Netflix chief content officer Ted Sarandos spoke diplomatically to a NATPE aud full of traditional TV execs on what role the company’s distribution service would play in the future of the industry.
“There are some things that are quite popular — ‘American Idol’ would be very expensive to license, but we really don’t think anyone would watch it on our service the way they watch heavily serialized scripted content,” he said.
Serialization, according to Sarandos, is key to the streaming side of Netflix’s business model as the service approaches 20 million users. He also shot down rumors that Netflix was looking for more ways to get into the business of streaming network TV shows the day after they air, like Hulu, though he did mention the company’s next-day streaming deal with NBC’s “Saturday Night Live.”
“Our business is not about next-day viewership,” Sarandos said. “There are plenty of places where you can watch an episode the next day, and most of them are free. Our business model is about ‘It’s raining and I’m going to watch six hours of my favorite show.’ ”
He described Netflix’s Internet vid competition Hulu as “a noble effort” but said that as a business model, the reliance on ad revenue created more uncertainty than Netflix’s more straightforward distrib deals. “It’s a recessive model,” he said. “They say, ‘If we sell the content and market it the right way, we’ll give you half the money. ‘We say, ‘We’ll write you a check.’ ”
Sarandos said Netflix still wants to land deals with HBO and CBS.