Netflix’s Ted Sarandos -- Distribution Windows Will Shut (& More Responses to My Direct Questions)

Yesterday morning, I attended a small event hosted by Bloomberg and featuring Netflix’s Chief Content Officer Ted Sarandos (who has been with Netflix since 2000), who was surprisingly forthright about the company’s thoughts about disruption and new business models in the over-the-top (OTT) premium video distribution world.  Here are some choice sound-bites from his interview (including from my after-the-event direct conversation with him):

-- regarding distribution windows, he started by saying he is not calling for "day-and-date" distribution (which means concurrent same-day motion picture release in theaters and online); BUT, after the event, I asked him some direct questions -- most particularly, whether he felt that “day-and-date” was inevitable.  In response, he indicated that he does expect these windows to essentially shut and feels strongly that that reality is best for all players in the video eco-system.  But, interestingly, he does not feel that it may make too much of a difference to consumers if the motion picture is released online precisely on the same date as theatrical release (in his words, “not sure if consumers will care if it is one week later ...”);

-- I asked him what that reality means for theatrical owners and their business model.  He indicated that theater owners will be fine if they focus on their unique customer experience.  As an example, he pointed out that a full 3-D “Gravity” experience cannot be achieved at home;

-- when asked how Netflix uses -- and will use -- its massive trove of data, he said “I’m not a believer of reverse-engineering content”; he said efforts to do so would “lead to a Frankenstein monster” of content; so, “don’t use data to guide good story-telling”, rather use it to determine how many fans a director like David Fincher has;

-- speaking of Fincher, Sarandos emphasized that NO one outside the company has access to its data to understand how well their motion pictures and shows are performing; that confidentiality is bound in its contracts;

-- he underscored that live sports are “not a priority”;

-- when asked about Amazon’s new strategy of releasing 3 episodes of its shows at one time, in clumps (as opposed to Netflix releasing all of them at once), Sarandos indicated that he/Netflix believe in more choice for consumers, not less; “why try to out-guess consumers” about what they want?

-- he also emphasized that Netflix’s economics are very different than the major television networks, because Netflix is not saddled by the scarcity of time-slots and making those slots and shows work; Netflix can have a very successful business with many “singles and doubles”, whereas all network shows must be major hits to succeed.