Sarandos: exhibition “might kill movies”

Delivering the Saturday keynote at the ninth annual FIND Forum in Hollywood, Sarandos illustrated how sensitivity to viewer demand has enabled Netflix to boom and urged others to follow suit.

In an address that trumpeted the company’s evolution from a disruptive DVD service into a streaming giant that delivers 5bn hours of film and TV a year to 40m subscribers in 40 countries, the executive confirmed that Netflix may enter original feature production, as it has done in TV.

“The studios are always trying to innovate,” Sarandos told attendees at the DGA Theater, citing the divisive notion of premium VOD as an example.

“The reason why we may enter [feature production] and release some big movies is I am concerned that theatre owners are trying to stifle innovation… they might kill movies.”

Sarandos did not elaborate on the type of feature production that Netflix might already be considering, but repeated frequently the mantra, “Give the people what they want.”

The chief content officer also reiterated the familiar sentiment that every innovation that was initially regarded as harmful to the film industry has grown the industry.

“Why not premiere movies on Netflix at the same time as they are premiering in theatres? Not just little movies – why not big movies?

“I don’t understand spending tens of millions on advertising on people who cannot see [a theatrical title] for several months [because they may not have easy access to cinemas]. They will probably forget [when it comes out on other platforms.]”

The chief content officer contrasted the company’s current status as renowned pioneer with the gloomier landscape two years ago amid rumours the company would split in two.

At that time a number of customers left after a price hike when Netflix split subscription tiers covering DVD and streaming. CEO Reed Hastings later apologised for the move.

“We kept at it,” Sarandos said, “and bet a long time ago that [streaming] was where the customers were going.”

Sarandos explained how just as Netflix had championed independent cinema when it first arrived in Hollywood because that was a relatively accessible entry point, so it cut its first streaming deals with independent filmmakers. These days the company routinely pays tens of millions of dollars in licensing fees for multiple studio films.

Eight years ago, he said, Netflix “self-identified as a movie company” and TV was viewed as an adjunct to film programming. The TV side of the model has since evolved and now accounts for approximately 70% of the 5bn hours of viewed content on the platform.

“This is the golden age of TV,” Sarandos said. “Writers and directors are doing some of their best work.”

In some cases films, he said, had become this “big, cold spectacle that have to be sold around the world in order to recoup big marketing and production budgets… [and] are still being released in the same way they were years ago.

“These antiquated windows are probably driving global piracy more so than BitTorrent [and similar file sharing platforms].” He added: “TV is also driving a ton of that piracy… because the internet is this enormous, unfragmented platform. What we’re trying to do is jam these windows and get as close as we can to the network premiere.”

Netflix’s original TV content business came in for plenty of attention in the address. Sarandos cited the trailblazing nature of House Of Cards, noting how it was made under a direct-to-season arrangement and this year became the first show not aired on a network to win an Emmy.

NBC and Fox have since announced direct-to-season shows, however Sarandos said the lack of a pilot places the onus on content producers to bring a compelling package to the table.

In the case of House Of Cards several scripts were complete and director David Fincher and lead actors Kevin Spacey and Robin Wright were on board before the greenlight came for 26 episodes.

Sarandos said shooting was about to wrap on the final episode of the second season and did not discount the possibility that there would be more seasons in the years ahead.