Q&A

The Australian - The Deal - - News - In­ter­view by: Glenda Korporaal Pho­to­graph by: Re­nee Nowytarger

Ted Saran­dos tells what makes Nextflix tick

H E has been named as one of

Time mag­a­zine’s 100 most in­flu­en­tial peo­ple for “help­ing cre­ate the fu­ture of en­ter­tain­ment”. Ted Saran­dos has been chief of con­tent for the stream­ing video on de­mand (SVOD) ser­vice, Net­flix, for the past 15 years. Now he wants to change the way Aus­tralians watch tele­vi­sion.

You have just started of­fer­ing Net­flix in Australia. How has it gone?

There has been an in­cred­i­ble level of in­ter­est. You find that in mar­kets where on-de­mand prod­ucts have been un­der­de­vel­oped. Be­fore Net­flix came to Australia there wasn’t a lot of in­vest­ment in the on-de­mand part of tele­vi­sion.

What type of pro­gram­ming will you of­fer in Australia? How will it be dif­fer­ent to what you of­fer in the US?

We will be heav­ily in­flu­enced by what peo­ple watch. You can know a lot about a mar­ket from tele­vi­sion rat­ings data. But once we begin to see the view­ing data on our ser­vice we can ex­pand the uni­verse of choice. It is hard to say you can char­ac­terise a coun­try’s taste. We can’t char­ac­terise any of our sub­scribers’ taste and we have 57 mil­lion around the world. We cut across al­most ev­ery de­mo­graphic and taste pro­file you can imag­ine. On the com­edy side the Aus­tralian au­di­ence is a lit­tle closer to the UK sen­si­bil­ity. But our pro­gram­ming will get more re­fined when we get more view­ing data from Australia.

SVOD has been slow to get to Australia but there are sev­eral play­ers com­ing into the mar­ket such as Presto, Stan and Quick­flix. It will be quite a com­pet­i­tive mar­ket.

They all are. We are now in more than 50 coun­tries and there are mul­ti­ple play­ers in ev­ery mar­ket. It’s a very big uni­verse and there will be a lot of com­peti­tors. I think of them less as com­peti­tors and more as grow­ing play­ers in the en­ter­tain­ment land­scape. (Tele­vi­sion) used to be a very con­sol­i­dated busi­ness with a hand­ful of play­ers. But the way it is evolv­ing, there will be mul­ti­ple stream­ing (ser­vices) just the way there are mul­ti­ple tele­vi­sion chan­nels.

How much of an is­sue is the band­width?

The in­ter­net in­fra­struc­ture is what took us so long to come here. It was a bit slow in be­ing built, but the pace of catch-up has been phe­nom­e­nal. We have adap­tive tech­nol­ogy that is built to work, re­gard­less of your (in­ter­net) speed. The faster the stream­ing, the bet­ter the pic­ture. We have full con­fi­dence in the fact that broad­band speeds will never be slower in Australia than what they are to­day.

Net­flix started out li­cens­ing pro­grams but now you have moved into mak­ing your own pro­duc­tions such as House of Cards and

Or­ange is the New Black. How much h do you spend pro­duc­ing your own pro­gram­ming? mming? We spent $3 bil­lion in to­tal on pro­gram­ming mming last year. Our orig­i­nal pro­gram­ming is prob­a­bly only 10 to 15 per cent of it but ut it will grow over the next few years. We e will have 320 hours of orig­i­nal pro­gram­ming this year alone.

Will you be pro­duc­ing any Aus­tralian n con­tent?

A cou­ple of years ago we came across

H2O: Just Add Wa­ter that is made for the Dis­ney Chan­nel in Australia. We bought it for Net­flix around the world. It be­came ex­tremely popular ev­ery­where. We have since gone on to co-pro­duce the se­quel, Mako

Mer­maids. We have picked up a lot of Aus­tralian shows and have given them a global foot­print. Shows such as Went­worth, Rake, Se­crets & Lies

– the Aus­tralian ver­sion of the US re­make. We have picked up the rights s for them for Net­flix in mul­ti­ple ter­ri­to­ries s around the world. A lot of our orig­i­nal al shows also have some Aus­tralian tal­ent. We have two Aus­tralian ac­tresses in Or­ange is the New Black. And Ben Men­del­sohn is the star ar of

Blood­line. We will also be do­ing a se­ries es with Baz Luhrmann in a few months on the he his­tory of hip hop. It’s full blown Baz Luhrmann ann pro­duc­tion. It will be fab­u­lous.

As direc­tor of con­tent based in Los An­ge­les with a grow­ing bud­get, the queue out­sideut­side your of­fice must get quite in­ter­est­ing. g.

Some days it is a pretty sexy wait­ing room. We prob­a­bly get 30 pitches a week. We have a con­stant flow of some of the big­gest names in Hol­ly­wood com­ing in to pitch projects.ts. There is no short­age of ideas for tele­vi­sion. But there is a won­der­ful rar­ity about a show cre­ator eator who can re­alise a great vi­sion. That’s what I love about Baz Luhrmann. If some­one e else came to us with the idea (to do a show w on the his­tory of hip hop) we would prob­a­bly y say no. It’s very am­bi­tious but I have enor­mous us con­fi­dence in Baz.

You are in 50 coun­tries. The economiesmies of scale must get bet­ter as you ex­pand?d?

The pro­gram­ming has to be glob­ally in­ter­est­ing too. Fig­ur­ing out what are e the val­ues around the world is part of the art. Even in mar­kets where we don’t op­er­ate, ate, shows such as Orangek is the New Black k and

House of Cards have be­come enor­mous us hits. In China th­ese shows are in­cred­i­ble hits. Th­ese are very global shows. The ones es we are pro­duc­ing are more likely to have global bal ap­peal. And the ones we are li­cens­ing g such as

Gotham are shows that would also be at­trac­tive around the world.

How is your pro­gram­ming dif­fer­ent from what you can see on free-to-air tele­vi­sion?

vi­sion?

The shows be­ing made for Net­flix are never in­ter­rupted for ad­ver­tis­ing. And they are not built to be watched one episode at a time. The con­tent cr cre­ators build them with no catch-up time which­whic means you end up with richer story telli telling. You don’t have to take up half the show catch­ing peo­ple up on what hap­pened­hap­pene last week.

But how much time can peo­ple spend watchin watch­ing tele­vi­sion on their com­puter?

Our view­ingvie is on dif­fer­ent de­vices that con­nec connect through the in­ter­net. Most of our view­ingviewin is on big tele­vi­sions. The new smart tele­vi­sions have the Net­flix app built in in. It’s not about peo­ple sit­ting at their com­put­ers.c

What other new shows are you pro­duc­ing?produ

We haveha a se­ries called The Crown we will film in Bri­tain later this year. It is writ­ten by Pete Peter Mor­gan who wrote The Queen. It is be­ing di­rected by Steve Daldry. The Queen is prob­a­bly the most fa­mous per­son on the plan­etp right now. The se­ries will track h her life from the day when her fa­ther diedd when she was on her hon­ey­moon­honeym in Kenya.

Will stre stream­ing on-de­mand ser­vices such as Net­flixNet­fli ever re­place free-to-air tele­vi­sion?

It is not me meant to. What free-to-air, ad­ver­tis­ing-sup­port­edad­ver­tis­ing tele­vi­sion does well is track very large au­di­ences that watch the same thing at the same time. This is very at­trac­tive t to sell­ing ad­ver­tis­ing. It is very good for pro­gram­ming­pro­gram like live sport or re­al­ity shows. Or com­pe­ti­tion shows where you go to work the n next day and talk about what you saw on tele­vi­sion­tele the night be­fore. But we don’t do that.th Ev­ery­thing we do is pro­fes­sion­al­lypro­fes­siona scripted pro­gram­ming, the more se­ri­alsse­ria the bet­ter.

Will Net­flix ever have ad­ver­tis­ing? There are no plans to. What’s aheadah in the next five years?

My track r record of pre­dict­ing the next five years has notn been very good. When I met (Net­flix founder)fo Reed Hast­ings in 1999 we guessed str stream­ing (over the in­ter­net) would be right ar around the cor­ner. We were off by about sev­en­seve years. On-de­mand ser­vices will get rich richer and richer in con­tent. Our own pro­gram­ming­progr will be more global, more ex­clu­sive­ex­clu and more orig­i­nal than we have to­day. The de­liv­ery qual­ity will im­prove. We are se see­ing a hand­ful of peo­ple to­day who are able to ex­pe­ri­ence ul­tra-high-def­i­ni­tion tele­vi­sion. In the fu­ture it will be­come the norm. Wit With ul­tra-HD the pic­ture qual­ity and the sound qual­ity of video stream­ing ser­vices has al­ready sur­passed the qual­ity of the typ­i­cal pay-tele­vi­sion­pay ser­vice.

“The way stream­ing video on de­mand is evolv­ing there will be mul­ti­ple stream­ing ser­vices just the way there are mul­ti­ple tele­vi­sion chan­nels”

Ted Saran­dos on the fu­ture of tele­vi­sion

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