Netflix's Sarandos: Quality content will keep subscribers coming in

Despite the possibility of hitting a subscriber wall in the United States, Netflix (NASDAQ: NFLX) is putting its focus on creating quality content to attract and retain viewers--both at home and abroad, according to Ted Sarandos, content chief for the SVOD provider. And that means premiering original content, either brand new series or movies, or a new season, every two and a half weeks on average--eventually.

Ted Sarandos content chief Netflix


Sarandos addressed investors at the UBS 42nd Annual Global Media and Communications Conference on Monday, answering questions about the value of the OTT streaming giant as the tide of competitors rises. He said that Netflix will probably ramp up from its current nine original series (including Marco Polo, set to premiere Friday) to at least 20 within the next five years.

"We're probably one of the largest off set buyers in the world and probably will be one of the largest producers of original content in the world."

Sarandos wasn't too worried about competition from U.S. legacy providers, at least in the near term. Networks need to build their TV Everywhere offerings, he said. "If they can better monetize that content, they could and they should."

But Netflix's content deals are also being made with a global view. The provider locked in worldwide second-run rights to Better Call Saul, the Breaking Bad spinoff, and Gotham, Fox's origin-story take on the Batman franchise, before either series premiered.

"Better Call Saul and Gotham are probably two of the highest anticipated shows of the season. … What you're seeing is one of the first (examples of) global buyer programming," he said. "There were 50 TV buyers around the world who would have liked to be in the mix. We went in preemptively and worked those deals."

Sarandos also explained the rationale behind Netflix's recent deal with The Weinstein Co. and IMAX to simultaneously release its sequel to Crouching Tiger, Hidden Dragon in theaters and on Netflix.

"It's absolutely unfair" that movie studios like Paramount make audiences wait five months to watch a film after it premieres in theaters, he explained. Instead, studios, distributors or networks could invest in a new monetization model, like dynamic advertising, to bring movies to audiences sooner. And they need to do something, because viewing behavior is definitely changing as more viewers binge-watch content. "That is absolutely happening because that's what people love. You can spend all your time trying to circumvent that problem" or figure out a way to profit from the trend and keep viewers, he said.

Sarandos has made it clear in the recent past that he wants to force the movie industry to change how it markets and licenses its content. But Netflix's international expansion is also driving a cultural change among pay-TV providers and networks elsewhere.

"There's a big access issue outside the U.S. for TV because the historical model is 'let's see how big a hit it is in the U.S. and then we'll bring it here.' …When we launched in Nordics they were two years behind on Walking Dead," Sarandos said. "We've been going in and forcing these windows earlier and earlier and audiences love it."

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