10:09am PT by Lacey Rose
Netflix's Content Chief on Profitability Digs and "Too Much TV" Debate
Netflix chief content officer Ted Sarandos took the stage Sunday and restated a question that had been asked often over the course of the Television Critics Association’s winter press tour: “Is there too much TV?”
But unlike many of his rivals, his answer was definitive. “We don’t think there’s too much,” he told a ballroom full of reporters. “And if there is, someone else is going to have to slow down because we have big plans for 2016.”
The statement came mere seconds after he'd announced that Netflix would offer its 70 million subscribers more than 600 hours of new original content this year. In the same breath, he reiterated plans to double his kids programming output, and stressed the opportunity he sees with older kids and true family viewing. “And despite that pace [of expansion], we don’t think we’ve sacrificed an ounce of quality,” he said, rattling off a string of recent critical hits including Master of None, Jessica Jones and docuseries Making a Murderer.
Sarandos was less concerned about the company's profitability, which had also become a popular press tour topic. “We’re going to spend $5 billion on content on a P&L basis,” he explained. “The profitability of the company is mostly driven on our international expansion space, not on the content space specifically. Our original shows are part of the total content spend, so as we expand the original spending it’s still in the same pool of content spend.”
FX Networks CEO John Landgraf had a decidedly different take a day earlier, suggesting that something would have to give eventually. “Netflix went from zero shows three years ago to, last time I counted, 55 adult series,” he told the same room. “And a lot of people made a lot of money buying Netflix stock. It was up, I think, 140 percent last year, but it doesn’t make any significant amount of profit." The latter inspired a larger discussion about Landgaf's frustrations with the apples to oranges comparisons often made between legacy media companies like his and newer streaming services like Netflix.
"Because there’s a perception that’s very carefully cultivated by Silicon Valley that essentially they’re going to take over everything, they don’t have to be held to the same standards in terms of earnings because you’re buying the future," said Landgraf, noting that FX's earnings are many times higher than Netflix's globally. "So, we have to return a profit to our shareholders and our board of directors and we have to grow that profit year in and year out; and nobody pays attention to the profitability of many of our competitors."
Though the remainder of Sarandos' time before the press was largely devoted to the always entertaining subject of Netflix's ratings, which are detailed here, the other highlights are as follows:
The Get Down, in Two Parts?
When the first season of Baz Luhrmann’s musical drama The Get Down rolls out on Netflix, it will do so in two batches. While he insisted Netflix had no plans to abandon its all-at-once release model, splitting up The Get Down allowed him to expedite the process of getting the ambitious series to air. “Baz Luhrmann productions take a long time,” he said. Plus, creatively the team felt the series had a natural break after six episodes.
Live TV? Not Yet, Anyway
Sarandos once again shot down plans to embrace live sports or news on its service. “There’s no tech reason not to do live,” he explained, “[but] part of our core consumer proposition is on-demand TV, so live muddies the consumer proposition.” But rather than shutting the door entirely, he simply told the room there were “no immediate plans.”
That Daredevil Spinoff
After news leaked that Netflix was eyeing a Daredevil spinoff featuring Jon Bernthal's The Punisher, Sarandos was pressed for further details on additional series coming out of the Marvel series. He told a cadre of reporters post-panel that anything was fair game when it came to additional spinoffs, including Electra, played by Elodie Yung. Yung and Bernthal will make their debut in Daredevil season two.
Everything Else …
Netflix's business affairs team is still hammering out deals for a Gilmore Girls revival, so Sarandos had no news to share there. As for a Making a Murderer follow-up, he said simply, "the story is still unfolding … so we'll certainly take a look at it." Oh, and Kate del Castillo is still poised to star in Netflix's Spanish-language series, Ingobernable, despite the recent frenzy surrounding the Sean Penn El Chapo interview that she helped facilitate. "It's very complicated, but so far so good," he said, adding: "We’ve been in constant contact with her."