Ted Sarandos: Well, the budget is the budget. So it’s all part of how we spend against the content and the free cash flow economics. We’ve gotten pretty close in our cash flow against P&L on our content spend generally. So I don’t think it would have much – very much impact on that. Let’s want to add some color to that, Spence.
Spence Neumann: I just love you talking about the discipline on our content budgets, Ted, it makes me happy. No, I agree with all of it. I mean, we spend the opportunity, but with I think, prudent constraints and discipline. And to be clear, like we as you say, there has been more licensed content opportunity. But the vast majority of our content spend is still into original programming. It’s – and it is and is likely to continue to be. So we’ll always complement it with great license content for that variety and quality for our members, but the original content is still our future too.
Spencer Wang: Yes. Great. Next question is from Michael Morris of Guggenheim. Specific about the Jake Paul, Mike Tyson fight for Ted, what are the characteristics of the upcoming Jake Paul, Mike Tyson fight that make this the type of sports programming you’re interested in investing in? How does that content benefit your member base and advertising growth goals?
Ted Sarandos: And so, we’re in the very early days of developing our live programming. And it’s – I would look at this as an expansion of the types of content we offer, the way we expand it to film and unscripted and animation and most recently, games. On-demand and streaming have been unbelievable for consumer choice and control. And it’s really put the controls of television back in the hands of consumers, which has been really phenomenal. But there’s also something incredibly magic about folks gathering around the TV together in the living room to watch something all at the same time. We believe that these kind of eventized cultural moments like the Jake Paul and Mike Tyson fight are just that kind of television that we want to be part of winning over those moments with our members as well.
So that for me is the excitement part of this. We have – beyond the fight itself, we have several nights of live comedy coming from the Netflix Is A Joke Festival next month and starting in January, we’ve got 52 weeks of live sports with WWE RAW that’s going to be coming to our members every week on Netflix. And we think it’s going to be a real value-add to watch those things in real time. And we’re going to continue to try a lot of new things, but the core of it is, do our members love it? And judging from the early excitement around the Jake Paul, Mike Tyson fight, there’s going to be a lot of people waking up in the middle of the night all over the world to watch this fight in real time.
Greg Peters: I think worth noting that just as what’s relevant to members in terms of these large cultural events that Ted talks about, that’s what has relevance to advertisers as well. So it’s an opportunity for us to expand our advertising offering and give those brands access to these kind of culture-defining moments.
Spencer Wang: Thanks, Ted and Greg. And I’m personally looking forward to that event and my money is on Iron Mike Tyson. But as a follow-up on the sports. You still got it, I think. But as a follow-up to the sports question, for Ted, as you continue to scale Netflix and become bigger and bigger and potentially gain more leverage, how could your sports strategy change beyond what you’re doing today around primarily sports entertainment?
Ted Sarandos: We’ve said this many times, but not anti-sports, but pro profitable growth. And I think that’s the core of everything we do in all kinds of programming, including sports. So our North Star is to grow engagement, revenue and profit. And if we find opportunities we can drive all three of those, we will do that across an increasingly wide variety of quality entertainment. So when and if those opportunities arrive that we can come in and do that, which we feel like we did in our deal with WWE. If we can repeat those dynamics and other things, including sports, we’ll look at them, for sure. So I think it’s – we have the benefit of building an enormous business without a loss leader. And we continue to believe that we can grow on that path just as you’ve seen.
So I think the core of it is, is that we’re going to look at those opportunities with the same discipline that we do when we talk to movie producers and television networks about putting our content on the air.
Spencer Wang: Great. The next question comes from Rich Greenfield from LightShed about our film strategy. So for Ted, a recent New York Times article cited internal communications from new Netflix film, Chief, Dan Lin stating quote. The aim is to make Netflix’s movies better, cheaper and less-frequent. Lin wants his team to become more aggressive producers developing their own material rather than waiting for projects from producers and agents that come to them unquote. Everyone wants to make better, cheaper films, but we find it hard to believe we being rich, find it hard to believe that there is a magic formula. Help us understand the strategy shift under Dan Lin versus Scott Stuber.
Ted Sarandos: Well, thanks for that question, Rich. I would send you back to that New York Times article because that was not a quote from Dan. And I would say that and nor did we participate in that article. I would say, just to be clear, there is no appetite to make fewer films. But there is an unlimited appetite to make better films always, even though we have made and we are making great films. We want to make them better, of course. We’re super excited to have Dan join the company. He just joined a couple of weeks ago and he’s joined us running 100 miles an hour. Bella has said this publicly that our strategy remains variety and quality. And she’s doing an amazing job of bringing new fresh-thinking to our content and our content organization, bringing Dan on board is a great example of that.
