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Netflix still wants viewers around the world to like and subscribe… but the exact number of likers and subscribers is staying in the streamer’s vault going forward.
Appearing at the Time100 Summit in Manhattan on Wednesday, Netflix co-CEO Ted Sarandos addressed the company’s recent decision to ditch reporting on subscribers as the TV upfront season looms. In lieu of a subscriber count, Sarandos said that the service will instead direct attention to three key areas: engagement, revenue, and profit.
And according to Sarandos, those three pillars are supported by four buttresses. “We call them the four C’s,” he explained, proceeding to break that C quartet down as content, choosing, conversation, and commerce.
“We added that later,” Sarandos noted about the last C. “If you do all three of those well, then the commerce part comes.”
But there’s also a fifth C in the mix—the customer. Sarandos noted that Netflix’s emphasis on engagement, revenue, and profit will reflect what he considers to be the true measure of the company’s value: how it pleases subscribers, as opposed to how many subscribers.
“It’s taking something very complex, boiling it down, and putting the customer at the center of it,” he emphasized.
Choose life, choose ads
Sarandos also framed Netflix’s 2022 decision to launch an ad-supported tier as a customer-facing choice.
“Advertising enables us to offer a cheaper product for folks who might want that or folks who might need that,” he remarked, describing the streamer’s initial resistance to advertising as a “classic counterposition” to the regular commercial interruptions that define the broadcast and cable viewing experience.
But in Sarandos’ telling, Netflix’s desire to be a “choice company” meant that its customers deserved the opportunity to decide whether or not they wanted to binge-watch Wednesday and Baby Reindeer for less money and with more ad breaks. Last year, the streamer announced its first ad-tier price hike, noting that 55% of sign-ups in ad-tier supported countries in Q4 went to the ad plans.
For its part, Netflix still chooses to emphasize subscription dollars over ad dollars. “For the long haul, we’ll primarily be a subscription revenue service,” Sarandos said of advertising’s place in the company’s overall revenue stream. Netflix will toast advertisers at its upfront event in New York on May 14.
Binge-casting
If Theo Von or Joe Rogan become the subject of the next Netflix Roast, you’ll have subscribers to thank… or blame. Sarandos raised eyebrows on a Q1 earnings call last week when he indicated that his eyes and ears were open to adding video podcasts to the streamer’s landing page.
Asked to elaborate on his comments at the Time100 Summit, Sarandos pointed to the pronounced consumer appetite for podcasting’s “video-forward” era.
“It’s accelerated the lines being blurred between what’s a talk show and what’s a podcast,” he added. Netflix has notably been tinkering with the talk show format for nearly a decade, from early attempts like Chelsea and The Break with Michelle Wolf to John Mulaney’s currently-streaming Everybody’s in L.A.
Video podcasts could be the iteration of that experiment and lure over the eyeballs that are currently glued to YouTube.
“People seem to really like them,” Sarandos remarked matter-of-factly. “We’re always looking for what media people are looking for that we can bring value to.”
