Ted Sarandos Says Netflix Is in the ‘Spending Time Business’ vs. YouTube’s ‘Killing Time’ Business
Ted Sarandos took aim at YouTube during a wide-ranging conversation at a Paley Media Council event Friday, drawing a contrast between what he called the video platform’s “killing time” business versus Netflix’s “spending time” business.
The Netflix co-CEO also argued that the Alphabet-owned video platform is “not a good recovery model” for creators, while speaking at “Beyond the Stream: A Conversation with Ted Sarandos.”
When asked about competition with YouTube, Sarandos reiterated that the streamer is focused on capturing the 80% of TV watching not on either platform. But he also said the company is competing for the chunk of YouTube viewing geared towards “professional content.”
“I think we’re a better monetization model for networks and studios for that, but I also think that there’s a whole bunch of creators that I would put in the pro-am category that are making really interesting, compelling programming to watch,” he explained. “But YouTube doesn’t give them any money up front to make it, so they’re doing it all at their own risk. You saw that MrBeast basically said he’s lost $80 million last year on his YouTube channel. So it’s not a good recovery model…if Beast had the audience that he had like that on Netflix, he wouldn’t be raising money. He’d be giving away more money.”
Sarandos said that YouTube is a good platform for creators to “cut your teeth on” or develop an idea that can then be brought to Netflix where they would assume the financial risk.
“We compete with them, along with everybody else, for entertainment, time and money. So certainly we’re competing with them for advertising dollars and professional content. So for that part of YouTube, we definitely compete. For the other parts we definitely don’t,” he continued. “I think there’s a part of the creator community that’s snackable consumption. There’s a difference between killing time and spending time. So we’re in the kind of how you spend time business moreso.”
Sarandos was also asked about Amazon MGM Studios strategy in the wake of head Jen Salke’s exit.
“Honestly, what we do, for me, is so all encompassing and difficult that I really don’t pay that much attention to them. And I don’t mean that to be in the pejorative. I don’t mean to be snotty about it. I honestly tell the employees all the time, if you’re looking over your shoulders at the competition all the time you’re going to trip, and that’s the worst thing we could do, is trip and trip over ourselves would be the worst thing to do. So I feel like we don’t really pay that much attention.”
“When we come to Netflix, we only do one thing. We have to do this really well all the time. And if you don’t like what you’re watching, if you don’t watch enough, you quit. And it’s one click, it’s very easy to quit,” Sarandos added. “So we are totally focused on this. This is the consumer promise that we’ve made, that we’re going to entertain you and we’re gonna give you a ton of value for your money. And if we don’t, you can quit. And I think that sometimes, if it’s not your strategic core, you might go adrift.”
He noted that Prime Video is an “interesting product, because a lot of people get it for free because they signed up for free shipping,” but pointed out that Amazon’s DNA is being a retailer and reseller.
“They must see something in it. They’re spending $9 billion a year doing it. There must be something that works,” he said.
When asked about Prime Video’s sports strategy with “Thursday Night Football,” Sarandos said it is “consistent with what I’m literally just guessing they’re trying to do, which is aggregate a big audience and sell stuff to them,” adding that the NFL is “pretty dependable, but very expensive.”
In addition to YouTube and Amazon, Sarandos weighed in on the Disney CEO succession search. When asked if he turned down a conversation about taking on the role, Sarandos clarified that “no one has ever talked to me about that.”
“I can’t imagine a more interesting challenge than the one I’m in,” he added. “But I’m up to my eyeballs in it every day.”
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