Ted talk: State of the Netflix union discussion with chief content officer Ted Sarandos
Over the last few years, Netflix has arguably done more to change the way we watch, talk, and think about television than anyone since HBO in the turn of the century days of "The Sopranos," "Sex and the City," and "Six Feet Under." Between their library of titles licensed from more traditional TV operations and their ever-growing stable of original series, Netflix has conditioned viewers to binge-watch shows, has encouraged its creators to design shows made explicitly for that model, and has pushed television in general into a more serialized direction, since the most lucrative afterlife for many shows lies in being sold to a streaming service rather than into traditional rerun syndication. During an appearance at the TCA press tour earlier this month, Netflix's chief content officer Ted Sarandos said that the service would be offering over 600 hours of original content this year, and spending over $6 billion to produce those shows and develop more. You can debate which streaming operation has the best catalog of pre-existing shows (Hulu, perhaps?), or which has the best original shows (Amazon's "Transparent" is my favorite of any streaming series, but Netflix's roster is much deeper), but Netflix is the 800-lb gorilla in this arena at the moment.
More often than not, it seems like all the TV industry talk focuses on Netflix's ratings — or, rather, the fact that almost no one (including the people who actually make shows for Netflix) knows what they are, even though Sarandos and other executives boast frequently about them in maddeningly vague terms. (As someone focusing on content rather than the business side of things, I don't care if I ever hear how many people are watching "Master of None," so long as I get to keep watching it. But it's obnoxious for Netflix to play the "We won't tell you what our numbers are, but trust us: they're awesome!" card.) At that TCA executive session, Sarandos spent a lot of time declining, like usual, to offer viewership totals, while dismissing NBC's claims that they had figured out a way to measure the audience for Netflix's originals. Everyone runs in the same circles over and over, never getting anywhere.
So when I sat down with Sarandos a few hours after that TCA session, my goal was to talk more broadly about his programming philosophy: the kinds of shows he tries to acquire, both as originals and as catalog titles, what Netflix's internal analytics show about how viewers watch their shows and what other kinds of shows they might want to see, and a lot more, including why he would refuse Matthew Weiner's request to do a Netflix show that would be released weekly instead of all at once.
But it turned out by the end that even Sarandos has his own issues with the way TV ratings are measured and reported.
You’ve said you have no plans to slow down your output. Is the ultimate goal to make Netflix so expansive that people feel no need to have any other source of their TV content?
Ted Sarandos: Not no other source, but I think we have to have shows that are incredibly meaningful to a lot of different people and a lot of different tastes. So if you have one or two shows that really matter to you more than anything, that might drive your whole subscription value. Or if most of the shows you watch are on Netflix, that drives your subscription value. So it’s all a matter of just making sure we’re maintaining the value for consumers for Netflix. So I think a bunch of stuff that everyone else has won’t get us there. Having unique programming will for sure.
At what point do you want the original content to far outweigh the library content?
Ted Sarandos: There’s no roadmap to say we have to cross over at some point or we’re dead. But I think right now, as long as we can keep releasing it at the pace that we have, at the quality we have, I’m happy to shift those dollars from off net to original in a really aggressive way.
There have been stories lately about the CW and other networks and studios suggesting they no longer want to license their shows to Netflix. Hypothetically, if all of your library contracts were coming up and everyone said, "We don’t want to renew with you,” would you be viable with just the original content at this point?
Ted Sarandos: Well, we’re expanding original. The way I’m expanding the programming today is original, global, exclusive. So if it’s a show that we don’t produce and we can license globally, that’s great. If it’s not a global license, it’s a little less attractive. And if it’s non-exclusive, it’s not even interesting anymore. And I think that there’s a lot of a very loose kind of exclusivity, when the whole show is stacked on all the TV Everywhere products, or on Hulu, or any of that stuff. So when I say "exclusive," I mean that the full season stack is exclusively on Netflix and that’s what’s going to be the most attractive way to attract our licensing dollars. And more and more, what people are excited about Netflix are the originals. And I would never want to rush into things and take away the shows that people love. But the viewing is shifting as aggressively as the spending is towards our original shows.
You talk to a certain generation of viewer, and they think of “Breaking Bad” as a show they discovered on Netflix. They have no association between it and AMC.
Ted Sarandos: You see that over and over again. I’m sure more people watch "Portlandia" on Netflix than ever see it on IFC. And that’s not the intent. The intent is that it builds their show's brand, which it does help. And they inch up their audience a little bit every time on the network. But for most people that’s a Netflix experience, not an IFC or an AMC experience.
Getting back to what you said before about some people subscribing for one or two shows, what does your research show in terms of whether people are subscribing for the full service versus loving a few things and finding that enough value for the year?
Ted Sarandos: One of the things I pay attention to is what people watch in the first 24 hours after joining. And increasingly, it’s original shows. So we feel like our original shows have membership impact that’s measurable and picking up a license of an off net show is not.
One of the really interesting things about your original lineup, and something a lot of the media tends to struggle with, is the idea that there is no one concrete Netflix brand. How intentional was that?
Ted Sarandos: Deeply intentional. Our brand is personalization. That’s the key, so I can’t go too far off of that. What I really said at the beginning (was) we didn’t want any show to define Netflix. And we didn’t want Netflix to define any one of our shows. So it really is about what people’s tastes are and if you love "The Ranch" (a multi-cam family sitcom starring Ashton Kutcher, Danny Masterson, Sam Elliott, and Debra Winger), you may not like "The Get Down" (a drama about the early days of hip-hop, from Baz Luhrmann and Shawn Ryan), and vice versa. They really are geared to different audiences, but it’s having the artistic license to make shows in all these different arenas that’s really amazing. But I think if you really silo what you’re interested in, like "We only want shows for men 18 to 49," then you’re going to get a mixed bag of shows for men 18 to 49. You say, "No, I want the best shows from everyone in the world for everyone in the world." Then you’re going to more likely to stumble onto something great like a "Master of None."
Economically, does the number of episodes in a given season for a show matter? Are 13 more useful to you than 10? Than 8?
Ted Sarandos: More running time gives you more viewing, so it’s better a little bit on a cost per hour basis. It’s more production scale sometimes. But a lot of times, it’s not much cheaper to make fewer episodes.
What if a producer comes to you and says, “We feel we don’t necessarily have enough story to sustain 13. Can we do 10?”
Ted Sarandos: I agree, let the story dictate the running time and the episode count. None of the creators for us feel like they have to stretch out or cram. We really will expand and contract the episode counts to fit the story. There’s no programming grid, where the difference for four to seven minutes of a one hour show is enormous. Remember during the AMC/"Mad Men" dispute, they were fighting over two minutes of commercials. And I would look at it like, "Oh my god, give them two minutes."
Some of your “Arrested Development” episodes were well over 30 minutes. The first “Love” (Judd Apatow's new romantic comedy series) is close to 40 minutes. Do you feel like for comedy, there’s maybe a length which it’s not wise to go past? Or if the creator wants to do that, the creator wants to do that?
Ted Sarandos: I haven’t had a belief that there’s some magic in the running time. Shorter is funnier, maybe. But I don’t think that was true in "Love." I think that episode is fantastic. I think the "Arrested Development" episodes are fantastic. If you’re writing a joke a minute show, you probably don’t want to do that too long. But these shows are not that. I think they’re more thoughtful than that.
Do you encourage your creators to push more towards serialization given the way you release things?
Ted Sarandos: Yeah, for sure. I mean, if a show is naturally not serialized but great, we are still in love with it. We still want to make it. We don’t try to make them artificially serialized. But we are much more attracted to a well-crafted well serialized show.
But you’ve picked up “Longmire,” which is more episodic.
Ted Sarandos: Absolutely. And “Black Mirror” is going to be, as an anthology, completely standalone.
But the release and serialization kind of go hand in hand. I’m sure you heard that a few days after “Mad Men” ended, Matt Weiner said if he was ever to pitch a show for Netflix, he would plead with you to release it weekly.
Ted Sarandos: He would lose.
Why would he lose?
Ted Sarandos: Because there’s no reason to release it weekly. The move away from appointment television is enormous. So why are you going to drag people back to something they’re abandoning in huge numbers? Matt makes great television and most people watch "Mad Men" on Netflix, and they watched it in multiple episode sittings. So maybe there’s a cultural thing that happens around the last episode of "Mad Men," for sure. I can’t dispute that. But for the most part, most people watch those shows on demand and on DVRs and in multiple episode stacks.
Have you seen the research? Are there any shows, either originals or catalog titles, that people are spacing out more?
Ted Sarandos: How about this: "Friends" isn’t really serialized at all, but when we brought on "Friends," everyone who watches "Friends" watches it episode 1, season 1, straight through. No one watches their favorite episode out of order. They really watch it that way. "How I Met Your Mother" is lightly serialized, but people rigidly watch it in serialized order. And it’s just serialized enough that if you watch it that way you’ll enjoy the show differently than you probably did on television.
But do you find that people are only watching one show at a time?
Ted Sarandos: Definitely. That’s how people watch. So if you decide tomorrow you want to watch "Breaking Bad," you’re going to spend the next two months watching all of "Breaking Bad" before you move on to something else. Which is radically different than, you know, a show a night viewing the way people used to do. And also the idea that I used to have a Tuesday night show, a Wednesday night show.
I feel like that changes the way they get made too, because at a certain point, you have to start making it with the assumption that people are only watching your show and nothing else for a while.
Ted Sarandos: Yeah. It’s good, though, because that way you don’t have to worry about reminding people of every detail of every scene, because there’s a 100 percent chance they saw last week’s episode less than an hour ago.
And the interface makes it so easy, where even if I was of a mind to watch something else, often the next episode starts and that’s what I’m watching.
Ted Sarandos: Yeah and like "Portlandia" is a show that people like on Netflix. There’s nothing serialized about it and it’s always watched in full season bins, always.
A lot of these different shows are made for different people, but you’re putting out seasons of shows so frequently now — sometimes two in one week — that it seems hard to imagine even a Netflix-only viewer being able to keep up with it all. Is that a concern, or are you targeting so many different viewers that it doesn’t matter?
Ted Sarandos: The site automatically keeps track of that stuff for you. So if you’re in the middle of "Bloodline" and "Orange is the New Black" comes on, which is what happened this year, you can choose to put "Bloodline" on hold and get into "Orange," and then it’ll take you right back to where you left off on "Bloodline" and remind you to continue watching. And then the other way around you don’t have to worry that because it took you three weeks to finish "Bloodline," that Orange won’t still be there. So people change their habits pretty dramatically around the interface.
You cast a pretty wide net. Are there kinds of shows that you don’t have that you would like to have in the docket?
Ted Sarandos: I think that we’re still looking for a great adult contemporary sci-fi, which we’re on the perpetual hunt for. Beyond that, I think we’ve got a nice flow that kind of checks all the boxes that we’re trying to do.
“Sense8” is sort of that, and I thought that was a great swing from you guys. Who else would do a show like “Sense8,” with that expense and that ambition? But it took a while for you to announce that it was coming back. How do you decide what is the threshold for what comes back and what doesn’t?
Ted Sarandos: It’s relative to the investment. Is it drawing an audience? I say that because success means something different for every show. And is it getting positive reception from fans, from you guys, from the critical reception. Things that add positives to Netflix. Is the show positive to Netflix? Even if it has a small audience or even if it doesn’t win awards, is it positive to Netflix?
So using that one as an example, that can’t be a cheap show given all the different places that they film. And the initial reaction critically was not great. And then at a certain point it turned.
Ted Sarandos: It got better, yeah.
So at what point did you start thinking "Okay, we’re going to do this"?
Ted Sarandos: This is an interesting dynamic that unfolded the last couple of years for Netflix. I think that people who are in the business of reviewing television — this is like a new kind of television. And I think it was being reviewed in the same paradigm at the beginning, where, like you said, people came back around. They realized in its entirely it was a different show than it was if you watched two episodes. And I think that was true of "Bloodline," which I’ve always characterized the entire first season as the pilot. And I think that we have the luxury of time, because I’m not like under this weekly pressure. I’m not putting the creators under the weekly pressure of, "Hey, you’re down 20 percent week on week," or any of those things. That doesn’t happen. So we had great positive momentum either critically or commercially, and we have lots of time for people to figure that out. So a lot of times we put a gap between season 1 and season 2, it’s less about us trying to figure it out than we’re trying to figure out deals, you know.
Everything’s in the can before you release it. There’s no feedback loop like there can be on shows that are still in production as their episodes are airing traditionally. How do you get a sense of, not in terms of numbers, but qualitatively, what specific aspects of a show the audience is liking, to maybe encourage the showrunners to do more of that, less of this?
Ted Sarandos: We do some feedback loops from the viewers in terms of giving us some of that quantitative view feedback on "We like this, we don’t like that." But we even keep it pretty close to the vest from the showrunners, unless they want to see it. Because we’re really trying to encourage them to expand on their vision. Not try to serve a specific viewer. And what you find is that the range is really different. The same joke in one show may be the favorite and the least favorite joke of the episode. You just find yourself chasing your tail if you do too much of that. Really, it’s reminding us that it’s an art and we have to let the artist run. And we have to live with the result. So I would much rather do that and every once in a while it’s a single or double that we hope is a triple than put money into pilots and development that never sees the light of day because of some feedback loop that doesn’t really mean anything.
The executives at AMC, when they started moving into originals, they wanted shows that matched well with their movie libraries: “Broken Trail” could play after a day of Western movies. You, meanwhile, have the algorithm that says, “If you like this, you might like that.” How much are your acquisitions driven by this idea of, “We have these six catalog titles that do well and we can then drive people towards originals”?
Ted Sarandos: It’s almost the other way around. We’re more likely now to license (outside) content that fits our originals than the other way around. So if we have an original show (like) "Sense8" coming out, we want to make sure we have the Wachkowski movies in as many territories as we can, because people will be talking about their library.
Because I looked at something like “The Ranch,” and my assumption was that you wanted to try to drive people who are watching multi-cam sitcom library titles to watch “The Ranch.”
Ted Sarandos: For sure. But it works that way. The other thing that’s great, like the reason why "Master of None" hit the ground running so fast, is we had a huge audience of people who love Aziz Ansari specials on Netflix. So we had a built in audience already that became the jumping off point for the show’s broad success. We did with Bill Burr with his standup specials, going right to "F is For Family."
Which is really good.
Ted Sarandos: Thank you. And we did that with an Adam Sandler movie so it’s the addressable audience. They get to see it first because the algorithm drives it right to the top. And they love it and it starts a great positive feedback loop.
But going back to the beginning of all this, when you were picking up “House of Cards” and you were picking up “Orange,” were you seeing things in the catalog already that those would function next to, or did you just want to be in business with those people?
Ted Sarandos: We wanted to be in business with those people. And we had great success with “Weeds” (also from Jenji Kohan) before “Orange.” “House of Cards” was more analytic driven and quality of star driven.
What were the analytics telling you?
Ted Sarandos: Remember, prior to this, only "West Wing" had been successful in that kind of arena. And we were looking at the data to find out that there is such thing as a Kevin Spacey fan that literally watches any movie Kevin Spacey is in. You see that in the data with his very diverse movies, but people still watch them and rate them highly. And the only common thread is Kevin Spacey. You could mine the data that way to say, "I know Kevin Spacey’s a real draw." You can throw out the idea that Washington politics is too narrow a world because it’s not that it’s about Washington politics. You have to get to the deeper level and it’s really just about sex and revenge and greed and power and all those things. And they way over-trump the limitations of any particular workspace of a show. And really, what you find out is that if you had a show with all of these elements, it has a big audience. So the big bet is, can a show with all these elements be successfully executed? And with that creative team, it was a really safe bet.
This becomes almost a sports thing: stats versus scouts. In terms of acquisitions, whether originals or catalog titles, how much of it is driven by personal taste or gut instinct, and how much is driven by the analytics?
Ted Sarandos: It’s intuition that is checked by data. So it’s data-influenced intuition. Like, Adam Sandler was in a report that spits out and says, "Do a deal with Adam Sandler." It’s scouring these reports all the time and seeing the rhythms. I need people on my team who are smart enough to see the patterns in the data but also creative enough to do something with that.
So has there been a show that you picked up despite the data suggesting it wasn’t a good bet and it turned out well?
Ted Sarandos: Not that the internal data that proved to be wrong. But that things that defy conventional wisdom. Certainly, the international reach of the Sandler movie "The Ridiculous 6" kind of validated the data, which was that Adam Sandler works in every window in every country for the last 20 years. Even though American comedy supposedly doesn’t travel. In some of these countries where the movie is doing well, his movies don’t even open in theaters. "Master of None" is a pretty New York-y show. Some people would say that shouldn’t even travel to the middle of the country, and it travels everywhere in the world. "Narcos" is mostly in Spanish, and it plays in huge mainstream numbers in the U.S.
I imagine with "Narcos," a lot of the appeal was also that it was going to be huge internationally for you.
Ted Sarandos: Going in, for sure. The surprise was that it was hugely received in the U.S. Again, the proof is that people really love great storytelling and they will deal with subtitles if that’s what it takes if the story is good enough.
But there hasn’t been an incident like the “Seinfeld” pilot, which is infamous for being one of the lowest-testing pilots in the history of television, but NBC picked it up anyway. You haven’t had anything like that?
Ted Sarandos: No. I mean, there are things like I said where a lot of our choices defy conventional wisdom about, "Don’t make a show about Washington D.C. Don’t make a show about politics. Don’t make American comedies that travel," all those things. I think we defy all of those conventional wisdoms of television. The rhythm of a show — like not ending in a cliffhanger. Any serialized show on television ends up with a ridiculous cliffhanger. We don’t end every episode with a cliffhanger like that.
You’ve gone straight to series. No pilots. Do you feel like this method works well enough you don’t need to pilot things?
Ted Sarandos: I think it works well enough. I think people make pilots – they're risk averse. And I think they’re looking for reasons to say no and we’re looking for reasons to say yes.
Because you certainly would have the ability, if you wanted, to do what Amazon has done, which is make pilots, put them on and let people vote on them.
Ted Sarandos: Sure. They’ve made 49 of them so far and I don’t know that, but for a couple of shows, people can name Amazon programming. I don’t know that it’s proven to be a better method. In fact it’s proven to be a very high missed method by the networks for years. Decades.
Is there a point at which you don’t want to take the original programming amount past? Like, you can’t sustain that many?
Ted Sarandos: We’ve seen no point of diminishing returns on the horizon. So I know we’ve not seen any kind of point of diminishing returns of how you can’t support, because of the personalization. Remember, we’re releasing shows that are really broad and we’re releasing them in a super personalized manner. So one thing that Netflix will do that no network would do is not tell segments of their population about a new show coming up. And we do that all the time.
You have “Master of None” coming to TCA today, and in an ordinary TV publicity cycle, that show’s PR is over because it’s already aired. But someone could be discovering that show at any point.
Ted Sarandos: Yeah. It’s a new show because you haven’t seen it, and it’s still fresh. And right now like people are still buzzing around. So "Master of None" has had a great second and third life as a new show. First of all, it was on Best Of lists when they all started coming out. And so many of them had "Master of None" (on) the list. And then the award cycle comes along, and we hope it will happen again with the Emmys. Remember, if you find an unexpected show like "Master of None" and you tell your friend about it, now you’re three or four weeks into the show, and any other kind of delivery model, they’d have to do a lot of work to start where you did. So normally what they would do is they’d start the third or fourth episode in. So they wouldn’t have the same experience that you did. So you’re telling them about this great show, and they’re like, "It’s okay," because they’re mostly like, "I don’t know why they’re in that restaurant" or "What happened there?" Where it’s nice with Netflix, even though it was discovered at a different time, they’re discovering it from the same point all the time.
Are there still large numbers of people who are discovering “House of Cards” now?
Ted Sarandos: Absolutely. And every season, there’s a whole new wave of season one watchers that come along. So we have this cycle of the new season that drives it, and just a cycle of current events that drive it and the algorithms rooting people out that they’ve not been discovered yet.
Obviously, the algorithm can drive recommendations but there’s also the matter of what you’re literally promoting on the home page, or when you load the app.
Ted Sarandos: It’s also super-personalized. So what you’re seeing really is geared to the things you love. It’s very rare that we’ll show a new show to everybody on the base. So that billboard that you see on top is highly personalized as well. Or if they do see it they see it once and it’s pulled.
Because ordinarily the way you do it is you would flood the zone, and everyone who logs in on “Master of None” release day is going to see “Master of None.”
Ted Sarandos: It’s a huge internal debate all the time about how broad any of that can be, because what you don’t want to do is bring in a lot of unqualified viewers who will not like the show, and then rate it poorly and give it bad word of mouth. So if that algorithm works, it can organically build, and I’m not worried about the overnight ratings. I’d much rather build a show healthy that way and end up with positive word of mouth than to risk killing it with negative word of mouth.
I want to go back to the questions of serialization. One of the things I’ve noticed with your shows is that there’s a whole lot of story that’s spread out over 13 hours, but there isn’t always necessarily something to differentiate one episode from the next. Some of the “Jessica Jones” episodes have specific structures — now they’re in the house together, now he’s in a cell — while others are just the next part of the plot. Do you think that really necessarily matters doing it one way or the other?
Ted Sarandos: I think I know what you mean. It leaves you with a lack of a favorite episode sometimes. I think you should think about our serialized shows as a lot more like a 10 to 13 hour movie. And it isn’t as easy to slice and dice into episodes. And we don’t really put a lot of pressure on the showrunners to deliver a thing every episode or that this has to play out in the next 60 minutes. And I think it gives it a much more organic feel and people connect with it better. I usually use "House of Cards" the first season, the second episode that just ended with Francis on the rowing machine as an example of this. Like, the anti-climax. The anti-cliffhanger. And yet people just seamlessly strolled in and wanted to keep going because what’s he up to? How can he be so calm? Do you know what I mean? Versus that he’s in some kind of peril.
One of the things that I found — and I may be unusual in this because of what I do for a living — is that I often will go back and revisit individual episodes of serialized shows, like a “Mad Men” or a “Sopranos” or a “Breaking Bad.” And your shows, even the ones that I really love, I don’t necessarily feel that compulsion unless I’m going to go and watch the whole thing again.
Ted Sarandos: It might be unique to you, because I do find like (if) I revisit "Sopranos" episodes — and I was a religious Sopranos watcher — a small fraction of those episodes hold up for me the way they did when they were new, for probably the same reason. Like I had to keep reminding myself what happened before and after, and it really wasn’t that contained.
You talked before about how people watch “Friends.” They don’t just jump to the one with the game show. They watch the whole thing. Do you see either with the original or your catalog titles that there’s a lot of rewatching. Do people go back and watch “Orange” a second time?
Ted Sarandos: They’ll rewatch the whole seasons again, for sure.
But how much?
Ted Sarandos: I don’t know what the number is. I don’t track it that way. We could to and break out uniques. We could do it, but it doesn’t matter to me really. But I know there’s quite a bit of rewatching. Particularly I think of the "Wet Hot American Summer"s and "Arrested Development"s and people watch those shows obsessively over and over again.
How often do you look at catalog titles, even movies like “Wet Hot,” and ask if there’s an opportunity to have them do more, like you did with Mitch Hurwitz and “Arrested”?
Ted Sarandos: Well, some of it is natural. I think of a show like "Arrested" and a movie like "Wet Hot," where the fan base not only stayed intact, but grew. Usually, I think cults get smaller and more passionate, where "Arrested" and "Wet Hot" actually grew every year. And every year they would do a screening of "Wet Hot American Summer" in Brooklyn. The last year, 5,000 people showed up to it before we ended up doing this. And I think it’s the addressable audience that’s big enough and dependable enough and then the show can get broader. Most people never saw "Wet Hot American Summer," so it had to stand alone, which it did because of the great cast, and it was really funny. And I think if you were a fan of the movie, it made you want to go back and watch the movie again, because it’s very odd for a prequel to literally change the outcome of the movie — it’s a whole different movie once you’ve seen this thing. And the attraction though, was not like we were looking to make a prequel or a sequel to something. David (wain) came in and pitched the movie sequel and we said, "You know, I think this can work as a series and do a lot more than you could do in 90 minutes." And he was able to pull it off.
Could you ever see yourself doing a revival of a show where you don’t have the catalog rights? When NBC canceled “Community,” you weren’t going to pick it up, because it was streaming on Hulu.
Ted Sarandos: Yeah, it’s unlikely, because it’s such a weird experience to send our members somewhere else to watch something, or to get into the groove of a show. "Gilmore Girls" —I’m trying to think of the shows where people really love them and put them on Netflix that’s really the thing that helps us.
Like, we didn’t have much insight into how much people love "Community" outside of the Nielsen rating, which are not very dependable.
Alan Sepinwall may be reached at firstname.lastname@example.org