Netflix's Ted Sarandos Calls Disney Content Deal a 'Game Changer'

 Stephen Shugerman/Getty Images for Netflix

NEW YORK - Netflix's new content deal with the Walt Disney Co. will prove to be "a game changer" for the online streaming service, chief content officer Ted Sarandos said Wednesday in New York. And he said his company will look for additional exclusive content deals and agreements with major studios, including Warner Bros.

He also called the company's relationship with activist investor Carl Icahn, who recently acquired a stake in Netflix, good so far. "This relationship is pretty new, but it has been very positive," he said. But Sarandos added that they have not yet spoken about the Disney deal.

Speaking at the 40th annual UBS Global Media and Communications Conference in an onstage interview conducted by Harvey Weinstein, Sarandos said the Disney agreement -- which makes Netflix the exclusive place for Disney films in the pay TV window -- proves that Netflix is a real top solution for studios.

He later also told reporters that the Disney deal would give Time Warner's Warner Bros. a chance to see that "there are other ways" of doing business. Warner currently has a film output deal with premium TV provider HBO, which is also part of TW, that expires in 2014. Sarandos has in the past said he will bid for Warner content in the hope of outbidding HBO.

In his conference session, the exec also called Disney a "near-perfect media company" given its multiple brands, including Pixar and Marvel. "It's really amazing," he said. Sarandos added that the deal will for the first time bring Disney classics such as Dumbo and Pocahontas and lesser-seen direct-to-video movies to a broader audience. "It will be a huge step forward for our programming," he said.

Sarandos said the Disney content talks started before the latter's Lucasfilm acquisition, though the Netflix deal will add even further great content down the line.

Asked about his interest in further exclusive content, he said he will look at other content that is not available on other TV services and that can come to Netflix under shortened windows. Sarandos said Netflix will more and more become a curated, exclusive content service that is more relevant than others but doesn't carry all content.

Weinstein asked Sarandos why Netflix recently let expire the exclusivity of a content deal with premium TV service Epix. “It wasn’t valuable relative to the premium," the content guru responded. He pointed to the fact that the Epix content from Viacom, MGM and Lionsgate already is available on Epix and comes to Netflix three months later.

Disney's films are currently carried by Starz, which also has an output deal with Sony. Asked by THR after his conference appearance about his interest in possibly striking a film deal with Sony, Sarandos said: "All are interesting," and the company has been in discussions with all.

He also expressed interest in more animation content, highlighting that Netflix has negotiated to get Universal's The Lorax and Focus Features' ParaNorman, which would have gone to HBO, but became available because HBO doesn't focus on animated fare. Sarandos said "big animated features [have] constantly performed well for us," with many repeat views. He suggested that there could be a way to "institutionalize" such deal for animated films that HBO doesn't want, but didn't provide further details.

With Netflix pushing into original content, Weinstein asked if the firm would benefit from having shows with such big names as Howard Stern or Jon Stewart. Sarandos said that The Daily Show is a great program, but shows like it don't have a long-enough shelf life to work well on Netflix.

He did reiterate his interest in scripted content though. Asked by reporters later if Netflix would bring back The Killing, as rumored, after AMC recently cancelled it, he said that was "in the mix," but he had nothing to talk about yet.

Discussing the competitive landscape, Sarandos said that Amazon Prime is "a throw-in," not a separate online video product, and Hulu's product mix also is "much different." Overall, the big current players "do not compete in the same content set," he argued. Industry observers have predicted increasing competition in online video streaming over time.

Sarandos also was bullish on Netflix's outlook in the U.S. and in international markets. "We are in the early stages of where this business can be," he said.

The Netflix content chief on Wednesday also reiterated that the streaming service doesn't hurt traditional TV viewing. Nickelodeon may have had "a little ratings slump" over the past year amid increased availability of kids content on Netflix. But he argued that the counterpoint is that the Disney Channel, which had more content on Netflix, saw ratings gains.

Sarandos also said Netflix doesn't care about ratings and won't start disclosing how many views certain shows or films got. "It is an irrelevant benchmark," he said, adding that "pressure on the time slot" is the most difficult thing about traditional TV as it is hard and expensive to make people watch content at a specific time these days.

Weinstein opened his session by quipping that he was no Charlie Rose or Piers Morgan and saw his hosting duties as "just a hobby."
But he also joked that it could be "perhaps an audition" depending on how the current Oscar race works out. He quipped that he may be looking for a job after the race.
 

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

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