The following is the transcript of the speech Netflix Chief Content Officer Ted Sarandos gave at last weekend's Film Independent Forum. You can check out the whole video here.
Good morning everybody, I’m going to speak hopefully briefly and then leave lots of time for questions but I’m really thrilled about being back at this conference. I did this many years ago now and as Maria mentioned I had a really long relationship with Film Independent both for this conference, with a project involved, for the film festival and I’m so proud of the association because the work that they do so helps add diversity of voice to the things we get to see on the screen which I think is really a noble thing.
But this year, zombies seem to be a real hot property, “World War Z” was a monster hit everywhere around the world, the biggest show on television right now is “The Walking Dead,” and so it is fitting these days just before Halloween that your keynote speakers is also back from the dead.
Just a couple of years ago Netflix announced that we were going to split the company in two and kind of over night went from being a media darling to being a media punching bag. Our stock dropped, some of our subscribers quit and it looked pretty bleak for this company that has been such the champion for independent cinema.
But that was the view from the outside. The view from the inside was that we just kept doing the things that we do. We focused our resources on the streaming business, pulled back some of the resources on the DVD by mail business like we felt we should. Both because we made our bed a long time ago that that’s where the consumer was heading and we are a company built on giving the consumer what they want. Innovating in the consumers’ behavior. But, here we are, two years later; the subs came back, the investors came back, the press came back, and things feel pretty good.
In fact, this quarter we surpassed 40 million subscribers in 41 countries and streamed 5 billion hours of movies and television shows around the world, so it’s a pretty good time. Today, in fact we are watched for more hours than any cable television network. That’s a pretty cool development.
Ahead of the Disney channel and Nick and ESPN and all those massive brands, right behind the TV networks you’ll find Netflix The other thing that we did was we entered, it feels like a long time ago now but just last February we entered into the original programming world and started launching our own original series and it was on February first of this year that we launched our first show which was “House of Cards."
Also we got to make a little TV history this year because “House of Cards” was the first show to win a Prime Time Emmy having never aired on a network or cable channel. Really blazing the path we think for all forms of new television.
But, I stand before you today at a conference that is primarily focused on film and going to talk a bit about TV because I think TV is where the audience is. It’s where the innovation is happening and it may be where the future of independent production is happening.
When we started streaming eight years ago it was a pretty exotic proposition for right’s holders. It wasn’t a physical media business, it wasn’t a theatrical business, and it wasn’t television broadcast so no one really quite knew how or what to sell to us. So we bounced around between the home video groups and the television groups and these really ill-conceived odd digital groups that were forming inside the networks studios that were trying to figure out how to sell to us.
The funny thing was these digital groups that do business with Netflix, they didn’t have any control over any of the content so they would have to go back to the home video group and the TV group and say, can you give us some stuff to sell to Netflix, and of course the home video group did not want to do anything that they thought might hurt DVD sales so they held on to everything and the television group did not want anything to hurt syndication so they held on to everything and it was really tough to navigate a business. And I think if we would have treated our DVD business with that kind of protectionist reverence we probably would have gone the same way as many of those digital sales groups have gone and just got integrated into something else.
We were so hungry for relevant content we did what the video stores did in the 80s when they were looking for stuff, they went to the indies and they were the first movies on video store shelves before the studios would put their good stuff on tape, were great indie films blazing the way. Because of our DVD business and our personalization and all of the ways we help make little known things known, Netflix had already became a indie sweetheart. Being able to be the champion of movies that would open quickly and disappear from single screens in New York and LA and make mainstream hits.
We kind of did it all; we struck deals with indie distributers to bring films to Netflix Streaming even before we were sure anybody would watch them. Because HBO did not want foreign language movies and documentaries, we were able to bring great movies like Susanne Bier’s first movie “Open Hearts,” Guillermo del Toro’s “Pan’s Labyrinth” and the Oscar nominated “La vie en rose” to Netflix’s streaming in windows about ten years before any of the other studio movies were hitting the site.
So, that was Bob Berney that was a great innovator for us early on. The same is true about Jeff Sackman at Think Film who brought us stuff like “Murderball” in a really early window and in 2005 “Born into Brothels” was the only place you can see it after it won the Academy Award was on Netflix so these were some of the early innovators of Netflix streaming were some of the great innovators of Independent film.
We also formed our own label back then called Red Envelope Entertainment. We acquired and produced documentaries and stand up comedies specials. We worked with Kirby Dick, Zach Galifinakis, Clint Eastwood, Joe Berlinger, really fantastic projects and the idea was we wanted to bring movies to streaming as quickly as they were coming to DVD. And really not being able to do that as an outsider, we decided to wedge ourselves in as an insider. We winded up doing some great projects like “Super High Me” a documentary with Doug Benson that is remarkably popular.
I think as kids discover pot they want to see “Super High Me” because it continues to live on and on and on.
We did Zach Galifinakis’s first comedy special “Live at The Purple Onion.” Jeff Garland directed Jeff Waters in a great performance film, “This Filthy World.” And even got a couple of Oscar nominations- wishful thinking – Emmy nominations for “The Music Never Ends” a doc about Tony Bennett and “Outrage” a doc we did with Kirby Dick.
Red Envelope Entertainment itself may have been an investment ahead of it’s time but it did serve the purpose of forcing innovation in distribution of film entertainment and for that we are quite proud and for the projects that are still around today and still show up in Showtime and DVD end even on HBO around when I least expect it. I see that Red Envelope Entertainment pop up again.