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Ted Sarandos is happy the twin Hollywood strikes are over — but the Netflix co-CEO claimed the streamer didn’t see significant “interruption” in its ability to launch original series and films.
“We are mostly just thrilled that the strikes are behind us. I’m really excited about that,” Sarandos said, speaking Monday at the UBS Global Media and Communications Conference in New York.
Sarandos, who was among the studio CEOs at the bargaining table for the contentious WGA and SAG-AFTRA negotiations, commented about the post-strike environment, “It’s one of those times when nobody says we have too much content.” He added, “Not that COVID was good for anybody, but it did give us muscle for delivering content in an uncertain time… We didn’t really have much interruption in our delivery to customers.”
In 2024, Netflix is gearing up to launch new seasons of “Bridgerton,” “Cobra Kai” and “Emily in Paris,” Sarandos said, while later this month the streamer is set to bow Zach Snyder’s first “Rebel Moon” film (which the exec called the filmmaker’s “Star Wars”) as well as Oscar contender “Maestro,” the Leonard Bernstein biopic from Bradley Cooper.
That said, during much of 2023, Netflix saw original productions delayed by the now-resolved WGA and SAG-AFTRA strikes. In October, the company told investors its cash content spending for the year will be about $1 billion lower than expected due to the strikes; that is helping Netflix boost free cash flow for full-year 2023 to about $6.5 billion (up from the prior forecast of $5 billion).
Overall, Netflix is still targeting a $17 billion content budget for 2024 on a cash basis, Sarandos said. “You’ve seen the steady march-up of our content budge [commensurate] with our growth,” he said. “We think the $17 billion level aligns with our growth.”
For Q4, Netflix forecast a net subscriber gain similar to the third quarter, when it added 8.76 million globally, to stand at 247.15 million as of Sept. 30. The industry-leading subscription video streamer projected year-end quarterly revenue of $8.7 billion (up 11%) and net income of $956 million (vs. $55 million a year prior).
“[S]treaming is a good business. It’s just a hard one,” Sarandos said.
Per the company’s third-quarter 2023 shareholder letter, Netflix — in addition to “creating movies and series that members will love” — is aiming to increase average revenue per subscriber through three initiatives: paid sharing (trying to convert password-sharers into paying customers), growing its ad-supported plans, and by adjusting the mix of pricing and plans (e.g., recent hikes on Basic and Premium tiers in some markets).
Regarding the paid sharing rollout, Sarandos said, “We’re completely satisfied with the pace of it.” Netflix needed to introduce it on a country-by-country basis, to adjust the terms of the password-sharing program based what would work best in individual markets. “It was good to take it slow. That’s why we didn’t do it one fell swoop,” he said.
Sarandos also took a swipe at rival streamers. As Netflix is adding content and “adjusting prices every little step of the way,” he said, “Our competitors seem to be reducing content and raising prices.”
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