Subscriber growth important, not ratings
During the session, Sarandos made it clear that it’s subscriber growth, not ratings, that drive their revenue. Sarandos referred to reports by two companies, Nielsen and Symphony, which claimed to have cracked Netflix’s ratings. Sarandos noted that one of the companies reported that the audience size for the show Orange is the New Black is twice as much as what the other reported.
Sarandos gave some hints of Netflix’s globally-watched shows by talking of shows like Orange is the New Black, Jessica Jones, Gilmore Girls, Marvel’s Daredevil and the new entry Breaking Bad. Netflix also has high expectations for CBS’ Star Trek series, which it will distribute globally.
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Continuing to invest in original content
This year, the streaming giant plans to spend $6 billion on its original programs. The number will go up considerably in 2017, but how high the figures can go will become clear only later in the year, Sarandos said. This year Netflix has made an enormous push into family programming and expects to extend it to 40 programs by the end of this year.
Talking of the regularly discussed subject of peak TV, Sarandos said, “There are too many mediocre safe shows on television,” but he added that Netflix would not back off in its expansion of original content. “We vote to keep the bar high and keep them coming,” Sarandos said.
How Netflix decides to cancel a show
Every Netflix series has been restocked for a second season.
On being asked how the company decides to cancel a show, Sarandos said, “Relative to what it costs, does it get an audience?”
The executive then listed several other factors that play a vital role like audience satisfaction, what the critical response is, whether viewers complete a season, and social media engagement/buzz. According to Sarandos, their aim is to get the show on air as soon as possible.
“The gap between desire and availability is piracy,” Sarandos said, adding that getting content online as soon as possible is best for fans. However, shortening the window includes some significant pitfalls, like raising the price, Sarandos said.
After the session, Sarandos confirmed that the Spanish-dialect series featuring Mexican on-screen character Kate del Castillo is currently in production. He also said that they are working on a new season of Arrested Development and hopefully will release it by next year.