“We’ve been competing with Disney and all these other folks who are coming into this from the beginning,” he said. “For us, nothing really changes. We’ve always been customer-first and we don’t really get distracted by competition. We figured at some point everyone would get into this business.”
The executive made the comments in a half-hour conversation with comedian and Saturday Night Live cast member Chris Redd at the Paley Center’s International Council Summit in New York. Disney+ on Wednesday reported 10 million sign-ups during the first day its new service was live, a number that exceeded Wall Street forecasts and sent its stock to an all-time high, with Netflix shares retreating.
While Sarandos saluted Disney as “great storytellers and a hugely successful company,” he said he was “frankly surprised it took Disney and other people this long to go down this path. It’s a hard change.” Elaborating, he continued, “These companies that have been built on making and selling content to other people, can they actually make more money or do better in business selling it directly to the consumer? … It’s a hard bet, and it’s a bet-the-farm one.”
Of Disney’s stable of strong brands like Marvel, Star Wars and Pixar, Sarandos said, “I don’t know if it’s a luxury or a trap, but they have IP. They have established IP, and they kind of keep to within those worlds.”
Netflix is built differently, Sarandos said. “All of the IP we have on Netflix that’s original is created IP, sometimes out of whole cloth or sometimes from a book or something, but not universes that we feel bound by,” he noted. “I do think the risk of being bound in a few universes is that there sometimes may be a melting ice cube of interest over time. You have to keep reinventing, which is great. But I like the ability to keep reinventing across the platforms, across the universes, across programming ideas and programming verticals, without the constraints of a handful of universes.”
Sarandos also weighed in on Netflix CEO Reed Hastings’ assessment of the Patriot Act controversy, after he was prompted by a question Redd read from an index card, with evident relish. Last week, in an appearance at the New York Times DealBook conference, Hastings explained the streaming giant’s decision to yank an episode after facing heat from the Saudi Arabian government. His rationale was that Netflix is not in the “truth to power” business, but rather is “trying to entertain.” The company does have high standards, he noted — if asked to remove LGBTQ programming, for example, it would not, Hasting said.
“I think all entertainment is truth to power,” Sarandos said. “I don’t know if it was not a great choice of words or misspoken. But I think what he was getting at was, we’re not in the breaking news business. … It’s just not what we do. We’re not reporters and editors, we’re not in that business of creating and being great at news.”
Redd called Patriot Act host Hasan Minhaj “brilliant” and said the show is “definitely about the news.” Sarandos replied, “It’s about the news, but it isn’t the news itself.” Netflix faces a challenge as it expands globally, Sarandos continued, to understand the differing laws, standards and regulations across the world. “You have to figure out how to navigate it.”
Listening to Sarandos and taking a long, expertly timed pause that drew chuckles in the theater, Redd said, “Man, you’re good at this.”