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Ted Sarandos: Disney-Netflix Streaming Deal a 'Game Changer'

5 Dec, 2012 By: Erik Gruenwedel

Ted Sarandos

Netflix’s chief content officer, Ted Sarandos, said the just-announced streaming agreement with The Walt Disney Co. for content in the pay-TV window represents a “game changer” in home entertainment. He said the deal would likely include Stars Wars movies when the Disney-Lucasfilm acquisition is finalized.

In a Dec. 5 discussion with veteran studio executive and moderator Harvey Weinstein at the UBS Global Media and Communications Conference in New York, Sarandos said the combination of Disney’s content with Netflix’s foray into original programming represents a “huge” step forward for the subscription video-on-demand pioneer.

Weinstein said that when Howard Stern went to Sirius Satellite Radio, it was a game changer in radio. He asked Sarandos if the same could be said with the Netflix deal. Sarandos said since Netflix has access to Disney’s catalog beginning next year and, with its original programming slate launching next year ("Hemlock Grove," "House of Cards," "Arrested Development" and the second season of "Lilyhammer"), it is a legitimate pay-TV competitor to HBO, Showtime, Starz and AMC.

“It definitely changes the landscape,” he said. "Netflix is a major pay-TV solution for the studios."

Sarandos called Disney a “near perfect” media company with its multiple brands (Marvel, Pixar and Lucasfilm) and TV networks (ABC and ESPN).

“It’s really amazing,” he said.

When asked about launching all 13 episodes of "Cards" next February, and how that underscores the demands of an evolving younger audience while separating from traditional linear TV, Sarandos said Netflix's goal is to move away from making viewers wait a week to see the next installment of episodic programming. 

"You get the most [user] satisfaction by [them] having control of access," he said. "Get viewers engaged differently than you can on television."

He envisions Netflix eventually producing its own TV shows (it now works through third parties such as Lionsgate and others), which allows for greater financial reward and greater risk. Sarandos said for Netflix to get into the original content space it had to share the risk and reward.

Sarandos reiterated that Netflix's original programming will not be judged by overnight ratings, but rather subscriber retention and growth. He said more people will watch an episode of "Breaking Bad" on Netflix over time than on one night on AMC Network.

Sarandos said Netflix’s push to acquire exclusive rights to content justifies the higher license fees and explains in part why the service elected not to pay Epix for sole access to its movies. He said Epix’s brand of exclusivity was not very exclusive, as it had the right to broadcast the content on its pay-TV platform at the same time.

Netflix now shares access to Epix content with Amazon Prime Instant Video.

About the Author: Erik Gruenwedel

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