And as you know, we move pretty fast, and we’ve been moving pretty fast. And those single companies that were really successfully launched more than two animated features in a single year. So we wanted – that deal helps us to complement the work that we’re doing, like you saw this year with Leo and Chicken Run coming out and Nimona that already came out. So we’ve got a very – there’s a ton of appetite – if you look at the top 10 animated features of since Nielsen has been tracking movie watching and seven of them are animated features. So there’s a lot of appetite for animated features, and we’re committed to that part of the business. And we do that through a combination of licensing partnerships and original production and original creation and not just in the U.S. but all over the world.
So we have to find that right balance of invest finding the right product market fit, which helps us grow those territories and most importantly, helps create a value proposition for consumers, and they could say, “Hey, that what I pay for Netflix I can pay a little bit more because I get so much value there, and I’m spending so much of my time there. So if you think about the – for the last 37 of the last 38 weeks of this year, Netflix has had the number one streaming series on and all of streaming. And for 31 of those 38 weeks, we’ve had the number one movie too. And in any given week, we might have had the number one, two and three. So we really – we’ve got a lot going on and we’ve got to stay focused on continuing to improve the value proposition to consumers, which drive the numbers that we’ve been talking about on this call.
Jessica Reif Ehrlich: Spence, you announced a very significant increase in your buyback today. Should we think of the $2.5 billion buyback in the third quarter as sort of a run rate moving forward?
Spencer Neumann: I wouldn’t kind of read through to that, Jessica. We had kind of slowed down as we – as the business slowed down, and we wanted to – we talked about the fact that we had less, less than typical forward visibility into our forecast over the past year or so as we were looking to reaccelerate the business and also roll out paid sharing. And now much of that is behind us, as we’ve said, and we’ve got a better view going forward. And so we ramped up our repurchase because we had built up some cash on the balance sheet as well. Our target minimum cash is roughly two months of revenue. So plus or minus $6 billion of cash that we look to hold on our balance sheet, and we’ve gotten ahead of that, we’re still a little ahead of that.
So – but that’s really what we’re managing to is to: one, primarily drive the business forward, grow the business, expand our cash flow and then as cash – excess cash builds on the balance sheet to return it to shareholders. So we put a pretty specific target out there of roughly two months of revenue in the form of cash on the balance sheet, and that’s the way I think you should think about what our pacing will be over time.
Jessica Reif Ehrlich: Moving on to gaming. It feels like almost like the way you describe advertising, like a walk, crawl, run approach, what is the near and midterm strategy in gaming?
Gregory Peters: Well, let’s start with the big prize. I think that’s the better way to look at it, which is games is a huge entertainment opportunity. So we’re talking about $140 billion worth of consumer spend on games outside of China and outside of Russia. And from a strategic perspective, we believe that we can build games into a strong content category, leveraging our current core film and series by connecting members, especially members that are fans of specific IPs with games that they will love. I think it’s worth noting that if we can make those connections and as we make those connections as we’re seeing, we’re essentially sidestepping the biggest issue that the mobile games market has today, which is how do you cost effectively acquire new players.
So that’s the real proposition. And we think if we deliver that, we give members great games, entertainment experiences that they love at sufficient scale. Then we leverage back into the core business. We increased engagement. We increased retention. We increased value delivered. Those all drive our core business metrics. And I think it’s actually just a very natural extension of what you were just talking with Ted about. If you think about the range of content that we’re offering the variety of content and entertainment that we’re offering, games just adds one extra layer to that variety and that depth. And we’re also seeing, I would say, back moving it more to your short-term and mid-term. We’re also seeing performance metrics that support that this fundamental strategic hypotheses are sound.
So games engagement right now on our service drives core business metrics in a way which is incremental to movies and series. So – but the main challenge ahead of us to get to your mid-term is that our current scale and frankly, our current investment level are both very, very, very small relative to our overall content spend and engagement. So now our job is to incrementally scale to the place where games have a material impact on the business. We’ve got ambitious plans there. We want to really grow our engagement by many multiples of where it is today over the next handful of years. And we can see how to get there. Looking a layer deeper at the title level. We see – some titles are really working for our members, and they’re working for our business.
If we can do more of those, we know we can scale into that proposition. We’ve got to do that through better title selection based on everything that we’re learning. We got to do it on better product features to maximize connection with the audience for any given title. And we have to do it by gradually improving consumer awareness, which as we’ve seen is when we launched other content categories, you can think about unscripted or you can think about film. That broadly lifts overall engagement metrics as consumers learn that we’re a place to go to, to find games. I’m excited about what we got going on in Q4. We’re going to launch some big high-profile titles, which sort of keeps that drumbeat going. We got Dead Cells. We’ve got Football Manager 2024.
We’ve got Money Heist. Think about connections with our IP that’s coming in Q4 as well. That’s Casa De Papel for folks who saw in that language. We also have Virgin River coming in Q1. So as you pointed out, this trajectory is not dissimilar from what we’ve seen before, when we’ve launched a new region, think about Latin America or we launched a country like Japan where traditional Western media companies have struggled or we launched new genres like unscripted. We’ve got a crawl, walk, run and we build it, but we see a tremendous amount of opportunity to build a long-term center value of entertainment, more entertainment value for our members.
Theodore Sarandos: That’s a great experience for the super fan to get themselves in the universe in between seasons of a show. It’s really exciting. Jessica, we have time for about two last questions, please.
Jessica Reif Ehrlich: Great. Okay, two. So the first of the two sports, you’re creating the Netflix Cup tournament to be out next month. Is this a change in your sports strategy at all? Or how should we think about that?
Theodore Sarandos: Yes. I know this was kind of me, Jessica. Given we are in the sports business, but we’re in the part of the sports business that we bring the most value to, which is the drama of sport. So look at the success we’ve had with Drive to Survive, look at the success we’ve had with Tour de France, quarter back, full swing, untold, most recently with Beckham. David Beckham is one of the biggest stars in the world and his documentary on Netflix brought him almost 0.5 million new social media followers in a week. So we are having a big impact on sports through the things we’re most great at, which is the drama of sport. The Netflix Cup as a live event that actually brings together the cast of Drive to Survive and full swing and puts them into a live golf term that we are going to stream live on Netflix on November 14.
And it’s – I think about it as a great way of extending those great drama of sport brands that we’ve created. But no core change in our live sport strategy or licensing and live sports. We are investing heavily in increasing our live capabilities so that as the demand grows for that and we find different ways the liveness can be part of the creative storytelling, we want to be able to do that at a big scale.
Jessica Reif Ehrlich: There was some news also today, I guess, on [indiscernible]. But my last question to stay with what Spencer asked – you’ve talked a little bit more recently about your ancillary businesses, including the Netflix House. Can you talk about what that looks like over time? And will it be a big investment area, but more importantly, will it be a contributor?
Theodore Sarandos: Yes. Look at the – this initiative is inside of our Consumer Products and Experiences Group. Today, they run these successful businesses where they travel these live experiences all over the world and fans engage in them in ways that would shock you. People love these things so much. They show up dozens of people have proposed marriage in the Breath of Bridgerton Ball. It’s really important in a way to kind of deepen fandom, a way to express fandom. You kind of see it on a large scale with theme parks, these build-outs are not going to be like a theme park, both in that they won’t have that gigantic CapEx. And they also – we expect that fans will go multiple times a year, not just once every couple of years.
And it’s a way to take a business that’s really good at growing our brands and strengthening our brands. And today, it doesn’t – has a big start-up and shutdown costs as they travel around and put them under one umbrella where we can add a little technology and make it a really phenomenal experience from being as part of the Money Heist, Escape Room or the Stranger Things experience or the Squid Game challenge all those different things that people can do live together and have a lot of fun. And they can also go to the NETFLIX BITES and have food experience with all the Netflix food brands. So it really kind of strengthens the brands and strengthens the excitement about the things people are watching on Netflix and falling in love with and gives them a place to go and express it.
It’s not a material investment relative to the court to the big business that we’re all in. But it’s a great way of building it like our consumer products business.
Spencer Wang: Great. Well, Jessica, thank you very much for your questions, and we appreciate everybody tuning into our earnings call, and we’re looking forward to chatting with you all next quarter, if not sooner. Thank you.
