Netflix's Cindy Holland on Streaming Competition: "There's Plenty of Room for Everyone"
Speaking at the INTV conference in Jerusalem, Netflix's vp original content outlined the tech giant's plans for global expansion.
Netflix isn't worried about the studios muscling in on the global streaming space.
"There is plenty of room for everyone to be successful," said Cindy Holland, vp original content at Netflix, speaking about the emerging challenge from new SVOD platforms run by studio majors. Disney is set to launch its Disney+ streaming service worldwide this year, recently poaching former Netflix executive Tehmina Jaffer to help run it, and new platforms from WarnerMedia and NBCUniversal are waiting in the wings, with launches expected by 2020 at the latest.
But Holland, speaking on the first day of the INTV international television conference in Jersualem on Monday, dismissed the idea that the new competition would be bad for Netflix.
"There's a lot of opportunity for all the big entertainment companies that have existed for quite some time as well as the new entrants," she said, "Nothing has been decided yet. On-demand TV is truly in its early stages and there's room for many companies to be successful."
Holland added she didn't think the SVOD business was "a zero sum game" where new entrants would cannibalize existing Netflix subscribers. "There's a lot of room for expansion," she noted. "We've seen in the U.S. and other countries that other countries are growing as quickly as they have before.... We have 139 million paid members, which translates to something like 300 million viewers around the world (and) we believe we can be growing for quite some time."
But the future of Netflix, Holland said, is international. Noting that 80 percent of new member acquisitions for Netflix are coming from outside the U.S., Holland said the streaming giant is "very focused" on boosting its global production of original international series. She name-checked Spanish-language hit Money Heist —which Spanish network Antenna 3 commissioned and Netflix took worldwide, and which has become the company's biggest non-English speaking show worldwide. Netflix recently greenlit a hugely ambitious adaptation of Gabriel Garcia Marquez’s epic novel One Hundred Years of Solitude and Holland said the company's track record with foreign-language series was key to winning over Garcia Marquez’s sons Rodrigo Garcia and Gonzalo Garcia Barcha, who will executive produce the series, which will be shot largely in Colombia.
Holland drilled down a bit into Netflix's commissioning process, noting that the company was focusing on very "specific and authentic content" that would resonate in the country where they are produced. "If it resonates really well in its home market, it may succeed outside. If it doesn't do well there, it's not likely to go outside," she noted. And, while acknowledging that content and Netflix's algorithm technology are "mutually dependent," Holland said the company was not making commissioning decisions based solely on data.
"Humans are making the decisions about what we choose to invest in, (but) we're aided by the info we have and we'd be foolish not to use it," she said. "When we are trying to make a decision about a specific title, we can size up what the audience size might be and how much to invest. But the key, like in any other creative endeavor, is — is this a great idea? Could this go for multiple years? Do we believe in the ability of the creative team to deliver?"
Holland said Netflix also used its user data to find untapped demand. After noticing there were very few high-end shows targeting teen audiences, she said, Netflix greenlit 13 Reasons Why and Stranger Things.
While carefully dodging any discussion of ratings on Netflix — "we aren't an advertising-driven business, so why should we engage (in ratings discussions)?" — Holland did offer up some data about Netflix's global audience. The average Netflix user, she said, watches the service for two hours every day and a majority watch on a device connected to a television, not on a mobile device. Despite the company's vast library of content, Holland said most Netflix users take "a couple of seconds" before deciding what they want to watch.
"A lot of what we try to do (is) building personalization. So out of the 100,000 (possible shows), how do we find the 40 things that are most likely to resonate with the users," she said. "That's where our technology helps us, to put something in front of (subscribers) that they are most likely to watch and that will touch them."
Technology also informs Netflix's decision to cancel shows. Holland said the company generally knows "within 28 days" whether a show was meeting the company's expectations in terms of audience reach.
"If the audience doesn't show up, we think about the reason to continue to invest in something that doesn't do as well as we had hoped," she said. "Obviously critical acclaim is important, too, but we're really about trying to stretch our investment dollars as far as we can and make good on our investors' money...if there's a point of diminishing returns (we may decide to cancel)."