If you’re anything like me, you probably spent some large portion of this week sitting on your couch watching Netflix. I love rom-coms — my latest obsession is a Turkish series called “Thank You, Next” — and the more rom-coms I watch, the more of them Netflix feeds to me. Maybe you’ve had this experience with sports documentaries, or thrillers, or biopics. It’s something we’ve all gotten used to. Which means, as I’m pressing play on whatever comes up next, I’m not really thinking about the people who are deciding what I’m consuming. And that’s why I wanted to talk to Ted Sarandos.
Sarandos, 59, has been at Netflix for 24 years, nearly as long as Reed Hastings, one of the company’s two founders. He is now co-chief executive and is in charge of Netflix’s creative output. He oversaw the company’s early expansion into streaming and pioneered the binge watch. Under him, Netflix developed that powerful algorithm that knows just what to serve up next. He was also the guy who greenlit Netflix’s early original productions, like “House of Cards,” making Netflix into a studio, not just a platform. And he has led the company as it has ventured into reality TV, prestige film and live entertainment — including a just-announced deal to broadcast some of the N.F.L.’s Christmas Day games.
Sarandos seems to be very good at giving us more of what we want. And after a crackdown on password-sharing (which Sarandos tells me is still in progress), his company has come out on top in the crowded streaming wars (if you set aside YouTube, which Sarandos does not). That doesn’t mean everything is rosy all the time now — the company has had several rounds of layoffs in the past few years — but Sarandos, along with his co-chief executive, Greg Peters, has put Netflix in a dominant position. Has this been good for us? Or for culture? When we talked recently, with viral clips of Netflix’s Tom Brady roast flying all over the internet, I asked him.
You have an unusual background for a Hollywood or tech C.E.O. I would agree with that assessment. My parents had four kids in their 20s. So these were kids raising kids really. Our house was always chaos. And my only escape from that chaos was that little box. I watched a lot of television. Most of my upbringing, we never had all the utilities on at the same time. So the gas would be cut off, and then the phone would be cut off, and the electric, but never all simultaneously. But for some reason we had a VCR. And total happenstance, the second video store in the state of Arizona opened up two blocks from my house.
Do you remember the first thing you ever checked out in the video store? Yeah, it was a filmed version of the Willie Nelson Fourth of July picnic. [Laughs.]
And you actually ended up working at a video store. At that very video store! Arizona Video Cassettes West.
The way I’ve heard you tell it, there were like 900 titles in the catalog, and you saw all of them. And people would come in and ask you for recommendations. People would walk in and roam around the store aimlessly, but they kind of enjoyed that experience. It was pretty novel at the beginning. But then you’re really trying to find something in that sea of boxes. And eventually I realized I had this interesting capacity for remembering these movies. And when people would come in, I would remember: Oh, hey, remember, you liked that movie? You’re going to love this one. And I got good enough at it that even when the store was very busy and there was a long line, they would wait for me because they wanted me to suggest something to them.
So cut to now. We have Peacock and Hulu and Apple+ and Max, and they’ve all spent a fortune trying to catch up with Netflix. And the consensus seems to be that you, Netflix, won the streaming war. I try not to take those stories too seriously, any more than we did a couple of years ago when they said we were dead. Early on, we were discounted because I think the studios thought these tech guys are never going to figure out programming. They’re never going to figure out the creative part of the business. We largely have proved them wrong. And I think it would be crazy for us to think, Well, these entertainment companies are never going to figure out the tech.
I want to get your sense of what is happening in Hollywood right now, because the box office is down. Studios are laying off people. One of the most storied studios is on the block: Paramount. What is your feeling about what’s going on, if it isn’t Netflix’s victory? Because you have so fundamentally shifted what happens in Hollywood, and that’s had some knock-on effects. In periods of radical change in any industry, the legacy players generally have a challenge, which is they’re trying to protect their legacy businesses. We entered into a business in transition when we started mailing DVDs 25 years ago. We knew that physical media was not going to be the future. When I met Reed Hastings in 1999, he described the world we live in right now, which is almost all entertainment is going to come into the home on the internet. And he told me that at a time when literally no entertainment was coming into the home on the internet. And it really helped us navigate this transition from physical to digital, because we just didn’t spend any time trying to protect our DVD business. As it started to wane, we started to invest more and more in streaming. And we did that because we knew that that’s where the puck was going. At one point, our DVD business was driving all the profit of the business and a lot of the revenue, and we made a conscious decision to stop inviting the DVD employees to the company meeting. We were that rigid about where this thing was heading.
That’s harsh! It does sound harsh, but it got the whole company in the mind-set that we shouldn’t keep investing in the old business. It’s going to prevent us from investing in the new business, and the new business is going to get us to the next place.
In the job you have now, you are probably best positioned to shape what kind of culture people are consuming. What have you noticed about shifting tastes in America? We’re entering into a new era now where content and great stories can come from almost anywhere in the world. And they can very conveniently sit on the shelf — I’m doing air quotes right now — next to your favorite show, and you will discover an incredible story from Korea or an incredible story from Italy or incredible story from Spain that you would never otherwise have access to and maybe no awareness of before. The creator of “Squid Game,” he pitched that show as a movie for 10 years. He had almost completely given up on it, and our team in Korea had the foresight to advise him that this is a great story, but it’s a much bigger world. Have you ever thought about going out and trying to break down that world a little more and giving us a little more exposition? And he went off and wrote those scripts and made “Squid Game,” and it became the most-watched show in the history of Netflix around the world, including in the United States.
My husband likes horror, and his Netflix account looks very different from mine. In fact, we keep it very, very separate. His is “Lulu Don’t Touch,” and mine is “Lulu Rom-Com.” He doesn’t want me to muddy his horror algorithm. And that thing that used to be the connection where someone might tell you about something, now it’s managed in a way that can allow for these serendipitous things like the surprise of “Squid Game,” but often gives you more of what you already want. Has streaming been good for culture? Oh, I think it’s been great for culture. Not only great for culture; in a strange way, I think it’s been great to make the world a safer place. I think you’re exposed to cultures around the world in a way that makes you more understanding and empathetic. I don’t know if you’ve ever seen the movie “A Separation” from Iran? It’s a story of a couple getting divorced in Iran, and you realize when you watch it how much we have in common with each other.
Doesn’t it atomize you too? That I’m having my own unique experience myself, my choices, and that I get fed more of the same. And this idea of communal culture gets sort of pushed away? When you see something like “Baby Reindeer” — there was a time when something like “Baby Reindeer” would not even be seen in the United States. And if it did, it’d be on PBS once. It’s very, very big in the U.K., and in that way that Netflix does, it gets picked up in the algorithm and starts getting more and more presented, because when something gets that big in one country, it’s likely there’s a lot of audience for it outside of that country. And it’s been an enormous hit around the world.
Are international audiences pushing American audiences to broaden their horizons? That’s an interesting feedback loop. Yeah. What it’s pushing is: You don’t have to adapt your storytelling to America to work. If your movie, if your film works, if your TV series works in the home country, it’s got to be very authentic. And I think what international audiences pick up on is that authenticity. When you try to engineer something to travel, it really appeals to no one. I can’t think of anything that we’ve done that has been engineered to travel that actually did travel.
I’m thinking of Hollywood studios trying to make global hits. Something that will play in China, that will play in the United States, that will be popular in Argentina — I think that globalization of American film has disconnected American film from audiences. The love affair with film is lessened because of it.
There’s been a lot of discussion about what’s been dubbed “folding-your-laundry shows” — something that isn’t difficult to watch. It’s light, it’s fun, it’s not expensive to make. Netflix has a lot of examples: “Selling Sunset,” “Ginny & Georgia,” “Alone,” the survivalist show. Do you feel as if you’ve cornered the market on that? And is that a title that you want to own? Look, if there’s one quote that I could take back, it would have been in 2012, I said we’re going to become HBO before HBO could become us. At that time, HBO was the gold standard of original programming. What I should have said back then is, We want to be HBO and CBS and BBC and all those different networks around the world that entertain people, and not narrow it to just HBO. Prestige elite programming plays a very important role in culture. But it’s very small. It’s a boutique business. And we’re currently programming for about 650 million people around the world. We have to have a very broad variety of things that people watch and love. So we take a consumer view of quality. The people who love “Ginny & Georgia” will tell you, “Ginny & Georgia” is great.
I want to ask you about the movie side of things. You have a new head of film, Dan Lin, and that suggests to me that you’re tweaking strategy. Whenever somebody new comes in, they have an idea of what they want to do differently, and they have a different charge. A criticism of Netflix from some corners is that you make too much stuff that isn’t as good as it could be, specifically in movies. Are you trying to make better movies now? I don’t agree with the premise that quantity and quality are somehow in conflict with each other. We’ve had eight best-picture nominees in the last five years on Netflix [turns out, they’ve had nine]. Our movie programming has been great, but it’s just not all for you. And it’s not meant to be all for you.
I know, but you also have an “Irish Wish,” for example. And I was looking at your summer slate. The movies are all pretty midtier. “Irish Wish” is great! You love a rom-com — you didn’t like it?
I’m giving you a face. I saw the face! My point is, I am going by the numbers, how many people watch it. I mean, people watch the whole thing. People generally turn off things they don’t like in this on demand world.
Us rom-com lovers are very committed to watching things to the bitter end. [Laughs.] But again, I think that “Irish Wish” is at the high end of the Hallmark scale. And not at the kind of midtier of the Fox Searchlight scale. [Fox Searchlight is now just Searchlight.]
It wasn’t always certain that Netflix was going to be where it is now. In 2022, your stock plunged 70 percent after you lost subscribers for the first time since 2011. As a leader, what do you do when something like that happens? On any given day, we can lose or gain 200,000 subscribers, which is what that was, which was the first time we went negative. We went negative by 200,000 subscribers. This is probably the benefit of being around for a long time. We had times that were much tougher than that in terms of where we were heading with the business in the earliest days, before we were a public company even.
Well, what you did was, you threw out some of the company’s longstanding core principles, chief among them, not having advertisers. You introduced an ad-supported subscription tier. Did that feel like a real turn, betraying the identity of the company? It really wasn’t that we were “core principles” against advertising, it’s just that no advertising was our counterposition to television, the way that no late fees was our counterposition to video stores in our DVD days. What don’t people like about TV? Watching the ads and waiting a week for the next episode. We realized though, in this world of unlimited choice, what we didn’t do is give a choice to people who didn’t mind advertising at all and wanted a lower price. So for us, we thought that it was actually market-expanding to give more choice to folks if they wanted a lower price and they didn’t mind ads.
I want to ask you a little bit more about you as a leader. In 2020, you supported Black Lives Matter. During the invasion of Ukraine, you pulled Netflix out of Russia. It seems, though, that corporate activism is on its way out. I’m wondering how you’re thinking about that? When you think about diversity, diversity should be all things, including diversity of thought, which makes political activism of companies very difficult, because people have different opinions and different ideas and different thoughts, and you’re representing a lot of different constituencies. So I think companies should be very, very careful about how they insert themselves into these discussions. Sometimes when it’s just a matter of pretty simple, pure black and white, right and wrong — I think pulling out of Russia was a much clearer decision above anything we’ve ever done. It’s impossible to do business in Russia without being in business with that government. So for me, that was kind of a no-brainer decision. I didn’t view it as political. I viewed it as quite impractical to do anything but.
You’ve seen other companies in Hollywood — Disney, among others — and we’re seeing Google now, crack down on activism within their company. You say it’s a difficult balancing act. As a company that tries to be all things to all people, how do you navigate that? People have very different sensibilities about the world. I think that it’s one of those things where it’s very hard to say that our view would represent the views of all of our members and all of our employees. I think that would be a very high bar to clear, but that is the bar I would like it to clear. And by the way, I don’t know why that happened over the last couple of years where people looked to corporate leaders to do those things. They didn’t used to.
Do you see Netflix now as middle-aged? Middle-aged might be too old.
Sorry about that. Speaking for myself here. If I’m going to live to 120, I’m middle-aged. But I think the business is maturing, of course. And I think it’s taking on different characteristics.
So who is your competitor now? We compete for screen time. Social media, including YouTube, other streaming apps, gaming.
YouTube is actually bigger than you. It’s mostly free. Free is superpopular.
Free is superpopular. And you’re not free. So how do you compete with free? You’ve got to be worth paying for all the time. Be better all the time, at the programming, at the choosing of it, at driving the conversation around the world of it, which drives the kind of must-seen-ness.
One thing that YouTube has had for a while that you’re just starting to break into is live TV. Earlier this year, WWE announced it was taking “Raw,” the weekly live pro-wrestling show, to Netflix. You’ve just had live roasts, comedy specials. What is that doing for you? It’s really incredible, the conversation that gets driven around the world around a big live event. You know, in a world of on demand and total control, the novelty of a big live event, if it’s a Super Bowl or the Tom Brady roast, is that people get very excited that they’re all watching it at the same time. And what we saw with the Tom Brady roast was it was driving so much conversation around the world that the audience kept coming back. That is saying, well, there’s some real value in people gathering around the TV at the same time.
It’s making me laugh a little because you’re like reinventing the live special from network television. Yeah, live has been around for a long time, it turns out. We started that way as you’ll recall. I remember, as a kid, when “Roots” was on, every night the streets were empty.
Looking ahead, what are you most worried about? Mostly I worry about internal execution. It’s a very different company with 270 million subscribers around the world than it was when I joined with 175,000 subscribers getting DVDs in the U.S. So how you evolve the company, how you don’t get too nostalgic, how you don’t be too romantic about the past. Movies and games and television and stand-up comedy — all these things are real art forms. Otherwise it’s just killing an hour, and then I’d be very worried about TikTok.
I called Sarandos back a few days later to keep talking.
I’m wondering if you had any thoughts from our previous conversation. The thing that stuck with me most was our discussion about film, because in so many ways it captures everything we’re trying to do. Our discussion about “Irish Wish” is a great example of how hard it is, because we all have these great contradictions even inside of ourselves. I love “The Crown,” and I love “Is It Cake?” And I love them both equally, which doesn’t make any sense! When I think about that and think about, What are we trying to do? We’re trying to make movies that are great. We define quality from the perspective of the audience. So if the audience loves the movie, it’s great. That’s quality. “Irish Wish” maybe didn’t scratch the itch for you, but 65 million people watched that movie. It’s an enormous hit, and people love it. Critics and reviews — it’s a great thing. We want to please everybody. But sometimes the movies that we make are not made for critics. But for the audience that loves it, they love it.
Well, this dovetails very nicely with what I was thinking about. When we spoke, I was sort of pressing you on this question of whether your strategy — everything for everyone — affects the quality of your programming. And you argued, as you just argued, that you can have quality and quantity. And I came away from that thinking you’ve made a really good case. So it left me wondering: Discernment is part of any entertainment business. So what’s not right for Netflix? Great question. I don’t think that there’s a clean answer because the best version of something may work really well for Netflix but just hasn’t worked to date. There’s some obvious ones, like we don’t do breaking news and that kind of thing, because I think there’s a lot of other outlets for it. People aren’t looking to us for that.
I guess I’m thinking of “Barbie” and “Oppenheimer.” Are there things that just don’t feel like they’re in your wheelhouse right now? Both of those movies would be great for Netflix. They definitely would have enjoyed just as big an audience on Netflix. And so I don’t think there’s any reason to believe that certain kinds of movies do or don’t work. There’s no reason to believe that the movie itself is better in any size of screen for all people. My son’s an editor. He is 28 years old, and he watched “Lawrence of Arabia” on his phone.
Oh, no. But it is just an interesting thing. At every new development of technology, there’s wins for the audience.
I’d love to know from your vantage point how you think about the possible creative trade-offs and consequences of using A.I. I think that A.I. is a natural kind of advancement of things that are happening in the creative space today, anyway. Volume stages did not displace on-location shooting. Writers, directors, editors will use A.I. as a tool to do their jobs better and to do things more efficiently and more effectively. And in the best case, to put things onscreen that would be impossible to do. Think about this gigantic leap from hand-drawn animation to computer-generated animation, and look how many more people animation employs today than it used to. Remember how everybody fought home video? For several decades, the studios wouldn’t license movies to television. So every advancement in technology in entertainment has been fought and then ultimately has turned out to grow the business. I don’t know that this would be any different.
I guess the difference might be that all those things were tools that were used to open up the creative space. Whereas what a lot of people feel is that A.I. might actually supplant the creators. I have more faith in humans than that. I really do. I don’t believe that an A.I. program is going to write a better screenplay than a great writer, or is going to replace a great performance, or that we won’t be able to tell the difference. A.I. is not going to take your job. The person who uses A.I. well might take your job.
This interview has been edited and condensed from two conversations. Listen to and follow “The Interview” on Apple Podcasts, Spotify, YouTube, Amazon Music or the New York Times Audio app.
Director of photography (video): Aaron Katter
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