Jessica Reif Erlich: And given the revenue drivers of paid sharing and advertising, how are you thinking about price increases in the current year? Is it just too complicated? How are you thinking about it?
Greg Peters: Well, I would say the two initiatives that you described represent the bulk of our pricing strategy in €˜23. We anticipate that they’ll both be revenue positive, revenue accretive significantly. So in the €“ according to the details that Spence just offered. Now having said that, our core sort of pricing approach in theory remains the same, and so we’re going to look at the metrics that our members are giving us and telling us and look for opportunities where we’ve €“ I think we’ve done a good job of creating more value for them and for a certain customer segment and a certain tier and a certain country, we think we’ve done a good job at delivering more entertainment for them. And then we will go back and opportunistically ask for them to pay a little bit more so that keep this virtuous cycle going and really invest that back into incredible content and stories.
And maybe, Ted, I don’t know if you want to highlight anything you see comment on that side.
Ted Sarandos: No, I would just say that it’s the massiveness of the content that will make the paid sharing initiative work. It’s €“ that will make the advertising launch work that will make continuing to grow revenue work. And so it’s across film, across television. It’s the content that people must see and then it’s on Netflix gives us the ability to do that. And we are super proud of the team and their ability to keep delivering on that month-in and month-out, and quarter-in and quarter-out and continuing to grow in all these different market segments that our consumers really care about. So, that to me, is core to all these initiatives working, and we have got the wind at our back on that right now.
Jessica Reif Erlich: But you amazingly continue to expand the genres of content, which, as you guys have mentioned, clearly drives engagement. But the most recent new genre, which you introduced on your platform in €“ at the end of last €“ very end of last month is fitness.
Ted Sarandos: Time to your New Year’s resolution, yes.
Jessica Reif Erlich: One class online could be the price of a nevus of subscription. So, while many of the work at our bite size. I mean some along, they are simple, but deceivingly effective. Can you talk about what your plans are in this area? And as you develop more content, it really, as I said, drives value for anyone who would work out anywhere else. So, how do you define success? And is there anything you could take about partner economics with Nike?
Ted Sarandos: Yes. We can’t comment on the partner economics, but I would tell you that we have historically stayed away from the fitness category because it’s abundantly available online, in many cases, for free, as you know. But we thought if we could partner with a great brand, and Nike is certainly a leading brand in fitness with really well-produced content, which this content is, and then let’s go out to our members and see if it’s something that they value. And we will see that in the engagement and see where we could take it from there. So, I think in that way, working with a great partner and the high quality, to your point, of the content itself, we will put it in a really good test, do people want to use Netflix to get in shape or to get back in shape.
And if they do, we would like to keep serving that. And if they don’t, we will keep poking around. So, it’s the way we kind of €“ we are able to test the market at a very high end with a premium brand partner.
Jessica Reif Erlich: There is constant speculation that you will experiment with sports, which is an expensive rental business for many. Does having an advertising offering change your views on offering sports? And any thoughts that you €“ on like WWE, which is for sale, that could be €“ potentially, I just think that could be owned content like any views on sports.
Ted Sarandos: Yes. Look, I would say in sports, our position has been the same, which is we really €“ we are not anti-sports for pro profits, and we have not been able to figure out how to deliver profits in renting big league sports in our subscription model. Not to say that, that won’t change. We will be open to it, but that’s where it’s at today. And in WWE, we look at €“ we have a lot of M&A activity all the time. We look at all of them, but nothing we can comment on.
Jessica Reif Erlich: Does this term play a role in your investments into live events? While life comedy specials seems which have a value outside of the live window, other events, like you just announced that you are going to host the SAG Awards, sports, obviously. These have fairly short use for lives. So, how do you balance the investment in live versus the potential to drive advertising dollars?
Ted Sarandos: I would look at this as part of just like other crawl/walk/run scenarios, where we are really looking at our content that would benefit creatively for being live. So, the results show for one of our competition series that we have or a reunion show that drives news or like the SAG Awards and opportunity to engage audiences live. And because we have got the shelf space, we can do hours of shoulder programming around the live events and all of those things that our members may enjoy. So, I think €“ there is nothing particularly novel about live television, as you know. But we are dabbling in it, starting with our Chris Rock live concert to try to create the excitement around live for those things that are uniquely more exciting to be live.
Jessica Reif Erlich: The theatrical release of Glass Onion was incredibly successful in its limited release. But €“ so for some, it looks like you left a lot of money on the table by not continuing beyond the first step one week, do you have any regrets, or can you give us your thoughts on your evolving film strategy?
Ted Sarandos: Well, I am thrilled with every aspect of the release of Glass Onion, starting with Ryan Johnson, and his great film and Scott Stuber and the film team for bringing it to the table. And I think what you saw was a lot of excitement. We drove a ton of us with that theatrical release, and we created a bunch of demand. And that demand, we fulfilled on our subscription service. Our core business is making movies for our members to watch on Netflix, and that’s where we are really focused, and everything else is really a tactic to drive excitement around those films.
