Read this: The Story of Netflix with Ted Sarandos
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BBC sounds music radio podcast the media show from BBC Radio 4 we've just the one yesterday, but it's a big one that surround us is possibly the most influential figure in film and television because he is the chief content officer at Netflix and that makes him the man in charge of the reported 15 billion dollars that Netflix will spend on new content this year alone if you're not a subscriber to Netflix and most of us aren't you a felt the effects of that huge spending power Netflix of demand for new shows has driven up the cost of making TV drama in the UK you might even have seen your favourite show disappear from a traditional channel to become a Netflix exclusive.
We're going to be a heater battery went.
It's around us join Netflix in 2000 the company was very different it was a video rental service back together with Netflix's cofoundit Reed Hastings around us is credited with devising a strategy that has transformed the company into a streaming giant with over 150 million subscribers around the world and counting on a visit to the UK earlier this month that surround us came by the media show I wanted to get a sense of where Netflix is heading and what that means for British broadcasters, but I started by asking about his family history because there's nothing in it that says future Media Mogul my grandfather was Alex horrendous came from Samos Greece as a young man.
He left home and thinking church of 40 that was a real job in America which was to be a trial cook.
That is used to read cowboy novels all the time and he started that was going to be a new array, Java
How to do in America what to New York and became a clock not a true that a kitchen from their 8 kids and made one vacation in his lifetime which was to go to Arizona to see a radio and talked about it till the day I died in the Day died out of his kids and Watson tribute to him move to Arizona so I was raised in Phoenix in bitten Elena for 20 years and what is I'm stupid repetitive lyrics father was the electrician homemade Mothers Day on mother 5 kids very young parents, so we had a kind of behaviour of chaotic my escaping my sense of Peace was television.
Did you want a huge amount of the era of American media the year of American film and TV that you invited as a kid I think the best time if I think about the television.
Alan during the day shows are there from the from the 70s that be beyond the family is the match this shows that kind of have really been enjoying the culture even today, but it was interesting about that time and where was interesting for me was that I was very aware of things that happened decade with the Decades before so I'm like I think young people today.
Are you know very little about December television of the 70s in the 80s? Am I knew everything about TV for the 50s and 60s because it was that I was never much of a sleepover.
So I would stay up late in watch dino the the Dick Van Dyke show the Ender Griffith show the Jack Benny show the burnt Burns and Allen and I've seen all does every episode of every one of those shows through the years.
I love Lucy and I did enjoy Belper shortest binge-watch was in the 1970s with a normal airshow Mary Hartman Mary Hartman and growing up and Felix the channel that airs.
Show it was it aired everyday like a soap opera during the day so on Sunday
Hi there, we are all 5 episodes starting at 10:30 and I would stay up late and said another another great for kids and said before but I would watch episode 05 an MOT funny.
Is that shows super memorable to me? I've only seen it once and I watch that every one of those episodes, but I spoke to B&Q in them and they're not that long ago were talking about the show and I was quoting back lines of the show to him and he said how many times have you seen that Charlotte is just that one student to Glendale Community College in Phoenix Arizona I was wrong.
I think when I was about 12.
I probably getting influenced by television probably burn from the grand.
I wish I was going to be a journalist and that's what I have to do things.
I just a wart on the High School newspaper.
What on the college newspaper and spent all my academic time and on the newspapers instead of getting good grades and I
Realised about after 2 years of community college that I was a horrible rider and I will probably not going to be a professional journalist and I really don't have a plan b at the time in my part-time job during that period was working a video store and I am one of taking down this my full-time job.
I figured out.
What was going to do next so did you end up working because you were Fanatic or just because some of some ships guide you fancy global buffet meal.
It was a stroke of timing that the second video store in the state of Arizona opened up in my neighborhood feel just a few blocks from my house and my parents imagine there are young young people not that responsible with money so we sometimes would not have electricity in that have water not as that of the phone, but we always had whatever that thing was that we had a little dish to get HBO where the VCR and which of the time I say like this is there were big machines back then and I made no sense.
They would have this luxury item, but this is your family.
Store open I would be able to roam into that store in and run walk the shelves and look at the boxes and talk to the other about films in the new pin to attend in the downtown.
Did you get through with 900 filters? I definitely do it working when you're working in a video store the beauty of their stores that it's empty all day.
So there's a video to do all the visitor last 2 hours at night.
So you can watch everything and I did I watched probably not 900 film The Story of the dry started and I feel like I've must have seen every one of them.
I would you say that your job then was to have the knowledge and there a set of the data to be able to say to people to customers if you like that your love this which is cut Netflix do near can't be bothered to that because of my having been able to see everything I was able to make kind of natural connections in the patterns that I didn't know the time what it was but when people come back and say you know I'm am the returns of this I like this.
I hope you like that.
You're going to love this.
I was a very organic natural thing but now you record matic back on it and they will B&Q
The people waiting to check out in the waiting for me specifically they get asking her body, which would you suggest what they wanted to take you didn't realise that a more informed guess, but it did tell me a lot about what people really buy you that choice and and it felt very good to be the one that helped them find something that they lacked any for some people may from the favourite movie for the rest of their life from that suggestion.
You know Stacy recommendation.
See you guys up the chain of that company I work for a few different distribution companies.
Can you catch say this is late 80s going to the mid-90s.
Have you tried the distribution business that you're in there, because there's a lot of turmoil and at one point you had to go round country couldn't be without a job to make me redundant DiCaprio word for suppose the Blacklist the distributor that serviced of the Black Ops 3 stars and they played the videos in every store around the country around the world and we wind up and eventually blacklisted went to direct without the studios in Weir
Get a billion dollar business that became a609 our business overnight and how to adjust to the new to the new reality of losing the of your basically the black the bread-and-butter of the of the company and to spend about 2 years going from distribution centre distribution Zara laying off big steps of people and closing them down a most unfortunate about what happened when The Blackburn the Blockbuster stores, can I put the independent stores out of business a lot of a whole class of film just disappear from the culture in Meanwood they were being that I was going to be a journalist.
I would really like to newspapers Phoenix was a very small town diagram.
So in dependent film documentaries foreign language movies most it didn't exist in Phoenix Arizona when I was growing up one movie theatre are called The Bell yard.
Theatre the future Steven Spielberg excited so many of there movies there as well.
I would literally going to get on a city bus to write out there to see it documentary Odyssey a foreign language film other than that they didn't exist and then you walk into a video store in the studios in the early days didn't put the movies on home video so the shelves for only filled with those movies and then as soon as black Porsche Cayman they've movies filled up with multiple copies of the big heads and squeeze them off the shelves and you read back to where you started cotto it so the challenges of the physical distribution and that's probably the worst kind of distribution where to get in the car going to pick it up watch it bring it back this distribution is the guy who did is College project on how to make the most efficient distribution and worked out that we're doing it was agreed in the distribution of my clients who became a friend's name limits low.
I was working with read and the early days of Netflix when we're doing DVDs milling around and read this book and really brilliant matinee mean in terms of
Add engineer culture writing code industrial visionary, so I knew this was 1999 Mitch said you should meet at he knows all about home video distribution in as so one of my very first e-commerce transaction was the buying a ticket to go up to see read and we made a 99 he's only describe Netflix on what's exactly like it is right now without downloading and streaming acestream.
Didn't do not exist at the time but that the internet would be the vehicle that all filmed entertainment we get into the home and satellite in that cable which is the 1989 that was a very crazy idea how much I did think you was a little night when you're talking about it.
Is it a few times and have a cup of tea said know what time the know until yes again as his sense of Incredible clarity so many other the job I said I was actually had a driving.
I was running a retail chain at that time as this is after the distribution days and we're a413 international chain and we're talking.
And he said what age you can I come and do this and I said well I got these deals and I got this and I get bad this ourselves.
We need you and yes, they need me I don't need you in some Starbeck and some country to see if he's starving children and I said yeah.
I may be so severe that made me laugh and I said I want to be no worries.
I didn't know he was going to do something that would change things that as much as Netflix has but I knew you was going to do something amazing if you get free delivery on Netflix back, then was a DVDs by post service it revolutionized home movie rentals.
I'm not charging late fees and introducing the concept of a monthly subscription Netflix movies.
Million subscribers about putting Blockbuster out of business with only a stepping stone to Netflix's ultimate target the traditional cable TV networks HBO was kind of a gold standard at that time the program.
It was actually kind of really would would distinguish them from the rest of the Field of separated them from television so we talked about it very often as it's been the kind of online version of that we had this DVD Bridge to get through so could you do a Sopranos but only on DVD and only on Netflix the scale of that I wouldn't work in 2007 Netflix launched an online streaming service initially it was filled with films and shows licence from broadcasts including the BBC that surround us calculated live Netflix Westerby traditional TV channels, it would need to start producing its own shows inspiration from an unlikely source.
1990 BBC political drama House of Cards get our way over because of that video stored the most glittering rain must come to an end in 2011 surround us learn that a Hollywood studio was planning a remake of House of Cards it was being shopped around to us cable networks surround us Campbell that the show could be a hit for Netflix VR with the networks of the right and all the two series upfront something almost unheard of in the industry.
If you was if there ever was a project that you could just add water this was going to be at David Fincher Direct Robin Wright Kevin Spacey but will a man brought three amazing scripts that were basically almost sure about the time and if you ever NFL that we're going to get into original programming at some point then let's do this in a way that we can look back and say maybe didn't try hard enough maybe wasn't big enough.
Maybe it was the wrong shot and this was a clear shot to try this and if we were and I tell you something about the cultural Netflix I told read about the day after we did remember six months earlier.
We just told Wall Street that we would never do this so there is 20 20 20 said busy.
Why would you do that? I just said ok for you for wrong in the show doesn't work.
We will have terribly overpaid for One Show
And if it's alright then it could fundamentally changed our business and he said all that so that's a good risk reward, so there was a good trader from the very beginning Netflix is made data analysis the core of its business and around us is huge bid on House of Cards a reported 100 million dollars for those first two series was made in part because of what the data was telling him people's dream the British original on Netflix the data indicated were also fans of Kevin Spacey and David Fincher movies so combine all three and how can it not be a success critics suggest that boasts about algorithms might be more marketing gimmick than real science others argue that the use of algorithms to inform commissioning decisions needs Netflix doesn't take risk or new Talent unless the data indicate that should all of which is leading to the homogenization of television.
You have got extraordinary troves of data now.
Have you found a human intuition is of taking a bit of a backup and data is taken a bit of a forest.
No commission fee if anything the opposite which is a big the Instinct of a company Bourne intack would be too.
You know the data Drive everything and so when you bring in new people.
They're concerned all the time that may be the day that is the thing that you have to be now.
You have to pay to justify her yet to figure out in the truth of it.
Is that you mean intuition the one that can recognise that this is a great story in this is a great storyteller.
This is a great world.
There's no data that can tell you that there's no data that could tell you definitively to cast this person is said that person you can look at it and say this person does well and Netflix but you say that's a collection of a lot of things they've done in the past.
They have nothing to do with each other but the data was super helpful for price is the help us make more informed choices around how much to invest in something that this could be very big and here is a data to increase your confidence as I can be very big or the other way round.
2 investment basically what I will say goodnight House of Cards as Unix example of their meaning that it was a very expensive show as you mentioned earlier, but the ending was not a lot of hip roof with the exception of maybe west wing of shows that were selling book in the washing in politics.
They were successful.
Yeah, so this was basically by taking that the data pool and saying who are the people who know how many people love David Fincher movies and who is Kevin Spacey movies and who their favourite and who loves political thrillers and taking all those data pools and say if the show is well-executed.
Cheers the audience for that's bigger than you would think and think but so basically it enables you do the fire conventional Wisdom by giving you a little bit more confidence in decision to try some other things that other people have determined wouldn't work well, so would you distinguish the culture and this is ambition Netflix from other tech companies in the west coast of the joy of watching goes first in the Tech come second.
Basically using tech to create joy using the technique to help in the distribution point you know mean like the the worst part watching a movie was the best part of going to a video store the worst part was going back driving back and forth so let's take away all the every other barriers to get in the practice GCSE exam release you in figure 3 shows is that what you think about that? Is it because you've not wanted to give an indication to competitors as to what's popular all because you generally don't know that few things are particularly useful biological use for the way that they reported to the meaning meaning of the driver of it is most suited for advertising sales soulive live + 7 days left for 30 days does the 11th measurement said we don't have advertising so the value.
We do have that you and when people watch not in the moment, but in some time.
So what people watching the first month give us does give us some indication the personal.
They join a wider joint so some people may I join to watch a movie of watches, but TV series that we have and that helps us understand the value that shall we will increasingly give out that information more frequently work first or produces then ultimately to our members and to the press are because I do think there is some real value in having a part of being part of the above the global conversation about something me and when you coming to NetFlix in strategy of making original and exclusive content is now highly advanced as well as globally popular dramas like narcos and Stranger Things introducing foreign language shows for individual countries is moved into factual programming last month in partnership with the World Wildlife Fund Netflix released our planet reported to be one of the most expensive natural history shows ever made.
Only on Netflix the poaching of Sir David Attenborough had snow in the BBC wondering where the Netflix now pose an existential threat to the licence fee BBC like is it to do for Oldbury a competitor or is it a supply but another got some point as I really want to make sure that they know that we're a good partner for them were good partner for them as a licensed of the garden will get partner as a co-producer wearing your right now in production and Dracula which is a very big project.
We did batik bodyguard most recently in Watership Down who became is a coal production partner helps raise the budget of this project.
So they can make it even more ambitious projects, but also want to make sure we're good partner when we compete and they're working fine.
They were always competing at a fairly with the Uno with it with local local broadcasters put any good.
Things are going to ask but also didn't to know that one deal doesn't change the dynamic for therefore everything else CC because Attenborough who is Assad BBC 90s dance to Fields where was making a stove a big segway to Netflix that sort of thing that's is that as a strategic Move by which you want to do with encroach and other people's tariff.
Is it is it way of showing your the game that no one is off limits.
That's what I mean about be a good partner when your competitor he wouldn't do things just because you can so I mean there are certain things are more valuable to us around the world and they will be to the BBC so if we were able to add 12 bed for something it's because it has outside by U2 has only and in that case we were able to do was because of the unique connection with the World Wildlife Fund made it very difficult project charitable things correct correct, so we're so we are uniquely positioned to do it and because of any remember that in the first couple of weeks is show 25m people.
Watching a planet Dino and integrate a way out of the gate.
So it's incredibly valuable programming for us now.
There's this whole thing that happens with a supplier and a competitor overtime you can very wary of each other and I would say that what about motivations to get into original programming was our core belief that our suppliers weren't always going to want to sell its programming and if they got suppliers are always wondering what I said.
I want to buy a program any more events that becomes a reality but the truth of it is as if there was a way that we can continue to work together.
I think the BBC's one of the best models for in the world for us being a co-production partner or licensor and sometimes a competitor.
What's the weather BBC or the one British production that you seem that you'd most like to have that you don't currently have the Killing you've had a good even say greater is a Great Shelford utbc nanotubes.
Have I like it like a ladder.
Could you see that in the future of 30?
Kind of like that is why I think you're the BBC is your people that often talk about HBO and the golden age of television at the BBC is right there an hour's husband day in and day out.
There's not giving me some people BBC put it about that.
There is a danger that if Film and Television around the world becomes dominated by a few companies based on the west coast of America international look kind of homogenization you get a kind of I'm blanket worldview which is filtered really through California mindset you anytime for that arguing.
No, I mean but mostly because they are shows are being produced by local storytellers all over the world.
I'm hearing ear in the UK are these films are television series conditions does decisions are made in an office in London not just a few blocks from here actually and and those that local production in local crew logos local local riding local produce local producers and increasing the you know more and more and infrastructure being built out for us right here in the UK had two producers for the very shows and do you think that?
Being invested in local Communities and Local embedded with local teams will eventually make its way into Sports Direct I don't think so at Anatomy never isobag sports and attracted to you have until Amazon getting into in a big way watersports.
Not straight cueing readers a huge opportunity, so it's not it's not the next best opportunity so I think about this is the way the answer the question that went sportive sports.
I look at it as and when it is the next best way to invest 10 billion hours because I think that's it cost about of doing a right and doing it with you know in a way that consumers care about look at that and save and we maxed out what we can do in the world of television and film and documentary and stand-up comedy and all those things and we get to that number you say what may be the next best use is to do a big League deal but until then I don't think Graham of the crazy one year that you have to be a 10 billion bit key is it not as big as this is a sports right to censor.
Going to do it you need it with a big signature event rather than you can't have incrementally do it try bit here see if it catched on tribe it here so we can maybe wear pattern matching is how we do with House of Cards to get it in a big way, and I think it's important get in a big way.
It is tell the market that you're really there and that's a discount news main uses of perishable thing out of me what you want to do stuff that is imperishable correct that Sylvester big driver and also they think they're a great local news organizations who understand those markets much better and understand the news Cycles much better and for us to to your point earlier about that.
That's why you don't want to be the out of Towner be responsible for local news little bit about the future of television you look at what Netflix is the last five years eve mass of the increase the quality production is hyperinflation the industry.
You've got a direct consumer relationship very very sophisticated technology if you look forward to next 5 or 10 years.
How is TV gonna change it if you were back 5-years I'd better.
Predictors a lot of wrong thing about themself very difficult to get a predictor consumer.
I have these will change I think that the some interesting hints about things the way that people really have loved to engage in the Iraq of storytelling with bandersnatch.
Inu Vs wild now but they changed her to all storytelling become interactive.
I don't think so, I think it'll be an interesting evolution of you, but won't go back to when people say Avatar 3D how many of them.
Oh my god did movies will never be the same for most of the same and I think this is going to be something similar that are gives a lot more option to consumers.
How they want to consume when they want to consume and the cat and the benefit of that is the things that will get made will be even more diverse more choices.
I think it'd be interesting to see how international programming plays a role in people's lives today.
That doesn't around the world with very few exceptions.
You know the reason why the church Great British programming.
Is it this market with plenty big da producer itself, so there's
Local programming that people love that's true in Japan that's true in Korea is true in India Australia knighted States but almost everywhere else in the world is very very much are watching it a program from everywhere else in the world and in the ability to do that.
I think is going could change the week.
Sorry to get all if you think is going to continue to eclipse schedule television I definitely so if you think about an organisation to take the BBC for instance which is this licence fee which still distributed huge amount through traditional TV linear schedules which has a swimming cap on its income and it's direct consumer off of the iPlayer is that you are restricted by regulation Netflix is a lot of things to do in which an organisation like the BBC is an able to do it at the moment and the moments of scenes be with you rather than with the old way District staff through linear channels as a problem for organisation isn't it? It's the couple in the company of public funding regulations.
Can I come together? So this way that you're able to?
Innovate outside of the regular verb of the regulatory system, but I do think like you're not even in that world the innovation that comes out of something like that the iPlayer was way ahead of its time and the way the people adapted to the way of the watch and other things has just a matter of how these programs are available relative to the business models with producers and their ideas how to make sure these platforms in his networks or remain relevant in the way to do that is to give give the consumers are they want first and then figure out the business model after we're going the other way around a thing comes up with a very frustrating experience that sounds like you very very much and you feel time.
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