Netflix Acquisition of Warner Bros. Redefines Hollywood Power

Key Quotes

"Because I said in this world where we're going to be a digital channel, and I don't know of any network that exists that doesn't have some form of original, differentiating program from each other."

Ted Sarandos recognized early on that for Netflix to control its future as a digital platform, it needed to produce its own unique content. The author explains that Sarandos understood that original programming would be essential for differentiation in a crowded digital landscape, a concept he applied to Netflix's strategy.

"Joe, we love your show, and we're going to buy out whatever we think the backend, the rerun money, will be. So we're going to give you all this money upfront, and in return, of course, the show's ours now. We're going to keep it for ourselves. It's going to live on our system. We're never going to take it out anywhere else, you just got to trust us that we're giving you the value it is."

This quote illustrates Netflix's initial approach to content acquisition under Ted Sarandos, as described by Joe Flint. The author highlights that Netflix offered significant upfront payments to creators, essentially buying out future rerun potential, in exchange for exclusive ownership of the content for their platform.

"One thing I think people respect Ted for, at least on the talent side of the business, is that he has shown a willingness to stand up for his talent. We saw that with Dave Chappelle a few years back. He did a stand-up special. He had jokes and commentary that upset the transgender community. There was some upset at Netflix as well. There were protests outside Netflix. Netflix employees were upset, and Ted stood by. He didn't take the special off. He didn't issue any statements condemning what Chappelle said. But I think that that sent a message."

The author points out that Ted Sarandos has earned respect from talent for his loyalty, exemplified by his decision to support Dave Chappelle's stand-up special despite controversy. This demonstrates Sarandos's commitment to protecting his talent, even when faced with internal and external backlash.

"Anytime you get big, you start to toss your muscle around. So Netflix grew, had tremendous success, grew a lot of subscribers, and with that comes power. Because they were growing so fast and spending so much, they became kind of the one place you could come to do business. But at the same time, once you've sort of taken over the landscape, you don't spend as much. You spend a ton of money to woo and get the talent in there, but once you've got that, you don't have to spend as much money anymore."

This passage, as explained by the author, details how Netflix's immense growth and success led to increased power and influence in Hollywood. The author notes that this dominance allowed Netflix to reduce its spending on talent acquisition once it had established itself as the primary destination for business.

"So we think it's going to be great for consumers, really great for creators. We invest heavily in production, and then we intend to run those businesses exactly like they run today."

Ted Sarandos is quoted here presenting Netflix's perspective on the potential Warner Brothers acquisition. The author interprets this statement as Sarandos's argument that the merger will benefit both consumers and creators by continuing heavy investment in production and maintaining existing business operations.

"If this deal goes through and is successful, you'd pitch it as a movie: the guy in a video store ends up running all of Hollywood. But yeah, it will have been an amazing and incredible run for him."

The author uses this cinematic framing to encapsulate Ted Sarandos's potential trajectory. This quote highlights the remarkable career arc from a humble video store employee to a potentially dominant figure in Hollywood, emphasizing the scale of his ambition and achievement if the Warner Brothers deal is finalized.