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Netflixs Ted Sarandos Weighs In On Streaming Wars, Agency Production, Big Tech Breakups, M&A Outlook

Netflix content chief Ted Sarandos, in a lengthy sit-down with Liberty Global CEO Mike Fries, covered a host of topics, including talent agencies producing content, Disneys streaming outlook and Netflixs M&A future.

The pair spoke onstage Friday night at SeriesFest in Denver, an emerging TV-focused festival. The hour-and-10-minute discussion, which included an unusually comprehensive audience Q&A, found both executives opening up a bit more than at typical conference sessions. The event was not streamed or covered by the usual cross-section of Hollywood press and Wall Street observers who closely track every media business utterance.

After hitting on a range of topics, from Sarandos own origin story (which included living in Denver for five years in the 1990s) to data-mining, advertising and live sports, Fries ended the session with a “lightning round.” Calling it an “exercise” that he dubbed “buy, hold or sell,” he explained, “Buy means you believe in it; its a winner, hold means its too soon to tell, Im waiting to see; sell means its not a winner.” The first “buy/hold/sell” question fired at Sarandos: Disney+. (Sensing intrigue, the audience of about 150 let out a murmur and a few chortles.)

“Id say its a hold,” Sarandos replied. “But Ill say theyre remarkable storytellers. [Disney CEO Bob Iger] has put together an amazing business. Theyre in new space, but theyve been in new spaces a lot of times.” Fries, who leads Europes No. 1 cable operator, volunteered his own eyebrow-raising take on Disneys streaming efforts. “You do realize, if they hit their wildest expectations with their forecasts, its 11% of their revenue,” he said. “Its a hedge.”

Next lighting-round topic: major talent agencies, which are locked in a battle with the Writers Guild and others in Hollywood over their mounting production activity. “The further they get away from their core, the more difficult it is, I think,” Sarandos said, without designating a “buy/hold/sell” rating. “Their core is, talent really does need help. They need, how do you find projects, how do you – whos looking out for you all the time? But if theyre going to be another producer of content, I dont know that theyre going to be a great one.”

As to Netflixs future in a dynamic M&A environment of late, Fries asked if Sarandos thinks the streaming giant will still be an independent company in five years. “I would bet on that,” the exec replied.

Fries asked Sarandos about the impending competition from not only Disney+ but also new services from Apple, NBCUniversal and WarnerMedia launching during the next year.

“The thing thats interesting about all these upcoming services as well as the services that are in the market today is that mostly they have none of the same programming,” Sarandos said. “Nothing thats on Disney+ is going to be on Netflix and nothing thats on Netflix is going to be on the [Comcast and WarnerMedia services]. Theyre going to be very unique.” For that reason, despite research indicating resistance by consumers to the idea of paying for more than three services, Sarandos added, “I think its very likely that theyll add things” in order access content they want.

Fries sardonically asked Sarandos about “your friends in Silicon Valley,” Google and Facebook. He wondered if he saw the companies being forced by regulators to break up, as some politicians and activists have been demanding. “I could not begin to predict any of that,” Sarandos replied. “I know that I feel good that were not in any of those businesses that draw that kind of fire. Another great reason not to sell advertising. We dont collect your data. I dont know how old you are when you join Netflix. I dont know if youre black or white. We know your credit card, but thats just for payment and all that stuff is anonymized.”

Also on the data theme, Sarandos reaffirmed the company has no plans to incorporate advertising (a subject of mounting speculation) or bid on live sports. Both are “not core to the proposition” of Netflix, which is ad-free and on-demand, he added. While the price most Netflix subscribers pay has risen steadily, from $8.99 a month five years ago to $12.99 today, Sarandos waved away any concerns of price sensitivity. “I honestly think about it not in terms of price but in terms of value,” he said. “So if people are getting the value for the dollar, they should track each other really closely.” Given the increase in quality programming in recent years, Netflix is “still pretty cheap,” he maintained.

Given the festival audience, which was full of independent producers and content creators, the pair of executives spent considerable time talking about Netflixs method of selecting shows to produce. Fries suggested that because the company doesnt report ratings or divulge much in the way of viewership information, the green-light process is trapped in a “black box,” which even industry heavyweights cant access. “Picking content and working with the creative community is a very human function,” Sarandos saRead More – Source