Netflix's Ted Sarandos Responds to Claims of Curtailed Creative Freedom

Ted Sarandos - Getty - H 2016
Getty Images

Ted Sarandos - Getty - H 2016

The streaming giant's chief content officer tells a Royal Television Society event in London that his team has "more buying power than anyone in Hollywood" and touts a push into unscripted fare.

Netflix is on track to double its original programming output as it has done in recent years and is adding new genres, especially unscripted programming, such as competition shows, chief content officer Ted Sarandos told a TV industry conference in London on Tuesday.

Speaking at a Royal Television Society conference with the theme "Full Stream Ahead," he also said the company continues to expect its international business to turn profitable. And he addressed Netflix's role and input on originals after a THR report about how some creatives have asserted that creative freedom was showing signs of being curtailed.

"Our job is to pick the right shows, pick the right storytellers and create an environment where they can do the best work of their life.... Our creative involvement in the shows is collaborative and always invited," Sarandos said, sharing what he has impressed on his team: "If you are not collaborating with the show by the time it's in production, then we have failed in some way, if we haven't been invited into the process. But we don't impose ourselves on the process creatively."

He said, "When we say that we allow total creative freedom, part of that is that everybody wants to make a great show, and to the extent we can be helpful in that process, we are." He added he would not "give creative notes" on projects that are "in great hands," saying he wouldn't give notes to The Crown writer Peter Morgan, for example.

Asked about Netflix's programming budget, Sarandos reiterated past comments that the company is targeting $6 billion next year, with the number of originals continuing to increase. He said four years ago the firm wasn't producing any originals, but "this year, we had 17 different shows for 54 Emmys," he said. He said overall the company has doubled its original programming output every year for the last four years, "and we are trying to do it again."

After all, originals get more viewing time than licensed shows, plus they help position Netflix as a destination, he said. Netflix's CFO recently said the company was heading toward a 50:50 split in terms of originals and licensed programming over the next couple of years, and Sarandos confirmed it was on its way to that.

Netflix currently has 30 scripted originals in production, plus 35 kids programs, 60 documentaries in different stages, a dozen feature films and local-language productions in nine countries, Sarandos said. He said his programming team members “probably have more buying power than anyone in Hollywood," and he likes to give them room to make bets.

Part of the strategy with originals is "not trying to do brand-defining things," but "letting the shows create their own brands and define their own brands under our umbrella," he explained.

What genres are becoming a bigger focus for Netflix? "We are embarking on a lot of unscripted programming," Sarandos told the London conference, citing about 20 original projects in various stages of production or pre-production.

"The newest thing we're encroaching on are competition shows," he said. He cited Ultimate Beastmaster, executive produced by Sylvester Stallone. Its first season will feature contestants from six countries on an obstacle course, with each country's version able to focus more on the country's contestants.

Britain also continues to be a big focus for Netflix. "We are very engaged beyond The Crown," a drama that is launching soon, Sarandos said about the company's U.K. production plans. Black Mirror is returning with six episodes, he pointed out, for example, also citing Scrotal Recall, renamed as Lovesick. He said Happy Valley, Peaky Blinders and other British shows have been a success for Netflix in the U.S., meaning that ordering British originals is a natural extension for the company.

The company's film strategy was also in focus. Sarandos said he likes to work with filmmakers entering TV, because films have had more global drawing power than TV historically, making the transition easier and a positive for Netflix. Film is "a distinctly different art," and movies still account for a third of viewing on Netflix, he said in explaining why the company has pushed into the original film space. He said the focus is on exclusive movies or offering movies when they open, unlike pay TV, which tends to feature films people have already seen or chosen not to see.

Large-scale films from the likes of Brad Pitt and Christopher Guest are therefore one key focus for Netflix, he said. He also cited Bright, the magic-infused cop thriller with Will Smith and Joel Edgerton from Suicide Squad director David Ayer, as being a potential franchise for the company.

"It made me a little sick to my stomach," Sarandos acknowledged when recalling seeing his 20-year-old son, an aspiring filmmaker, watch Lawrence of Arabia on a mobile phone. But he said older consumers tend to care more about screen size than younger ones. Sarandos also said he always finishes movies he starts watching, while his son has told him he stops or leaves one in three movies.

Asked about virtual and augmented reality, Sarandos said, "VR is something that is exciting" but "probably more for gaming" than narrative projects.

Netflix now serves 190 countries, but the world's most populous nation, China (as well as North Korea and Syria) remains untapped. Netflix has repeatedly expressed interest in launching its service there, but censorship concerns and stringent regulations affecting foreign content providers continue to present barriers. "We do look at China as a big opportunity, but it's a complicated [market]," Sarandos previously said. "We are seeing what we can do about it in the future." He didn't provide an update on Tuesday.

But he emphasized recent localization efforts. After the company turned on the lights on Netflix across the world in January, the company has been localizing languages, banking offers and the like in various countries.

Netflix recently rolled out a Polish-language and Turkish-language service, dubbing or subtitling the bulk of its programming in the territories to better serve audiences there. The moves are part of a broader strategy by Netflix to jump-start growth in key international markets by expanding beyond viewers who speak or understand English. In most places its programming is heavily tilted to U.S. series, typically with a 80:20 split of U.S. versus local content.

Asked about what programming does well globally, he said English-speaking content "travels brilliantly." But in Asian countries, such as Japan, appetite for local fare is more ferocious, meaning up to around 70 percent of content there is local.

While one of Netflix's competitive edges in international markets is its U.S.-produced original shows, such as House of Cards and Orange Is the New Black, the company is also expanding the use of local-language content overseas that it will also distribute in North America.

Netflix previously reported that it added a fewer-than-expected 1.7 million subscribers during its second quarter, below a company forecast of 2.5 million subscribers and the 3.28 million added in the year-ago period. It added 160,000 subscribers in the U.S. and 1.5 million subscribers in international markets. It ended June with a total of nearly 83.2 million subs, including 36.1 million internationally and 47.1 million in the U.S.