08:09,760 --> 00:08:11,400 Speaker 1: we do it every week. So you know, a lot 173 00:08:11,440 --> 00:08:13,120 Speaker 1: of these services and a lot of that are out 174 00:08:13,160 --> 00:08:15,680 Speaker 1: there that get a couple of hours of engagement a month. 175 00:08:16,080 --> 00:08:17,960 Speaker 1: You know, we get a couple of hours engagement a day, 176 00:08:18,920 --> 00:08:21,160 Speaker 1: and that to me is like there's all this mystery 177 00:08:21,200 --> 00:08:22,880 Speaker 1: around what is success in streaming. 178 00:08:23,240 --> 00:08:23,960 Speaker 3: It's engagement. 179 00:08:24,040 --> 00:08:25,760 Speaker 1: It is how much time do people spend on the service, 180 00:08:25,800 --> 00:08:27,680 Speaker 1: because that tells you how much they'll pay and how 181 00:08:27,680 --> 00:08:28,520 Speaker 1: long they'll stick around. 182 00:08:29,160 --> 00:08:35,079 Speaker 2: So I'm curious you mentioned the success which is been 183 00:08:35,080 --> 00:08:37,160 Speaker 2: a subject of a lot of discussion over the years 184 00:08:37,200 --> 00:08:41,199 Speaker 2: with regard to with you guys and streaming more broadly, 185 00:08:41,280 --> 00:08:44,240 Speaker 2: is it feels like people have less visibility into what 186 00:08:44,400 --> 00:08:47,200 Speaker 2: works and aren't really sure what you guys think matters. 187 00:08:49,200 --> 00:08:52,559 Speaker 2: What are the metrics for Netflix that are most important 188 00:08:52,600 --> 00:08:54,840 Speaker 2: when evaluating a show for a movie. 189 00:08:55,080 --> 00:08:56,520 Speaker 1: You guys take us the task a lot. On this 190 00:08:56,559 --> 00:09:00,920 Speaker 1: transparency issue, I would say, look definitely relative to we're 191 00:09:00,960 --> 00:09:04,600 Speaker 1: incredibly transparent, and we're completely transparent with our producers, so 192 00:09:04,640 --> 00:09:08,880 Speaker 1: they know exactly the viewing data. And then we're going 193 00:09:08,960 --> 00:09:10,760 Speaker 1: you know, through things like the top ten and through 194 00:09:10,800 --> 00:09:14,560 Speaker 1: things like we published the viewing hours of the top shows, 195 00:09:14,840 --> 00:09:18,560 Speaker 1: and we're definitely heading towards a much more transparent time 196 00:09:18,600 --> 00:09:21,319 Speaker 1: in the business. Streaming itself is not that exotic anymore, 197 00:09:21,480 --> 00:09:23,840 Speaker 1: and every other segment of the business does have you know, 198 00:09:23,960 --> 00:09:26,760 Speaker 1: Nielsen ratings or box office reports or the New York 199 00:09:26,760 --> 00:09:29,400 Speaker 1: Times Best hour list, all those things. So we're heading 200 00:09:29,440 --> 00:09:32,079 Speaker 1: towards that for sure to a moment to a time 201 00:09:32,120 --> 00:09:33,960 Speaker 1: will be fully transparent on viewing data. 202 00:09:34,040 --> 00:09:34,680 Speaker 2: Does that mean it? 203 00:09:35,400 --> 00:09:35,520 Speaker 3: You know? 204 00:09:36,040 --> 00:09:38,200 Speaker 1: So that will demystify this for a lot of people, 205 00:09:38,520 --> 00:09:40,520 Speaker 1: which is basically what I can care about the most 206 00:09:40,600 --> 00:09:42,679 Speaker 1: is relative to what it costs to put on the air? 207 00:09:42,760 --> 00:09:45,520 Speaker 1: Are people watching? And when they push play? Do they stay? 208 00:09:46,120 --> 00:09:47,800 Speaker 1: So if they push play and they drop out in 209 00:09:47,800 --> 00:09:51,040 Speaker 1: the second or third season or completion rate for yeah, 210 00:09:51,080 --> 00:09:53,120 Speaker 1: So those things all matter, but they all add up 211 00:09:53,120 --> 00:09:54,959 Speaker 1: to the same thing, which is engagement. So I think 212 00:09:55,000 --> 00:09:57,600 Speaker 1: you can all the data is really there. You might 213 00:09:57,640 --> 00:09:59,280 Speaker 1: have to triangulate a little bit to get to it, 214 00:09:59,280 --> 00:10:00,680 Speaker 1: but all the data is really there. 215 00:10:01,080 --> 00:10:04,360 Speaker 2: What was the toughest cancelation decision you've had recently? 216 00:10:04,640 --> 00:10:06,680 Speaker 1: They're all tough. You know. The reason why because I 217 00:10:06,679 --> 00:10:10,000 Speaker 1: think the people have got a real fandom. They really 218 00:10:10,080 --> 00:10:13,400 Speaker 1: love these Some people really love all these shows, even 219 00:10:13,440 --> 00:10:15,480 Speaker 1: if even if the rest of the world doesn't agree 220 00:10:15,480 --> 00:10:17,960 Speaker 1: with them. So for them, that's why you see sometimes 221 00:10:17,960 --> 00:10:21,079 Speaker 1: these very obscure shows and you hear very loud campaigns 222 00:10:21,120 --> 00:10:24,040 Speaker 1: about stop the cancelations because they have such an intense 223 00:10:24,080 --> 00:10:26,200 Speaker 1: relationship with it. That's why I love this business so much. 224 00:10:26,800 --> 00:10:29,280 Speaker 1: A I relate to it a lot of Sometimes my 225 00:10:29,360 --> 00:10:32,000 Speaker 1: personal taste is really far outside of the outside of 226 00:10:32,040 --> 00:10:34,120 Speaker 1: the norm, and I just what I've been decent at 227 00:10:34,160 --> 00:10:36,880 Speaker 1: over the years, and and and pick people who are 228 00:10:36,920 --> 00:10:39,000 Speaker 1: good at doing this. But when I look at it, 229 00:10:39,040 --> 00:10:40,400 Speaker 1: I think it's that, you know, some of them was 230 00:10:40,400 --> 00:10:43,800 Speaker 1: programming to my taste, we'd be very small. But so 231 00:10:43,800 --> 00:10:45,920 Speaker 1: we're trying to program to the to the world's taste. 232 00:10:46,559 --> 00:10:49,400 Speaker 1: But they're all hard. There really are all difficult decisions 233 00:10:49,400 --> 00:10:52,320 Speaker 1: to make because people love these shows so much, and 234 00:10:52,320 --> 00:10:54,920 Speaker 1: and and you know, there's some some things are just 235 00:10:54,960 --> 00:10:56,920 Speaker 1: a puzzle. You scratch your head. But relative to what 236 00:10:56,960 --> 00:10:58,640 Speaker 1: it costs to put on the air, you know, do 237 00:10:58,760 --> 00:11:00,360 Speaker 1: we pick a good show, do we exteally cute on 238 00:11:00,400 --> 00:11:00,720 Speaker 1: it well? 239 00:11:00,800 --> 00:11:03,120 Speaker 3: And did we pay the right price to make it right? 240 00:11:03,200 --> 00:11:05,680 Speaker 2: So I'm wondering. You know, you talked about the world's 241 00:11:05,720 --> 00:11:09,280 Speaker 2: taste and that has I think as Netflix has expanded, 242 00:11:09,320 --> 00:11:15,679 Speaker 2: your approach to programming has evolved as well. You also 243 00:11:15,760 --> 00:11:18,959 Speaker 2: mentioned that you started programming. It's been about ten years, 244 00:11:19,280 --> 00:11:22,120 Speaker 2: would you say since? And when you started? That was 245 00:11:22,160 --> 00:11:23,840 Speaker 2: when a lot of people talked about sort of the 246 00:11:23,880 --> 00:11:26,240 Speaker 2: golden age of TV, right this was coming out of 247 00:11:26,320 --> 00:11:30,280 Speaker 2: Mad Med and Breaking Bad some other shows. Then we 248 00:11:30,320 --> 00:11:33,360 Speaker 2: got ushered into the era of peak TV, where there 249 00:11:33,440 --> 00:11:36,640 Speaker 2: was just more and more being made. Do you think 250 00:11:36,679 --> 00:11:39,160 Speaker 2: that the film and TV being made now is better 251 00:11:39,240 --> 00:11:40,720 Speaker 2: or worse than it was when you started? 252 00:11:41,559 --> 00:11:44,160 Speaker 1: I think it's better because there's more of it at 253 00:11:44,160 --> 00:11:46,599 Speaker 1: a very high quality, so basically there's more more to 254 00:11:46,679 --> 00:11:50,680 Speaker 1: choose from. I think there's something really romantic about you know, 255 00:11:50,720 --> 00:11:52,480 Speaker 1: press TV. It's what we do a lot of it too. 256 00:11:53,320 --> 00:11:55,559 Speaker 1: Beat Beef this year, when you see the new season 257 00:11:55,559 --> 00:11:58,120 Speaker 1: of the Ground is probably the most ambitious, you know, 258 00:11:58,520 --> 00:12:01,240 Speaker 1: works you've seen on television maybe in the history of television. 259 00:12:01,559 --> 00:12:03,080 Speaker 1: So I do think that there's part of that that's 260 00:12:03,080 --> 00:12:04,920 Speaker 1: really important. What I'd love to do is take those 261 00:12:04,960 --> 00:12:09,400 Speaker 1: shows that are incredibly well executed, critically acclaimed, award winning 262 00:12:09,760 --> 00:12:13,160 Speaker 1: and popular, and I think things like Beef. I'm really 263 00:12:13,200 --> 00:12:15,880 Speaker 1: excited about Beef this year because this is one of 264 00:12:15,920 --> 00:12:18,000 Speaker 1: the critics wrote it that is the most popular piece 265 00:12:18,000 --> 00:12:20,320 Speaker 1: of art of the decade, and that's a really great 266 00:12:20,360 --> 00:12:23,120 Speaker 1: place to be. So it's something that people really love 267 00:12:23,120 --> 00:12:25,240 Speaker 1: and admire and I think about critics and awards as 268 00:12:25,320 --> 00:12:28,240 Speaker 1: a constituency, a group of influencers, and what they like 269 00:12:28,280 --> 00:12:31,280 Speaker 1: is important, but so is what the audience likes, and 270 00:12:31,280 --> 00:12:34,400 Speaker 1: that's what really drives us. Right. But I do think 271 00:12:34,440 --> 00:12:36,040 Speaker 1: like there's every once in a while you think, oh, 272 00:12:36,040 --> 00:12:38,280 Speaker 1: what's going on with TV? And then something fantastic lands 273 00:12:38,360 --> 00:12:41,080 Speaker 1: every time, And I think the more at the more times, 274 00:12:41,080 --> 00:12:43,400 Speaker 1: the more shots on goal you get at it, the 275 00:12:43,440 --> 00:12:45,440 Speaker 1: more likely you're going to get something that really breaks through. 276 00:12:45,559 --> 00:12:49,760 Speaker 1: And sometimes it's completely unintuitive. Squid Game did nothing to 277 00:12:49,760 --> 00:12:53,080 Speaker 1: be a global show. It's made for Korea. It's pure 278 00:12:53,160 --> 00:12:56,679 Speaker 1: Korean cinema in the form of a TV series, and 279 00:12:56,840 --> 00:12:59,839 Speaker 1: it is the most watched show in Netflix history and 280 00:13:00,280 --> 00:13:02,160 Speaker 1: likely the history of television in the time period that 281 00:13:02,200 --> 00:13:02,559 Speaker 1: it was on. 282 00:13:02,800 --> 00:13:06,440 Speaker 2: Right, you guys have that. I mean, you still program 283 00:13:06,520 --> 00:13:09,640 Speaker 2: more than anyone else, basically to your point, you put 284 00:13:09,679 --> 00:13:13,200 Speaker 2: out multiple new pieces of content every week. Others do not, 285 00:13:13,679 --> 00:13:16,200 Speaker 2: But you have leveled that off. I think we showed 286 00:13:16,200 --> 00:13:18,480 Speaker 2: the chart earlier where you sort of hit like seventeen 287 00:13:18,559 --> 00:13:21,600 Speaker 2: eighteen billion and said, Okay, that's a good amount. Does 288 00:13:21,640 --> 00:13:22,840 Speaker 2: the it's a. 289 00:13:22,800 --> 00:13:24,720 Speaker 1: Good amount for It's good enough for now. Like I said, 290 00:13:24,720 --> 00:13:28,080 Speaker 1: I think as we continue to accelerate revenue and subscriber growth, 291 00:13:28,200 --> 00:13:29,679 Speaker 1: we'll continue to add to that too. 292 00:13:29,679 --> 00:13:33,320 Speaker 2: Got it. Yeah, as you see some of your peers 293 00:13:33,480 --> 00:13:37,480 Speaker 2: pull back a little bit, especially overseas, do you think 294 00:13:37,520 --> 00:13:38,240 Speaker 2: that's a mistake. 295 00:13:39,240 --> 00:13:42,120 Speaker 1: Look, it's hard for people to remember that we're a 296 00:13:42,120 --> 00:13:44,240 Speaker 1: big global company. So you know, two thirds of our 297 00:13:44,280 --> 00:13:47,080 Speaker 1: subscribers are outside of the US, and I think it's 298 00:13:47,480 --> 00:13:49,120 Speaker 1: one thing. We first started doing this, I thought it 299 00:13:49,160 --> 00:13:53,520 Speaker 1: was kind of an unusual figure that about eighty percent 300 00:13:53,640 --> 00:13:56,800 Speaker 1: of television viewing around the world was US content and 301 00:13:56,840 --> 00:13:59,480 Speaker 1: we're five percent of the population, And I figured it 302 00:13:59,480 --> 00:14:02,320 Speaker 1: probably is isn't the taste thing, It's probably a distribution thing. 303 00:14:02,840 --> 00:14:05,560 Speaker 1: People didn't have access to, or certain markets may not 304 00:14:05,600 --> 00:14:08,200 Speaker 1: have had the scale to produce the way that Japan 305 00:14:08,240 --> 00:14:10,960 Speaker 1: did or Korea did, which had very big local audiences 306 00:14:11,000 --> 00:14:13,880 Speaker 1: and very big local taste, so they weren't they didn't 307 00:14:13,920 --> 00:14:17,079 Speaker 1: care that much for international, including US content, but mostly 308 00:14:17,080 --> 00:14:18,640 Speaker 1: because they didn't have access to it, the same way 309 00:14:18,679 --> 00:14:19,160 Speaker 1: we didn't have. 310 00:14:19,120 --> 00:14:21,080 Speaker 3: Access to Korean shows. Before. 311 00:14:21,240 --> 00:14:23,360 Speaker 1: You know, people fell in love with Good Game or 312 00:14:23,400 --> 00:14:25,920 Speaker 1: Spanish television before they fell in love with LaCOSA di 313 00:14:26,040 --> 00:14:29,160 Speaker 1: Papal or French TV like lupon so, And I just 314 00:14:29,160 --> 00:14:31,080 Speaker 1: think that that keeps happening over and over again because 315 00:14:31,120 --> 00:14:33,400 Speaker 1: you can produce as long as you really focus on 316 00:14:33,440 --> 00:14:36,160 Speaker 1: the local audience. You could produce at a slightly larger 317 00:14:36,200 --> 00:14:38,280 Speaker 1: scale because if you really kill it, you can get 318 00:14:38,280 --> 00:14:41,200 Speaker 1: out there globally. And that the ability that we could. 319 00:14:41,240 --> 00:14:43,560 Speaker 1: We brought that to the table and I do so. 320 00:14:43,600 --> 00:14:45,120 Speaker 1: I do think for me when I look at that, 321 00:14:45,200 --> 00:14:48,240 Speaker 1: it's like, I'm glad we're not pulling back. In fact, 322 00:14:48,240 --> 00:14:51,280 Speaker 1: we're growing our production outside of the US and in 323 00:14:51,360 --> 00:14:54,840 Speaker 1: multiple languages, produce it almost every language now and so 324 00:14:55,160 --> 00:14:56,600 Speaker 1: I feel like there's still a lot of room to 325 00:14:56,640 --> 00:14:58,880 Speaker 1: grow there. So when I watched them pull out of it, 326 00:14:58,880 --> 00:15:00,960 Speaker 1: I think it's because the streaming, while it is a 327 00:15:01,040 --> 00:15:03,480 Speaker 1: very good business, it's a hard one and it's when 328 00:15:03,560 --> 00:15:04,760 Speaker 1: you have to do well and you have to do 329 00:15:04,760 --> 00:15:07,640 Speaker 1: it at scale, and it's really hard on legacy businesses 330 00:15:07,720 --> 00:15:08,520 Speaker 1: trying to navigate that. 331 00:15:08,840 --> 00:15:13,120 Speaker 2: Yeah. One of the or the pole question that I 332 00:15:13,120 --> 00:15:15,480 Speaker 2: mentioned I was going to ask that I'm happy to 333 00:15:15,480 --> 00:15:19,480 Speaker 2: throw about that is what do you think is going 334 00:15:19,560 --> 00:15:22,200 Speaker 2: to be? This one is about in the last year, 335 00:15:22,240 --> 00:15:24,680 Speaker 2: your favorite series has come from one place, which I'd 336 00:15:24,720 --> 00:15:26,760 Speaker 2: love to hear your answer on. But I'm also curious. 337 00:15:27,080 --> 00:15:29,800 Speaker 2: You know, South Korea has had kind of such a 338 00:15:29,840 --> 00:15:32,080 Speaker 2: moment culture earlier over the last few years. Do you 339 00:15:32,120 --> 00:15:35,040 Speaker 2: have a country that you think is the next South Korea? 340 00:15:35,960 --> 00:15:38,640 Speaker 1: I think people a lot of people ask that because 341 00:15:38,800 --> 00:15:42,560 Speaker 1: they think there was some path that we were on 342 00:15:42,600 --> 00:15:43,920 Speaker 1: to make South Korea and do this thing. 343 00:15:44,360 --> 00:15:46,480 Speaker 2: It wasn't you known as the country that really put 344 00:15:46,560 --> 00:15:47,320 Speaker 2: up in a resources. 345 00:15:47,320 --> 00:15:49,880 Speaker 3: But what I think is fascinating. I think Mexico. 346 00:15:49,960 --> 00:15:51,200 Speaker 1: I see it on the screen, so it's a little 347 00:15:51,240 --> 00:15:54,040 Speaker 1: bit of a cheap, but the production ecosystem and the 348 00:15:54,080 --> 00:15:57,920 Speaker 1: storytelling culture is phenomenal. And I think most American audiences 349 00:15:58,000 --> 00:16:01,680 Speaker 1: think of Mexican TV and as Novella's, and I think 350 00:16:01,720 --> 00:16:04,640 Speaker 1: most people think of a Mexican movies like well, you know, 351 00:16:05,040 --> 00:16:08,080 Speaker 1: Westerns and Canteen Palas and and in fact it's some 352 00:16:08,480 --> 00:16:11,040 Speaker 1: of some of the most incredible storytellers and filmmakers in 353 00:16:11,080 --> 00:16:14,280 Speaker 1: the world are in Mexico right now, and the ecosystem 354 00:16:14,360 --> 00:16:16,400 Speaker 1: for it is getting bigger and bigger. So I'd keep 355 00:16:16,400 --> 00:16:17,080 Speaker 1: an eye in Mexico. 356 00:16:17,200 --> 00:16:19,920 Speaker 2: Okay, we've made it far enough. I have to ask 357 00:16:19,960 --> 00:16:23,640 Speaker 2: about the strike. Studios issued a statement last night saying 358 00:16:23,680 --> 00:16:27,560 Speaker 2: that the gap between the AMPTP and the and the 359 00:16:27,680 --> 00:16:30,600 Speaker 2: actors is too great and that talks are no longer productive. 360 00:16:32,040 --> 00:16:34,120 Speaker 2: A lot of people thought that this would end quickly 361 00:16:34,160 --> 00:16:37,480 Speaker 2: once you guys got the writers deal too, So why 362 00:16:37,560 --> 00:16:38,040 Speaker 2: isn't it. 363 00:16:39,320 --> 00:16:41,320 Speaker 1: Look, I'm gonna let the statement speaks for itself if 364 00:16:41,360 --> 00:16:42,880 Speaker 1: you don't mind. There's a lot of detail in the 365 00:16:42,880 --> 00:16:45,560 Speaker 1: statement around the offers and the current state of it. 366 00:16:46,040 --> 00:16:49,920 Speaker 1: I will say that I know Donna Langley was here yesterday. Uh. 367 00:16:50,000 --> 00:16:52,400 Speaker 1: Donna and I and Bob Jeger and David Zaslov have 368 00:16:52,480 --> 00:16:55,000 Speaker 1: been at the table with with with the with SAG. 369 00:16:56,040 --> 00:17:00,920 Speaker 1: We've been We had very productive talks going. They kind 370 00:17:00,920 --> 00:17:04,280 Speaker 1: of what happened, you know, last night is that you know, 371 00:17:04,320 --> 00:17:08,480 Speaker 1: they introduced this basically a levee on subscribers on top 372 00:17:08,560 --> 00:17:11,240 Speaker 1: of this deal, which you know, in each of the 373 00:17:11,280 --> 00:17:13,120 Speaker 1: areas of the deal, which is all in this statement, 374 00:17:13,359 --> 00:17:17,359 Speaker 1: you see historic highs in terms of the increases across 375 00:17:17,400 --> 00:17:21,800 Speaker 1: the board. Uh. And we had offered a success based bonus, 376 00:17:22,240 --> 00:17:25,080 Speaker 1: meaning that we completely wrap our arms around the idea. 377 00:17:24,800 --> 00:17:27,399 Speaker 2: That similar to what you gofered the Writers or. 378 00:17:27,359 --> 00:17:30,640 Speaker 1: Yeah, very similar inffect, it will cost four to five 379 00:17:30,680 --> 00:17:32,800 Speaker 1: times more to implement it with SAG. 380 00:17:32,600 --> 00:17:37,120 Speaker 3: Because of the participate producipoints UH. And that was rejected. 381 00:17:37,160 --> 00:17:40,679 Speaker 1: And the counter was this levee on every subscriber, and 382 00:17:40,720 --> 00:17:43,520 Speaker 1: prior to that was a levee on all revenue, which. 383 00:17:43,359 --> 00:17:46,119 Speaker 2: Where basically the union will take a certain amount of 384 00:17:46,160 --> 00:17:48,440 Speaker 2: money for every subscriber to a service. 385 00:17:48,200 --> 00:17:52,480 Speaker 1: Correct or and originally it was to every penny of revenue. Right, 386 00:17:53,080 --> 00:17:55,520 Speaker 1: And we said, look, we agree that we could you know, 387 00:17:55,680 --> 00:17:59,000 Speaker 1: entertain a success based bonus, which led to this transparency 388 00:17:59,720 --> 00:18:02,320 Speaker 1: issue that we were able to get to where we 389 00:18:02,320 --> 00:18:05,639 Speaker 1: would share the viewing day with the guild. And like 390 00:18:05,680 --> 00:18:09,040 Speaker 1: I said, that that issue that that resolved with the 391 00:18:09,080 --> 00:18:12,440 Speaker 1: writers was not only accepted in the deal, but ratified 392 00:18:12,440 --> 00:18:14,600 Speaker 1: by a ninety nine percent vote of the Writer's Guild. 393 00:18:15,000 --> 00:18:16,800 Speaker 1: So I know that all these guilds are not created 394 00:18:16,800 --> 00:18:19,040 Speaker 1: equal and they all have different needs and more bespoke needs, 395 00:18:19,119 --> 00:18:21,280 Speaker 1: but like I said, that is one that worked that 396 00:18:21,880 --> 00:18:26,520 Speaker 1: rewarded success, which we agreed with. But a levee on 397 00:18:26,600 --> 00:18:28,879 Speaker 1: top of our revenue or a per subscriber with no 398 00:18:30,760 --> 00:18:33,399 Speaker 1: insight into the revenue per subscriber or anything. It just 399 00:18:33,440 --> 00:18:36,280 Speaker 1: felt like a very like a bridge too far to 400 00:18:36,280 --> 00:18:38,600 Speaker 1: add this deep into the negotiation right now. 401 00:18:38,600 --> 00:18:41,600 Speaker 2: I'm curious. There are a couple of people yesterday who 402 00:18:41,600 --> 00:18:43,000 Speaker 2: are telling me I should say, by the way. 403 00:18:44,119 --> 00:18:46,439 Speaker 1: This has been a very difficult time obviously doing this, 404 00:18:46,520 --> 00:18:49,280 Speaker 1: and the goal here is to get people back to work. 405 00:18:49,680 --> 00:18:51,560 Speaker 1: The goal is to get the town opened up. This 406 00:18:51,640 --> 00:18:54,600 Speaker 1: is not just hurting our industry, it's hurting every other 407 00:18:54,640 --> 00:18:58,320 Speaker 1: business that supports our industry, and not just not just 408 00:18:58,359 --> 00:19:00,760 Speaker 1: in California. But you know, it's been very, very extremely 409 00:19:00,760 --> 00:19:04,600 Speaker 1: painful in California. We're really so we're desperately trying to 410 00:19:04,600 --> 00:19:06,080 Speaker 1: get folks back to work, and we've been at the 411 00:19:06,080 --> 00:19:08,760 Speaker 1: table to do this. We pulled the group of CEOs 412 00:19:08,800 --> 00:19:11,040 Speaker 1: together to sit at that table. All the CEOs of 413 00:19:11,080 --> 00:19:14,199 Speaker 1: the MPTP have been involved in this every day. The 414 00:19:14,240 --> 00:19:16,679 Speaker 1: four of us have been at the table, but everyone 415 00:19:16,720 --> 00:19:19,760 Speaker 1: has been deeply engaged in this every day, treating it 416 00:19:19,800 --> 00:19:21,520 Speaker 1: as with the same urgency that we did trying to 417 00:19:21,520 --> 00:19:22,840 Speaker 1: get production open during COVID. 418 00:19:23,600 --> 00:19:25,280 Speaker 3: We understand there has to a deal has got to 419 00:19:25,280 --> 00:19:25,640 Speaker 3: get made. 420 00:19:25,680 --> 00:19:27,639 Speaker 1: And the one thing about it why these deals can 421 00:19:27,640 --> 00:19:29,600 Speaker 1: take a long time sometimes is this is the one 422 00:19:29,640 --> 00:19:32,160 Speaker 1: deal we will make. This is the deal that Sagnoes 423 00:19:32,200 --> 00:19:33,359 Speaker 1: are going to make with us, and this is the 424 00:19:33,359 --> 00:19:34,960 Speaker 1: deal we know we're going to make with them. It's 425 00:19:35,000 --> 00:19:37,800 Speaker 1: just a matter of how we get there. And as 426 00:19:37,840 --> 00:19:40,879 Speaker 1: long as we can have steady, progressive talks, it makes sense. 427 00:19:41,200 --> 00:19:44,040 Speaker 1: But what happened last night was not steady or progressive. 428 00:19:45,040 --> 00:19:47,879 Speaker 2: When you resolve this, what do you think is going 429 00:19:47,960 --> 00:19:49,680 Speaker 2: to be the impact on the business. 430 00:19:51,680 --> 00:19:56,040 Speaker 1: But you remember, the prices escalate, the cost of content escalates, 431 00:19:56,080 --> 00:19:59,199 Speaker 1: you know, on a per performer or per title basis, 432 00:19:59,200 --> 00:20:01,040 Speaker 1: all the time. So this is get to work into 433 00:20:01,040 --> 00:20:02,639 Speaker 1: the economics of that, and some of that is all 434 00:20:02,760 --> 00:20:05,200 Speaker 1: is forecast to happen every time you have a new contract. 435 00:20:05,240 --> 00:20:08,120 Speaker 1: So I don't know what will happen, because I think 436 00:20:08,119 --> 00:20:11,119 Speaker 1: it will happen company by company. It's we are not 437 00:20:11,320 --> 00:20:14,320 Speaker 1: changing our you know, spend forecasts or any of those things. 438 00:20:14,320 --> 00:20:18,600 Speaker 1: So we're we think that it will change incrementally the 439 00:20:18,640 --> 00:20:20,040 Speaker 1: cost of content over time. For sure. 440 00:20:20,480 --> 00:20:22,720 Speaker 2: That is potentially where the price increase comes in. 441 00:20:22,960 --> 00:20:25,439 Speaker 1: Yeah, I mean it wouldn't be just because of that, 442 00:20:25,480 --> 00:20:28,280 Speaker 1: because obviously we've had you know, in non contract years, 443 00:20:28,280 --> 00:20:31,760 Speaker 1: we've had price increases too. So remember the reason why 444 00:20:31,760 --> 00:20:34,040 Speaker 1: this is particularly troubling on the ask on the on 445 00:20:34,080 --> 00:20:36,760 Speaker 1: the levee is that on top of all of the 446 00:20:36,840 --> 00:20:39,159 Speaker 1: deal and all the improvements in the deal, this is 447 00:20:39,200 --> 00:20:42,440 Speaker 1: also still a very competitive business. So you're paying top 448 00:20:42,480 --> 00:20:45,480 Speaker 1: of market clearing price for all the talent involved in 449 00:20:45,480 --> 00:20:48,640 Speaker 1: every show above and below the line, So that's all 450 00:20:48,680 --> 00:20:51,520 Speaker 1: still intact. So I I just think, like I said, 451 00:20:51,560 --> 00:20:54,000 Speaker 1: it's a it's a part of the economics of of 452 00:20:54,119 --> 00:20:56,840 Speaker 1: the town is that, you know, And I think it's 453 00:20:56,840 --> 00:20:58,680 Speaker 1: really important to pay people what they're worth. And I 454 00:20:58,760 --> 00:21:01,440 Speaker 1: think the performance bonus really adds a enhancement to that 455 00:21:02,000 --> 00:21:05,120 Speaker 1: because sometimes that success does drive a business, right. 456 00:21:07,000 --> 00:21:10,240 Speaker 2: I'm curious one of the things that are over the 457 00:21:10,280 --> 00:21:12,720 Speaker 2: last twelve eighteen months, you guys did two things that 458 00:21:12,760 --> 00:21:16,240 Speaker 2: you had long said you would not do, which was a. 459 00:21:16,320 --> 00:21:17,080 Speaker 1: Pure at Bloomberg. 460 00:21:19,520 --> 00:21:24,200 Speaker 2: The second one, I'm gonna go with advertising and crackdown 461 00:21:24,240 --> 00:21:27,120 Speaker 2: and passwords. They will do the easy one first, Yes, 462 00:21:27,240 --> 00:21:32,040 Speaker 2: password sharing. Anytime previously you guys have talked about this, 463 00:21:32,119 --> 00:21:35,360 Speaker 2: there's been online uproar. When you initially started raising prices, 464 00:21:35,359 --> 00:21:37,160 Speaker 2: you lost a bunch of customers. You seem to have 465 00:21:37,640 --> 00:21:42,920 Speaker 2: instituted this with minimal disruption. It's worked very well. How 466 00:21:42,960 --> 00:21:43,879 Speaker 2: the heck did that happen? 467 00:21:44,920 --> 00:21:47,560 Speaker 1: I think, I hope it's a testimony to how much 468 00:21:47,560 --> 00:21:50,200 Speaker 1: people love the product that they so, I think. 469 00:21:50,240 --> 00:21:50,520 Speaker 2: But the. 470 00:21:52,800 --> 00:21:55,880 Speaker 1: Path on the paid sharing, basically what we ran into 471 00:21:56,160 --> 00:22:00,280 Speaker 1: was in the US, we became nearly ubiquitous with users, 472 00:22:00,480 --> 00:22:02,840 Speaker 1: and about a third of them were not paying. They 473 00:22:02,840 --> 00:22:06,120 Speaker 1: were basically borrowing someone else's account. And so we went 474 00:22:06,160 --> 00:22:08,600 Speaker 1: back to them and said, hey, we think you are 475 00:22:08,640 --> 00:22:10,000 Speaker 1: seeing a lot of value for this. You want to 476 00:22:10,000 --> 00:22:12,440 Speaker 1: have your own account, and we gave them some options. 477 00:22:13,119 --> 00:22:14,879 Speaker 1: Advertising was a part of that, which gave them a 478 00:22:14,880 --> 00:22:18,439 Speaker 1: lower price point option, but also but also give them 479 00:22:18,480 --> 00:22:21,359 Speaker 1: just different options to spin off an account for a 480 00:22:21,400 --> 00:22:24,000 Speaker 1: relative or to get your own account, and a lot 481 00:22:24,040 --> 00:22:26,800 Speaker 1: of folks have chose chose one or one or the other. Uh, 482 00:22:26,840 --> 00:22:28,679 Speaker 1: And it says and we continue to grow in the 483 00:22:28,680 --> 00:22:32,159 Speaker 1: market where we otherwise were pretty pretty much fully penetrated. 484 00:22:32,480 --> 00:22:34,840 Speaker 1: So it gave us a much bigger addressable market in 485 00:22:34,840 --> 00:22:37,359 Speaker 1: the US and around the world to go after. 486 00:22:37,480 --> 00:22:39,680 Speaker 2: So is that likely more of a short term bump 487 00:22:39,760 --> 00:22:41,760 Speaker 2: or do you think it benefits Well. 488 00:22:41,600 --> 00:22:43,159 Speaker 1: It's a it's a short term mom but it's a 489 00:22:43,200 --> 00:22:45,720 Speaker 1: long term moment that those economics apply to the long 490 00:22:45,800 --> 00:22:46,560 Speaker 1: term membership. 491 00:22:46,640 --> 00:22:47,840 Speaker 3: So that's that's why. 492 00:22:48,040 --> 00:22:50,040 Speaker 1: But I think in that way it was a helpful 493 00:22:50,040 --> 00:22:51,359 Speaker 1: thing for us, And like I said, I think it 494 00:22:51,400 --> 00:22:54,720 Speaker 1: really was. I think a testimony to the relationship the 495 00:22:54,720 --> 00:22:57,600 Speaker 1: consumers have with Netflix and the programming on Netflix that 496 00:22:57,880 --> 00:23:00,560 Speaker 1: they didn't when they'd answer that poll pretty much the 497 00:23:00,560 --> 00:23:01,160 Speaker 1: same as you did. 498 00:23:01,359 --> 00:23:03,399 Speaker 2: Yes, although I'm curious and I do want to get 499 00:23:03,400 --> 00:23:06,320 Speaker 2: the advertising. But a common criticism of Netflix that you 500 00:23:06,359 --> 00:23:09,600 Speaker 2: hear in the industry in La New York, the people 501 00:23:09,640 --> 00:23:12,040 Speaker 2: feel like the programming on it has gotten worse. 502 00:23:13,760 --> 00:23:15,720 Speaker 1: I think it's just there's more of it and it's 503 00:23:15,720 --> 00:23:19,320 Speaker 1: not all for you. So that's that's the truth. So 504 00:23:19,400 --> 00:23:21,639 Speaker 1: I think when I look at that and say, you know, 505 00:23:21,840 --> 00:23:25,320 Speaker 1: in ten years we've been doing this, you know, one 506 00:23:25,400 --> 00:23:29,120 Speaker 1: hundred and eighty eight Emmy Awards, almost a thousand nominations, 507 00:23:30,960 --> 00:23:35,159 Speaker 1: one hundred and twenty two I believe Oscar nominations, and 508 00:23:35,200 --> 00:23:38,879 Speaker 1: twenty two wins and including eight Best Picture nominees to 509 00:23:39,040 --> 00:23:41,680 Speaker 1: last year. And I look at that and I think, 510 00:23:41,760 --> 00:23:43,800 Speaker 1: like what people I think what people do see is 511 00:23:43,840 --> 00:23:46,359 Speaker 1: that we've expanded the offering, you know. So yes, we 512 00:23:46,480 --> 00:23:49,600 Speaker 1: have Beef and Diplomat and Crown and all these. We 513 00:23:49,600 --> 00:23:53,080 Speaker 1: also have great like action shows like Night Agent, which 514 00:23:53,080 --> 00:23:55,800 Speaker 1: you see this emergence of Gay bass I as a 515 00:23:55,800 --> 00:23:58,600 Speaker 1: break a brand new action star, or a kind of 516 00:23:58,600 --> 00:24:02,000 Speaker 1: a relentless action movie like Extraction and Extraction to or 517 00:24:02,600 --> 00:24:05,919 Speaker 1: Mother for you know, Jenner j Lo and this. You know, 518 00:24:05,920 --> 00:24:07,880 Speaker 1: they would say that when we first started, we only 519 00:24:07,880 --> 00:24:09,880 Speaker 1: did a handful of shows, so people think, oh, they 520 00:24:10,080 --> 00:24:13,120 Speaker 1: always made these real prestige shows like AMC and that's 521 00:24:13,160 --> 00:24:15,120 Speaker 1: all they did, And I said, yeah, that wasn't true 522 00:24:15,160 --> 00:24:17,480 Speaker 1: then either. We also had a show called Hemlock Grove 523 00:24:17,560 --> 00:24:20,520 Speaker 1: that people forgot about pretty quick, and those are in 524 00:24:20,560 --> 00:24:22,160 Speaker 1: the earliest days of what we were doing. 525 00:24:22,960 --> 00:24:24,440 Speaker 3: So I feel like we always were. 526 00:24:24,320 --> 00:24:26,720 Speaker 1: Trying to get to the variety in Breath, and today 527 00:24:26,760 --> 00:24:29,120 Speaker 1: we have incredible variety in Breath. And if you love 528 00:24:29,400 --> 00:24:32,120 Speaker 1: Love is Blind, you would not say that Netflix programming 529 00:24:32,160 --> 00:24:35,080 Speaker 1: got worse because you love Love is Blind and it's 530 00:24:35,119 --> 00:24:37,200 Speaker 1: a good show. If you love these reality dating shows, 531 00:24:37,240 --> 00:24:38,880 Speaker 1: is as good as it gets. And we weren't even 532 00:24:38,920 --> 00:24:41,800 Speaker 1: doing reality programming three four years ago. Yeah, so I 533 00:24:41,800 --> 00:24:44,160 Speaker 1: feel like a lot of people like pick their personal 534 00:24:44,200 --> 00:24:46,879 Speaker 1: taste and say when if I see other things that 535 00:24:46,920 --> 00:24:48,320 Speaker 1: I'm not watching, I think that's something. 536 00:24:48,400 --> 00:24:51,800 Speaker 3: You know, the service has changed. It hasn't changed, it's grown, right. 537 00:24:51,880 --> 00:24:52,880 Speaker 1: Yeah. 538 00:24:53,400 --> 00:24:55,880 Speaker 2: One of the other criticisms you get is that when 539 00:24:55,920 --> 00:24:58,920 Speaker 2: the show, and I know you've already talked about why 540 00:24:58,920 --> 00:25:01,080 Speaker 2: this is you think it's with social and all that, 541 00:25:01,160 --> 00:25:03,719 Speaker 2: but is that when shows come out, they don't land 542 00:25:03,880 --> 00:25:05,439 Speaker 2: and one of the things or they don't create the 543 00:25:05,440 --> 00:25:08,520 Speaker 2: same cultural impact. And one of the things that you 544 00:25:08,560 --> 00:25:11,240 Speaker 2: guys have been doing, I think to push against this 545 00:25:11,320 --> 00:25:15,560 Speaker 2: a little bit is you've started to create toys and 546 00:25:15,560 --> 00:25:18,080 Speaker 2: live experiences. You've got the Bridgerton Ball and you've got 547 00:25:18,119 --> 00:25:22,880 Speaker 2: the Stranger Things Store and all these different things. What 548 00:25:23,000 --> 00:25:25,880 Speaker 2: is next for you in this area of building sort 549 00:25:25,920 --> 00:25:29,200 Speaker 2: of moments and marketing campaigns around your projects. 550 00:25:29,440 --> 00:25:33,080 Speaker 1: Yeah. So, yeah, we have a consumer products group. Like 551 00:25:33,119 --> 00:25:36,080 Speaker 1: other consumer products groups, it's really not we don't focus 552 00:25:36,080 --> 00:25:38,600 Speaker 1: that much on kind of revenue and profit on that business. 553 00:25:38,640 --> 00:25:42,240 Speaker 1: It's a lot about building fandom. So it's a combinations 554 00:25:42,240 --> 00:25:46,640 Speaker 1: where kind of consumer product sales and marketing and publicity 555 00:25:46,680 --> 00:25:49,960 Speaker 1: all kind of come together and help facilitate incredible fandom, 556 00:25:50,400 --> 00:25:54,720 Speaker 1: so we do these experiences that are wildly, wildly popular. 557 00:25:55,440 --> 00:25:57,960 Speaker 1: The one that people first probably took notice of was 558 00:25:58,000 --> 00:26:00,679 Speaker 1: the Stranger Things drive through that we did during COVID 559 00:26:00,720 --> 00:26:04,399 Speaker 1: that and these are pretty decently priced tickets that people 560 00:26:04,480 --> 00:26:07,600 Speaker 1: really show up for and really have an incredibly immersive 561 00:26:07,640 --> 00:26:10,320 Speaker 1: experience with their favorite show. So it was in drive 562 00:26:10,359 --> 00:26:12,800 Speaker 1: through form with with Stranger Things. We have several other 563 00:26:12,840 --> 00:26:15,399 Speaker 1: Stranger Things experiences that's still that are traveled the world. 564 00:26:15,400 --> 00:26:20,600 Speaker 1: Now we have this Bridgerton Ball, which is a people 565 00:26:21,080 --> 00:26:25,000 Speaker 1: show up in costume and go to the Bridgerton Ball 566 00:26:25,040 --> 00:26:27,560 Speaker 1: and people love it so much they propose marriage in there. 567 00:26:27,600 --> 00:26:30,560 Speaker 1: There's dozens of people that have been better proposed marriage 568 00:26:30,560 --> 00:26:33,640 Speaker 1: in these events, and it's incredibly elaborate when people show 569 00:26:33,680 --> 00:26:35,800 Speaker 1: up and like, where did you have that costume? I 570 00:26:35,840 --> 00:26:37,359 Speaker 1: just had it laying around the house to go to 571 00:26:37,359 --> 00:26:40,040 Speaker 1: the Bridgerton Ball and this I can go back one 572 00:26:40,080 --> 00:26:42,919 Speaker 1: and if you don't mind, yeah we preempted. Oh I 573 00:26:42,920 --> 00:26:45,119 Speaker 1: went the wrong way. Okay. So this is where the 574 00:26:45,160 --> 00:26:48,280 Speaker 1: next generation of this that all these traveling experiences that 575 00:26:48,280 --> 00:26:50,840 Speaker 1: we've been doing, we're going to pull them together and 576 00:26:51,800 --> 00:26:55,320 Speaker 1: start to build out these more permanent experiences. This is 577 00:26:55,359 --> 00:26:58,480 Speaker 1: a concept of one something we're calling Netflix House that 578 00:26:58,520 --> 00:27:01,000 Speaker 1: will be full of these kind of permanent and traveling 579 00:27:01,080 --> 00:27:06,080 Speaker 1: experiences and consumer experiences will be food experiences that are 580 00:27:06,119 --> 00:27:08,359 Speaker 1: basically taking what we've learned from all of these and 581 00:27:08,400 --> 00:27:11,720 Speaker 1: putting them under one roof in several major cities around 582 00:27:11,720 --> 00:27:14,760 Speaker 1: the world. And here's the Bridgeton ball. All those people 583 00:27:14,760 --> 00:27:18,680 Speaker 1: in costumes, that's their own costumes. That's the escape room 584 00:27:18,680 --> 00:27:20,800 Speaker 1: for the Costa di Papel where people came, they got 585 00:27:20,840 --> 00:27:23,840 Speaker 1: in costume, they did their thing. This is for for 586 00:27:23,920 --> 00:27:28,119 Speaker 1: one piece event. This is Netflix Bites, which is a 587 00:27:28,240 --> 00:27:31,919 Speaker 1: restaurant experience we did here in La that it was 588 00:27:31,920 --> 00:27:34,920 Speaker 1: sold out the entire run of the show of the restaurant. 589 00:27:35,240 --> 00:27:39,920 Speaker 1: And there's the new Netflix Stranger Things experience. And this 590 00:27:40,000 --> 00:27:42,760 Speaker 1: is the to Doomfest where this all came together as 591 00:27:42,800 --> 00:27:45,160 Speaker 1: a big live event we did in Brazil a few 592 00:27:45,160 --> 00:27:48,159 Speaker 1: months ago where twenty five thousand people came out just 593 00:27:48,240 --> 00:27:50,520 Speaker 1: to meet all the stars of the new Netflix shows. 594 00:27:50,600 --> 00:27:52,080 Speaker 1: So this is what that looked like. 595 00:27:52,400 --> 00:27:55,359 Speaker 2: What's the timetable on when the first Netflix House is 596 00:27:55,359 --> 00:27:55,800 Speaker 2: going to open. 597 00:27:56,240 --> 00:27:59,320 Speaker 1: We're in the works of it now, so not no 598 00:27:59,359 --> 00:28:00,800 Speaker 1: timeing to an noun chef. We're trying to get an 599 00:28:00,800 --> 00:28:01,360 Speaker 1: open next year. 600 00:28:02,320 --> 00:28:04,159 Speaker 2: Do you have a preference where the first one opens? 601 00:28:04,320 --> 00:28:06,320 Speaker 1: No, And we were just looking at major cities around 602 00:28:06,320 --> 00:28:08,880 Speaker 1: the world or some smaller markets too, where this could 603 00:28:08,880 --> 00:28:10,959 Speaker 1: be where you can really build up the fandom there 604 00:28:10,960 --> 00:28:13,360 Speaker 1: where it's a little more novel to get an experience 605 00:28:13,400 --> 00:28:15,440 Speaker 1: like this in your town. Yeah. Yeah, and we think 606 00:28:15,440 --> 00:28:17,560 Speaker 1: it's one of these. It's not like, don't think of 607 00:28:17,600 --> 00:28:20,400 Speaker 1: it like Disneyland. Think of it as closer to CityWalk, 608 00:28:20,480 --> 00:28:22,960 Speaker 1: something you might go to several times a month, not 609 00:28:23,119 --> 00:28:24,120 Speaker 1: just once every couple of years. 610 00:28:24,160 --> 00:28:25,280 Speaker 2: Are you going to have a movie theater? 611 00:28:25,680 --> 00:28:28,520 Speaker 3: Some will, some will really yeah. 612 00:28:28,080 --> 00:28:30,920 Speaker 2: Showing Netflix movies. Yeah, this is my chance to ask 613 00:28:30,960 --> 00:28:31,680 Speaker 2: your favorite question. 614 00:28:34,840 --> 00:28:36,560 Speaker 1: We're lucky we live in La right, you can go 615 00:28:36,640 --> 00:28:38,160 Speaker 1: to pretty soon you'll be able to go to the 616 00:28:38,280 --> 00:28:42,880 Speaker 1: historic Egyptian theater that we've just beautifully restored to reopen. 617 00:28:43,400 --> 00:28:45,400 Speaker 2: But I have to ask because Apple's about to put 618 00:28:45,400 --> 00:28:48,000 Speaker 2: am Martin, a Scarsese movie, on screens for forty five 619 00:28:48,080 --> 00:28:51,920 Speaker 2: days before it's streaming. You did Scorsese's last movie. You 620 00:28:52,680 --> 00:28:56,000 Speaker 2: negotiated possibly putting it on movie screens, and it didn't 621 00:28:56,000 --> 00:28:58,400 Speaker 2: work out. Do you think as you see Apple and 622 00:28:58,440 --> 00:29:01,000 Speaker 2: Amazon move in on theaters a little more, will that 623 00:29:01,160 --> 00:29:04,600 Speaker 2: competition changer strategy at all? Because if you want to 624 00:29:04,640 --> 00:29:07,080 Speaker 2: work with certain filmmakers, they are going to demand it. 625 00:29:07,120 --> 00:29:10,320 Speaker 1: Look I do. I mean I try not to be 626 00:29:10,320 --> 00:29:13,400 Speaker 1: cynical about the question because a few if people keep 627 00:29:13,440 --> 00:29:15,520 Speaker 1: asking me why don't you do things like everyone else does? 628 00:29:16,080 --> 00:29:18,000 Speaker 1: And then I look at the financial results and I say, 629 00:29:18,080 --> 00:29:20,640 Speaker 1: maybe this isn't what people want in a way, because 630 00:29:20,640 --> 00:29:24,080 Speaker 1: then I've not been able to see, honestly a direct 631 00:29:24,080 --> 00:29:26,720 Speaker 1: correlation between the theatrical run and the demand in the 632 00:29:26,720 --> 00:29:29,480 Speaker 1: second window. What I have seen is that that theatrical 633 00:29:29,560 --> 00:29:33,120 Speaker 1: run sometimes takes the most passionate fan out of the market, 634 00:29:33,920 --> 00:29:36,000 Speaker 1: and the films don't tend to be any bigger because 635 00:29:36,000 --> 00:29:37,479 Speaker 1: they were big in the box office, or because they 636 00:29:37,480 --> 00:29:39,480 Speaker 1: were in the box office already. You create it just 637 00:29:39,760 --> 00:29:43,120 Speaker 1: a different window of demand generation, and we meet that 638 00:29:43,160 --> 00:29:46,080 Speaker 1: demand that we generate on Netflix, and that's. 639 00:29:45,920 --> 00:29:48,640 Speaker 3: Our core business. So we do put movies in theaters. 640 00:29:48,680 --> 00:29:51,480 Speaker 1: I mean, Irishman was on nine hundred screens and I 641 00:29:51,520 --> 00:29:55,320 Speaker 1: think I think Flower Moon's on like three thousand. So 642 00:29:55,360 --> 00:29:56,880 Speaker 1: when they look at it, look at it and say, 643 00:29:56,880 --> 00:30:00,840 Speaker 1: look and ten Oscar nominations for the Eye Wishmen, very 644 00:30:00,840 --> 00:30:02,800 Speaker 1: successful on Netflix, is one of our top movies of 645 00:30:02,840 --> 00:30:05,040 Speaker 1: all time. So and I look at that and think 646 00:30:05,040 --> 00:30:07,000 Speaker 1: there was and I don't see any discernible difference. We 647 00:30:07,040 --> 00:30:09,240 Speaker 1: have a lot of pay one movies, you know, that 648 00:30:09,320 --> 00:30:12,160 Speaker 1: come on in the second window after the theater, and 649 00:30:12,200 --> 00:30:15,280 Speaker 1: they don't necessarily perform bigger than our biggest original films do. 650 00:30:15,720 --> 00:30:17,840 Speaker 1: So when I look at that and think that the 651 00:30:17,840 --> 00:30:20,080 Speaker 1: theory that you have to put movies in the theaters 652 00:30:20,080 --> 00:30:22,920 Speaker 1: to get you know, for some long stretch of time 653 00:30:22,960 --> 00:30:25,440 Speaker 1: before you give it to your subscribers who paid to 654 00:30:25,480 --> 00:30:28,000 Speaker 1: make the movie right with their subscription fee, I don't 655 00:30:28,000 --> 00:30:30,400 Speaker 1: think the real payoff is in the favor of the consumer. Right. 656 00:30:30,480 --> 00:30:33,320 Speaker 1: So that's why we really begin consumer driven. If you 657 00:30:33,320 --> 00:30:34,960 Speaker 1: want to see this movie, you love it, and you 658 00:30:35,000 --> 00:30:37,120 Speaker 1: don't live in a major city, you have access to 659 00:30:37,120 --> 00:30:39,920 Speaker 1: see it on opening day. That's really novel and it 660 00:30:40,080 --> 00:30:42,920 Speaker 1: kind of opens up that distribution footprint, you know, around 661 00:30:42,960 --> 00:30:43,480 Speaker 1: the globe. 662 00:30:43,880 --> 00:30:46,720 Speaker 2: Okay, we'll talk about one thing that I would say 663 00:30:46,880 --> 00:30:47,120 Speaker 2: I was. 664 00:30:47,160 --> 00:30:51,120 Speaker 1: Joking, but you know, I understand the romance, the romantic 665 00:30:51,160 --> 00:30:54,400 Speaker 1: connection people have with the movie theater, and we kind 666 00:30:54,400 --> 00:30:56,440 Speaker 1: of not only acknowledge it, but we support it. 667 00:30:56,720 --> 00:30:59,600 Speaker 3: In the Paris Theater in New York that we saved 668 00:30:59,840 --> 00:31:00,600 Speaker 3: was the last. 669 00:31:00,400 --> 00:31:03,800 Speaker 1: Single screen theater in Manhattan Theaters around seventy five years old. 670 00:31:04,080 --> 00:31:07,520 Speaker 1: We just put in a brand new, incredible atmost sound system, 671 00:31:08,080 --> 00:31:10,840 Speaker 1: So we use it to premiere our films, to screen 672 00:31:10,840 --> 00:31:12,600 Speaker 1: our films, but we also do use it as a 673 00:31:12,600 --> 00:31:15,800 Speaker 1: revival house that's just been showing sold out, you know, 674 00:31:15,840 --> 00:31:18,560 Speaker 1: the sold out audiences, all these kind of great movies 675 00:31:18,600 --> 00:31:20,160 Speaker 1: that have never been seen in that most before. 676 00:31:20,600 --> 00:31:23,080 Speaker 2: I will say to your point about the demand for 677 00:31:23,440 --> 00:31:26,280 Speaker 2: movies that show in theaters first, it does feel like 678 00:31:26,320 --> 00:31:28,120 Speaker 2: a lot of the most stream movies are those that 679 00:31:28,160 --> 00:31:31,680 Speaker 2: are in theaters first. But I'm not going to debate 680 00:31:31,720 --> 00:31:32,560 Speaker 2: this with you right now. 681 00:31:32,400 --> 00:31:35,240 Speaker 1: Not on Netflix right well, and the biggest platform you 682 00:31:35,240 --> 00:31:37,840 Speaker 1: were talking about on other services that don't have meaningful 683 00:31:37,920 --> 00:31:39,160 Speaker 1: day and date movies, right. 684 00:31:39,240 --> 00:31:39,480 Speaker 3: Yeah. 685 00:31:41,840 --> 00:31:44,680 Speaker 2: One thing that you do do that also everyone else 686 00:31:44,720 --> 00:31:46,960 Speaker 2: does is advertising, which I meant to ask you about her. Yes, 687 00:31:47,960 --> 00:31:50,640 Speaker 2: your head of advertising just left after like a year 688 00:31:50,680 --> 00:31:52,880 Speaker 2: at the company, very new in this that's usually not 689 00:31:52,960 --> 00:31:59,040 Speaker 2: a great sign. There seems to be mixed. Look that 690 00:31:59,400 --> 00:32:02,400 Speaker 2: wall Stream is very positive on your advertising business when 691 00:32:02,440 --> 00:32:04,480 Speaker 2: you gave an upfront and you had some numbers and 692 00:32:04,520 --> 00:32:07,959 Speaker 2: they thought that was good. There's also been some reporting 693 00:32:08,000 --> 00:32:10,400 Speaker 2: that suggests that you're way below what you had wanted. 694 00:32:10,400 --> 00:32:12,040 Speaker 2: So where where are you without. 695 00:32:12,560 --> 00:32:15,360 Speaker 1: They should be excited about it. We are. We're a 696 00:32:15,440 --> 00:32:18,200 Speaker 1: year into it. Jeremy Brotheray did a great job getting 697 00:32:18,240 --> 00:32:20,840 Speaker 1: us to where we're at today. What we have to do, 698 00:32:20,880 --> 00:32:22,920 Speaker 1: by the way, not just us, all all these all 699 00:32:22,920 --> 00:32:26,680 Speaker 1: the platforms that have added an ad option, they've all 700 00:32:26,680 --> 00:32:27,800 Speaker 1: got to do the same thing, which they have to 701 00:32:27,880 --> 00:32:30,800 Speaker 1: kind of get that that tier at scale and to 702 00:32:30,800 --> 00:32:34,400 Speaker 1: grow that scale with with with fans and viewers. So 703 00:32:34,720 --> 00:32:37,040 Speaker 1: the building the ad team and building the infrastructure and 704 00:32:37,040 --> 00:32:39,200 Speaker 1: all those things with Jeremy did which was great for us. 705 00:32:39,240 --> 00:32:41,760 Speaker 1: Doing that we have definitely appreciated. We're super excited about 706 00:32:41,760 --> 00:32:44,600 Speaker 1: Amy Reinhardt coming in. She's a veteran at Netflix who 707 00:32:44,680 --> 00:32:47,600 Speaker 1: understands all the complexities of you know, growing new businesses 708 00:32:47,600 --> 00:32:50,440 Speaker 1: at Netflix. So it's a you should look at it 709 00:32:50,480 --> 00:32:54,560 Speaker 1: as a doubling down, not a failing and moving on 710 00:32:55,400 --> 00:32:57,640 Speaker 1: and it's new. We're definitely in our infancy and it's 711 00:32:57,680 --> 00:32:59,280 Speaker 1: definitely not at the scale that we wanted to be 712 00:32:59,320 --> 00:33:02,000 Speaker 1: at yet, and consumers have to choose between it. 713 00:33:02,040 --> 00:33:04,160 Speaker 3: And I'd say when you said we would never. 714 00:33:04,040 --> 00:33:06,880 Speaker 1: Do advertising, when we first started the business, we were 715 00:33:06,920 --> 00:33:09,360 Speaker 1: classically counter positions against advertising. 716 00:33:09,720 --> 00:33:11,720 Speaker 3: So for us to say we would never do it 717 00:33:11,760 --> 00:33:12,600 Speaker 3: was part of that thing. 718 00:33:12,720 --> 00:33:15,200 Speaker 1: To say. If you go back to our old DVD business, 719 00:33:15,480 --> 00:33:18,720 Speaker 1: our counter position was no late fees. Audiences hated, you know, 720 00:33:19,240 --> 00:33:22,040 Speaker 1: fans hated paying late fees. So that was our big thing, 721 00:33:22,080 --> 00:33:25,240 Speaker 1: no movie watching with no late fees. And when we 722 00:33:25,320 --> 00:33:26,560 Speaker 1: started getting to streaming, we. 723 00:33:26,520 --> 00:33:28,760 Speaker 3: Saw this is streaming will be the new television. 724 00:33:29,200 --> 00:33:32,360 Speaker 1: And what do people not like about TV? Waiting and ads? 725 00:33:32,840 --> 00:33:34,920 Speaker 1: So we're sitting through the ads or waiting until next week. 726 00:33:35,120 --> 00:33:38,520 Speaker 1: So our classic counterposition was watch it all at once 727 00:33:38,600 --> 00:33:41,720 Speaker 1: and no ads. Now what happened is is we got 728 00:33:41,720 --> 00:33:44,240 Speaker 1: bigger and bigger and more deeply penetrated into the world, 729 00:33:44,240 --> 00:33:46,720 Speaker 1: and also just smarter about it. We said, hey, we're 730 00:33:46,760 --> 00:33:49,160 Speaker 1: not we don't have an option for people who don't 731 00:33:49,200 --> 00:33:52,000 Speaker 1: care about advertising, and we'll want a lower price. 732 00:33:52,360 --> 00:33:54,520 Speaker 3: And I'd say it's a generational thing for sure. 733 00:33:55,080 --> 00:33:57,600 Speaker 1: You saw YouTube and us on that chart a lot 734 00:33:57,600 --> 00:33:59,040 Speaker 1: of those folks have been watching a lot of stuff 735 00:33:59,040 --> 00:34:01,280 Speaker 1: on YouTube with ads for all a long time, and 736 00:34:01,360 --> 00:34:03,800 Speaker 1: people like my son, you know who basically now that 737 00:34:03,840 --> 00:34:04,560 Speaker 1: he pays his own. 738 00:34:04,440 --> 00:34:07,000 Speaker 3: Bills, he's like, yeah, I'll take cat price, watch ads. 739 00:34:07,040 --> 00:34:09,960 Speaker 1: I watch adds on YouTube all the time, so it's 740 00:34:09,960 --> 00:34:12,640 Speaker 1: for him. So we we were touting that we were 741 00:34:12,640 --> 00:34:14,799 Speaker 1: all about choice and then not giving a choice to 742 00:34:14,800 --> 00:34:17,480 Speaker 1: those folks who wanted a lower price and didn't mind advertising. 743 00:34:18,200 --> 00:34:19,400 Speaker 1: Now now we have to do the other thing. We 744 00:34:19,440 --> 00:34:21,200 Speaker 1: have to be able to be We have to deliver 745 00:34:21,280 --> 00:34:24,040 Speaker 1: for advertisers, and we have to deliver for the audience 746 00:34:24,280 --> 00:34:27,200 Speaker 1: a product that's innovative and doesn't you know, you know, 747 00:34:27,320 --> 00:34:29,840 Speaker 1: interrupt their viewing experience in a way that makes the 748 00:34:29,920 --> 00:34:30,879 Speaker 1: viewing experience worse. 749 00:34:31,160 --> 00:34:32,719 Speaker 3: All those things we have to work on and get 750 00:34:32,719 --> 00:34:33,399 Speaker 3: better and better at. 751 00:34:33,400 --> 00:34:36,600 Speaker 1: And we're a year into it like that in games, 752 00:34:36,640 --> 00:34:38,799 Speaker 1: where these are also areas of the business that we're 753 00:34:38,840 --> 00:34:42,240 Speaker 1: looking to deepen the value for consumers and drive revenue, 754 00:34:42,480 --> 00:34:44,439 Speaker 1: and you know, we have to do both of those things. 755 00:34:44,440 --> 00:34:46,120 Speaker 1: We have to drive value first and then you can 756 00:34:46,200 --> 00:34:46,840 Speaker 1: drive revenue. 757 00:34:47,600 --> 00:34:49,480 Speaker 2: If we had more time, i'd ask you about games, 758 00:34:49,840 --> 00:34:51,440 Speaker 2: but we got to get to the CEO of YouTube. 759 00:34:51,480 --> 00:34:51,960 Speaker 2: Thank you so much. 760 00:34:52,320 --> 00:34:52,880 Speaker 1: Awesome, thank you