Netflix’s Sarandos hints at sports interest, explains download strategy

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Ted Sarandos, chief content officer at Netflix, reiterated the company’s general aversion toward carrying live content like football. However, he opened the door to other alternative sports content.

"To the extent that the ‘liveness’ is a selling point, we're really not in a great position,” Sarandos said during an appearance this week at the 44th Annual UBS Global Media and Communications Conference.

Sarandos explained that Netflix has little interest in bidding for the rights to carry content from the likes of the MLB, NFL and NHL. He explained that fans of baseball, football and hockey tune in to find out which team will win, and that there’s very little repeat viewing.

However, he said that fans of a reality contest show like "American Ninja Warrior" do go back and rewatch performances by specific athletes. And he said that this kind of sports content might interest Netflix. “This might be educational for us, in a way that leads us into different alternative sports. League creation might be interesting."

Indeed, Sarandos pointed to Netflix’s upcoming show "Ultimate Beastmaster" as an example of the types of sporting events the company might be interested in. Announced earlier this year, "Ultimate Beastmaster" is a “new action-packed global competition series” from producer Sylvester Stallone. The company said the international competition series will sport six customized local versions featuring local languages, competitors and hosts from each competing country, for the United States, Brazil, South Korea, Mexico, Germany and Japan.

Interestingly, Sarandos added that this kind of TV-style content accounts for fully two-thirds of all of Netflix’s streams. “No matter what, we end up with about a third of our watching is with movies,” he said, explaining that that 1/3 ratio plays out in countries where Netflix offers a wide range of movies, like Canada, as well as in countries where it doesn’t, like in the United States.

“What you’re left with is a more dispassionate [movie-watching] audience, and so that viewing is likely not to differentiate you from everybody else,” Sarandos said, explaining that investments in extensive movie libraries don’t necessarily help set SVOD providers apart from the competition. “It’s fine to have, I’m happy to have it,” he added, noting that Netflix will soon carry Disney films like "Captain America: Civil War." He said Disney movies are rewatched more often than movies from other studios.

Sarandos also addressed Netflix’s recent announcement that it will allow its customers to download some movies and TV shows for offline viewing. He said the company enabled the technology mainly for users in emerging markets.

“For the most part we developed it for our entry into emerging markets that have much slower broadband and very little access to Wi-Fi,” he said. “Once we unlocked that for emerging markets, there was no marginal cost to offering that to the rest of our subscribers around the world. It’s much easier for us to scale if we launch products globally.”

Finally, Sarandos also addressed the issue of net neutrality, which has gained newfound interest due to speculation that President-elect Donald Trump might move to rescind part or all of the FCC’s Open Internet guidelines around net neutrality.

“You want the content to be so desirable that everyone treats the bits equally,” Sarandos said. Netflix has long been a proponent of net neutrality principles. “Which I think is all we've been asking for from the beginning, is that the bits get treated equally across all the carriers. And as long as that's happening, that's meeting our objectives. And as we build more and more compelling content, the idea of making it more expensive or more difficult to get to—there’ll be consumer reaction to that as well."