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Ted Sarandos’ Netflix streaming strategy: ‘Driving people to a theater is not our business.

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The ‘Glass Onion: A Knives Out Mystery’ cast with Netflix’s Ted Sarandos

Despite promising signs for post-pandemic box office Ted Sarandos has doubled down on Netflix’s film release strategy and declared, “Driving folks to a theatre is just not our business.

Late last year Netflix conceded it left money on the table with the one-week theatrical release of Rian Johnson’s Glass Onion: A Knives Out Mystery but insisted short releases promoted its films and drove viewership on the service.

Strong early 2023 box office supported by studios with streamer siblings and recent moves by Amazon Studios and Apple into theatrical releasing, combined with a restructure of Netflix’s film division to focus on fewer, better titles prompted one analyst to ask Sarandos during Tuesday’s first quarter earnings webcast whether he might revisit the strategy.

But the co-CEO rejected the notion. Sarandos said that he was “really happy” with the investment made in film. “There are many ways to create and collect the demand for a movie. The first window of new, big content, including feature films, drives value for our members and drives value through the business. Having big, new desirable content, including feature films in the first window, drives value for our members and drives value through the business.”

He continued, “So no major changes in play except for trying to continue to improve the films for our members, and make a big splash with films that are loved and watched.”

Netflix CFO Spence Neumann, who earlier in the webcast said he expected annual content spend in 2024 to be around $17bn in line with this year, said: “We believe in the advantage we have… of delivering that value to our members. Because of our reach and our scale to have over 230m paying members at our average revenue per member it affords the opportunity to invest in these big movies, bring them to our members as one other piece of must-have content for our member.”

Sarandos continued, “It’s tempting to make the comparison between the services but the other services don’t have that scale as [Neumann] pointed out; they don’t have the revenue base or the viewer base to support with the single window the way we can support even big budget films with a single window on Netflix.”

The co-CEO added that the film division under Scott Stuber was “doing great, they really are building some great films”. He added that Netflix’s recent Oscar winners All Quiet On The Western Front (which won four awards including best international feature film) and Guillermo del Toro’s Pinocchio (best animated feature) were popular among subscribers.

This year’s upcoming Netflix releases include David Fincher’s assassin thriller The Killer starring Michael Fassbender and Tilda Swinton, Bradley Cooper’s Leonard Bernstein romance Maestro with Cooper and Carey Mulligan, and John Ridley’s Civil Rights biopic Shirley starring Regina King.

Earlier in the webcast Sarandos addressed the issue of a possible strike by the Writers Guild Of America. “We don’t like a strike,” said Sarandos. “We don’t want to see this happen, but it was necessary to prepare for the worst. We have a very robust slate of releases that will last a long time.”

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