Netflix (NFLX) 19 Jan 232022 Q4 Earnings call transcript

Company Profile

Participants

Spencer Wang	Vice President, Finance, Investor Relations and Corporate Development
Reed Hastings	Executive Chairman
Ted Sarandos	Co-Chief Executive Officer
Greg Peters	Co-Chief Executive Officer
Spence Neumann	Chief Financial Officer
Jessica Reif Erlich	Bank of America

Call transcript

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Spencer Wang

Good afternoon and welcome to the Netflix Q4 2022 Earnings Interview. I am Spencer Wang, VP of Finance, IR and Corporate Development.

Joining me today are Executive Chairman, Reed Hastings; Co-CEOs, Ted Sarandos and Greg Peters; and CFO, Spence Neumann.

Our interviewer this quarter is Jessica Reif Erlich from Bank of America.

As a reminder, we’ll be making forward-looking statements and actual results may vary.

to your over question. Jessica, that, you first for With

Jessica Reif Ehrlich

for you today. Thank thank much having you and so me

So Reed, the the could you you big to announcement about us came more the some color decision? on this process how give and management changes,

Reed Hastings

probably Netflix player incredible yesterday about that when entertaining evolution, entertainment it’s have complete us to calls best. Jessica, good have other at And the figure We to and were finding But a XX honestly, we We’ve Hopefully, through whole start. Netflix many full years get we issue, the dream go together on And He films I stock, some service and the so and of their been XX our million just covered it us process. was three succession start. IPO. good And happier issue, as world red think had in of the shorthand the for to to world. DVD of that employees the do streaming Collins Jim how and from of a members, now feels envelopes, well, XXX over we held television years. in be in the three – to leader favorite couldn’t said like $X. it and emerging IPO-ed do this we it out I how now grow. our trying working you of have games we

talents X.X we Co-CEO, where contribute been Greg find as They both to think is have with and Board partial Ted amazing to work. how took years able fantastic. through could ago XX about step. such to they this ago, COO. About a gifts as and started years a the really It platform have trying

they great we have to the in the and for and been company they how continue think acknowledging formal few the been feeling. last this a last really is And super more stock progress. frankly, that I quarters. to at Chairman, more, when least make And could over everywhere decade, hustle have leading terms but I just know a are to I just appreciation We have the to operating and will It’s lead about been them that. we and I not it’s beat be That’s happier. driving what’s I timing want that do I Executive that am helping They really for that and can, be and all theirs record so doing. very ready. and the intensity energy

over back to you. So

Jessica Reif Ehrlich

this I Thank just transition add quite you. a for have Subjectively, in while. that will we maybe seen the smoothest media

does strategy in Greg, Does Now for or this this and Ted signal for approach? what Netflix? a mean change

Ted Sarandos

positively has to Greg have and Reed every changed some I my we and way been, continue do years, to Unfortunately, professionally. And four XX life has Jessica, personally let to first and thank Reed to and me and role foremost, plus a shoes a I model, for he imaginable feet He trust with. be fill. will with, big start it leaves in mentor friend.

do over together So Greg model and In us is made in a leadership the to that the to And day-to-day that like at feels to years. challenge And of same in And really he and to this fast years, team us about for kind other, have of heights. that’s change. X.X able We’ve And And really move can has that been quarter, it. helped partnership. team. trusting, that and absorb to you the a culture can Reed of believe for the rise the so time, with to many steady. a He And generously the respectful ago leadership many a working stable and each I just formal. time, point, be ways, last X.X in Greg see last more a I. years, and opened why complexity the am I transition say just new that’s to raise we succession this that last do. for ways, shared the that said, delegating lot of decade help up the pretty challenge you corners. your has over it I. Reed is you. thinking thank he in particularly, we’ve company in saw why good are I, years and to so to more this And decade. this been In ability Reed, can’t we as able in complementary this way am thing. a and I I and build working This the to the incredible build X.X to he able great with been what a we ago Greg, And It’s want occasion. and been foundation co-leadership steady to this I been But enough. model it any XX That’s to little a thrilled have way has years going around been

Greg Peters

to ever to most to working opinion, in best you with the have to ever a able on pleasure Thanks working as be I responsibility that of Ted. with leaders honor had. be had join frankly, amazing pleasure Netflix take continue and the this to team my It’s of that frankly Co-CEO leadership a some and real and asked has the

the fun It’s been with years we especially just same process always over to perspectives. of our of skills serve to and a I set we closely an and couple motivated in members are powerful I’ll last different of really – and the seeing and proud and to have able are rewarding and grow I’m the at lining day, perspectives different sort want business complementary our the partnership shorthand that ultimately tremendously want So we basically, those what to developed have comments. a to angles the found him experience work of and take real different situations. how that Ted’s echo is by the incredible we is which to But of are been and end things,

model be done even that excellence proud always more am work we in especially the I Reed that the had and about business, some excited over the into into of of follow So get am continually momentum ‘XX have better. to and to driving has latter continuing but half, I to always ‘XX seeking the that push more

that. to forward looking So,

or Reed and I big shifts. we been this Ted, specific And grinding big culture a then working Jessica, is question, to shift individual your no sort our long have of – on and time. for perspectives there strategy through

taking we But look forward for last that this not we think that things have little forward appropriate. have as we of doing the – And – the we we in are have responding bit changes and been been for holding were industry so really, we dynamic that changes to to moment. don’t a bank are a

So mostly, it’s continuity and move forward.

Jessica Reif Ehrlich

Great.

originally the of all So for three but for Greg. Reed, in structure, and for leadership maybe change was this you, now Ted given Reed,

been ran monument from who One build assets. dominant. the get said media Malone, for one of of Murdoch companies the X the the John should to prior they see dominant companies, around the of Do to who if now one and corners. dominant of recently able sold course? Rupert and Ultimately, need few is next best the bulk media Reed both have global bigger, we in a executives your years? is decades their was you Hastings? John quotes are global plus most view of media Netflix not What the stay the shareholders

Ted Sarandos

one couple thing of consumer happening to happening what’s is years that the to next the and I is what’s is out that Well, going over moving streaming. would point be now the

of on what to the that demand, change, home got So in have things, the and delivered be consumer the on fundamental them those that’s a to been all where on content linear the that is. have watch focused and business is at way And Internet shift you we a schedule meeting free original doing of that but years media traditional this to built business And our having XX really we we as being have realizing content blessing are. have and ago, really that had customers they benefited into since started company being unwind the also we from a this customer-first one. streaming, we they where

the things are you of time, long Jessica, big I infancy. all is this a we’ve been where consumers So and as think been X% and become And mean the to on focused continue in think that – future about know still. we for focused going. And the are but its TV time I I are we happening. about our really on we in we’ve that, about it as these stay have as is really talking always are ability to because – U.S., this

So, established. in enormous well ahead, growth markets we amount very it’s an of even are where

I key you the to first focus just for to. being led on consumers milestones And to that’s it’s us and that really referred those I benefit. our been So, think biggest has Greg? and us able what think

Greg Peters

world, say I more Yes. around that that, of being delivering translates Jessica, I being And bigger. touching think terms the think incredible means And I would members in bigger into them entertainment. that

mean them, the being in impact will in in the of in I hours these stream. too. culture mean be the terms have that’s in impact of seen the have we cultural bigger incredible get that I the amount significant is terms that terms going culture ramifications terms revenue can that of of and amount of to terms just engagement you Stranger of it drive satisfying and means We terms bigger, of profit are shows that bigger, in too. Also are Things, Wednesday, see of we – bigger popular

as those we are well. forward looking So to

Jessica Reif Ehrlich

Right.

may subs in Plus a ESPN. impact Disney So is August losing And point ESPN akin for to they at never Disney’s early decline the giant. replace called the valuation sports to It while or reset a when streaming XXXX the will out and of Iger that actually, build in of and Bob market time. ESPN pay-TV into profitability XXXX take subs the for reaction

new by Street’s and live, into to going broad-based games, Do to from or etcetera. more view seems momentous pivot that point, differences profits? subs see has shifted Your it’s you genres fitness, certainly similarities whether Wall which areas any inflection extending

Greg Peters

model And we need I fundamentally been part operating we I starting it if situation. been will at then better essentially take have a go what and execute it’s just weigh to at think streaming you But we at have and in a different significant look are dimensions. we a shot is take where the do in. Ted, of core all that since that maybe in

innovations team content to that that better. we do, whether about it but about and are model the fundamentally Bella content model of the that core experiences And talking that are really executing so doing, the and it’s producing lot we are Scott’s incredible and how marketing is a we product constantly, business conversation that

a not are lot – pivots from model to there have We massive we a is traditional that business legacy go of figure not out. away

We are the progress we about are and things in and like planting seeds of terms gains so we execute that, well that excited if are some we seeing far.

represent us of and the profit terms will in for growth future We opportunities. potential more

the So of a have lot just But this better. do we play that and exciting. got essentially, that’s execute better and is continue it to

Ted Sarandos

And don’t completely say what would is profit about that this and but engagement, revenue. the business about then similarities, I I know really

content. grow we the really When tied are engagement, working, all things the got to grow content to is We all There executing is able – are to an became that things been and working. those have phenomena think is of the on to starting – we about interesting Season grow that day those Stranger and and on business July we in from forward. up you our X profit. thing grow have and Things members that we from what offer the revenue, from So

was Ever been you hit and I went outlet most of Man, So Empress, Any create Only and those Netflix. with Season X, great it’s Gondi Sea straight got U.S., in any as people, is Holmes ever Enola South Asia Burger. one the X, more waiting Never to and Beast, Sandman saved And and the Baptists. into Have the into out of a big X, of a the expectation Season as big are greatest month that’s as this of this would Eddie has Germany hits, Attorney on Ed another Things owners Extraordinary is is the more the from there Kai that’s of for history throughout animated another August, create success there and then cult time, but then sequel forth Cyberpunk Stranger and kill Baptists that built these watched of from And Narcos, September, but year. in one the success, our Brown. Korea, a to go on nominations which go into fan done all of months of videogame adaptation to hailed soon base Gray And our monster that Purple to straight that Bobby also you. non-English Copra fire Jeffrey the Hearts than straight Monster, have with into Quiet Ryan and today all Millie into Front, the one entire ability as their Western back-to-back ever; monster things two will they history just all Hill. in biggest we And you from the to which look January a film films Murphy, All Murphy – Dahmer Woo, North now, you became with Jonah they at way those phenomenal straight the our from which end back nominated and on most in hits Watcher, Korea, film one, animated Story, of the with

Spence Neumann

one analogy is – think I thing kind of fundamentally I just I may know just add, but Jessica, different. the to just

gave, So to homes to moving distribution pay-TV that’s example ESPN a and direction. that from industry reductions in a single-digit that connected each with to down mid on cutting in you path that’s that and the platform cord kind plus in XXX fundamental of million year high shift the was

platform distribution of time. – is it’s share of shifting kind country world core in earnings linear where there big than is in is And many shrinking more saw, Even it’s see streaming. you our you in to a less the where letter, X%. of the So TV countries, than streaming from XX% as largest no

– or it’s our than than XX%. it’s less X% less So, X%, it’s

streaming. in shift linear still So from there runway is an the incredible to

was innovating And what so competing obviously well for us, that And continuously had limiters about described. and we you subscribers also to ESPN growing near-term into what that market growing but when felt still or fundamentally and big really saw big the as and you growing it’s that saw in shift in in decline that opposed market, limiters improving. shift and into that is long-term we

Jessica Reif Ehrlich

Right.

So start to of let’s with and drivers growth, medium-term and the move advertising. of on some both near

advertisers How open going been money exceeding some So crawl, have is months way and The your is advertising indicating that X the to said given your one have prostate in and you has company to supply. demand you platform only going run. amazingly consistently back relative is to expectations? guys are you walk

Greg Peters

it a crawling, say, you And X you months, the know actually early, now think that have learned say. expect when I really you with to we what step Like Yes. exactly you part I ridiculously hardest first months. as are would are And bunch because it’s get going. is we already, don’t but X

is that is working. first I really very, of And quickly. So product that And foremost all the to and very just tech both we very hard The good. to say, launch this that’s hard mean, see. were experience that happen rewarding is to lots this, I’d it’s through ticking Netflix to testament really for work teams and who to Microsoft and a make able worked

plan. comparable is around users plans The engagement significantly other, that our fundamental and we on engagement thing to users see say, from similar of is ads pretty I’d sort non-ads

for is growth you a a are and solid starting that’s work service, with. we on it’s that take €XXX coming us rate U.S., modeled growth than the because plan promising Furthermore, that fundamental great, a give is are that’s now, really delivering because point, sort subscribers examples. So that’s we of we and partly seeing and solid. a great to to in we price just in means incremental and Germany, into have that lower take ads better due rate It’s experience indication. $XXX two the to It point

only to also is over expect the grow to business. actually elasticity growing ad of our and scale take continue that so to sustainability, not And real that a rate within – we’ve right sort sign. see year. a of satisfy to but fits the got general sort sort plans, benefit That at healthy points. different for to is of It needs which are of complementary another mix our of other working that the the a set of offerings middle really consumers different that features price and I means

So that’s quite good.

switching. up Another a lot plan think, important I one, came launched we it community was investor the because before for

seeing switching our much aren’t arm expected premium like from ads We subscription high as plan. plans into

as modeled. economy unit we the So very good remain

it’s points, So to progress these reiterate but think all of initial good I sort are really that.

crawling mentioned, to do of sort move to phase. got there. get to you a get like We’ve to we’re As the and walking to we’d lot

So on better the be We’ve on of of validation, We’ve deliver will measurement. a for we a to two. improvements there terms know that and that, of is experience next we better products consumers. of relevant advertisers to subscribers for that value advertising, for advertisers. of terms will to Targeting got improvements or technical in better delivered, a got ad both progress list delivery more offerings more already which bunch can live advertisers set More buy. value improvements, long in do quarter

that better sales like Microsoft at that just how some and nuts And sort there do number increasing improving, companies learning to that meet an also stuff we we serve of and job to both a do the we better demand. much that and is bolts There just operations processes. need is are do and of advertisers things advertisers ad with so

just getting started. we’re So

our us a like really, we in the are streaming And ahead as win effective, to the basically consumers aspirations most best, essentially improving, over constantly for highest We’re the and connected of have of experience years quality experience, advertisers successively premium us. just terms a TV ads business. period and for a see as we build, trajectory of ultimately and

Spencer Wang

Greg. and Spence

maybe context Jessica. what we know a XX-year about advertising. Hulu’s little kind head start. got give Spence, of a They Sorry, have on Hulu,

many of years sort these sort pass And them dynamics? it of to how all us take of in will key

Spence Neumann

you want go me? or do you first to want Greg,

Greg Peters

No, you. over I’ll it hand to

Spence Neumann

Alright.

have – their the long half would started that’s but we multibillion-dollar of I They and start, domestic exactly, is tier. business. them mean a have we U.S. ad on – know ads is had estimate, It’s reason only. for don’t they see. business already, yes, in they a obviously membership Hulu Let’s roughly business, a the

lower us. engagement So reach, than lower

plus plan, of from clearly our certainly the kind or guess the or given scale I the would ad So it’s what ad that kind seeking larger more and unit free there. I to over in it’s we’ve Greg engagement in our on expect and flow path. plan, monetization, terms emphasize, But the market providing of be kind short of there the because the U.S. what performance time, of of we that – better have our to large out story multiyear a the strength of as choice members is comparable terms just the and of than even consumers sign-up ability is our want we to are in in that economics just seen a outlined way just

obviously, as of years, So hopefully, we next if a wouldn’t business. least Reed, larger you we at it know, to couldn’t over be we’re business getting than year into not large, going portion this and several as in the be X. our Hulu meaningful be be can But

And grow. be more this could that we business of almost billion $XX XX% over than didn’t in revenue. like we’re it least XXXX. we and mix wouldn’t at much $XX we bigger our of hopefully in as revenue of over time a if So into get billion revenue, believe

of So a that’s putting on it how I specific without kind guide see it.

Jessica Reif Erlich

platform. indicates market goals You spot, advertising a upfront committed now CBS really spot, CBS’s major to prior an taking spot, of long-term which advertising being Paramount your

time And it’s critical in advertisers the a that lot for took run frame and amazing this you how would quickly the what’s just Like What’s – how on spot to get prime is stage? week it’s a just premium there? Given away. you video.

Greg Peters

our committed think process. an think But big opportunity, and starting base Well, it to we against big we execute a over folks subscribers, a as we it also, through non-ad we have is there aspirations Spence’s But a point, incrementally be and a starting opportunity. just zero from Spence and Netflix that join to working so goal source about think to is profit is potential back your will talked that a platform, history as and revenue be meaningful fully will non-ads signal had I so here, of over point, of it, time. And that very us iterative also To does lot that years essentially. I come. aspiration from for we’re period a we’re are to a and as and that again, we many significant this of basically

Jessica Reif Erlich

you’ve So targeting, about I streaming linear, linear, think shifting of that the money, the business, all already. eyeballs it, seen the from kind to mentioned mean move. call of let’s $XX are easy of streaming money from seems you’re you These we’ve so when $XX pool like billion billion,

And you be companies the may Has or can’t you’ve view compete compete difficult so or have made the said comments, your incredibly reach, Has comment them. and larger. would to much the Meta But digital this pool but that it past, with changed? in now scale you’ve with more basically is Google you changed?

Greg Peters

sort that pool. we’re really. of that competing I TV traditional initially, say Not mostly with would advertising

Now has into time, I components so what effective. that can advertising think layer of digital we over made

think if in we capability, the that the signed addressable. you fully So about fact targeting

we that about world. those to bring think growing real TV do big the relevance If how of you traditional data first-party that, certainly we relative can are and advantages the

experience. be lean form that that have for the will back back at of in next primarily sort the still – of years least we that lean again, But couple in

at collection advertising well a at. won’t of good suited And Google of component that to so certain be for Facebook that advertising lends is that a or really itself certain compete goal. to time We lot kind with come. demand a And to least the kinds some and of

Spencer Wang

branded to letter, And ad ex Russia. about $XXX you about saw Jessica, that focusing news, China and that, is talked as that, to good globally the on us video billion, that just add Greg in market the is

area do So of we have and plenty a ahead alone. that to opportunity lot in just

Jessica Reif Erlich

enormous there also, it’s subscribers, there enormous in besides opportunity, an but advertising, as is is mentioned. No, Yes. opportunity incremental have you

You growth least lowest at are in but frame priced lowest and the sub can you’re terms thinking are the now service, how of the you opportunity price, you about it?

Greg Peters

Sure. that’s about And powerful. that just ourselves to competitive perspective. about are question a can a in titles that think comment these Bella when on are from non-substitutable really we’re again, Glass more think non-substitute think are lowest Wednesday see we price. you Again, Netflix regard. I or don’t – mean, as the pricing about of you you delivering and Onion, on incredible only Scott think extremely good titles

seek even wider we’re doing to spectrum members consumer for good a of when as pricing want We of range deliver serve more we wide trying options do job is make and really, offer that you that So appropriate points, think world at how different we value expanding range question a wide and to a about price needs? those range. around to the the

around Spence’s is And sort countries bunch there where delivering. opportunities penetrated, owner most have we narrow that which is is offering. many or and competitive two deeply component folks not through entertainment so potentially There of else’s then to about that, world of work of to penetrated us that we’re aren’t it’s to somebody of people X% relatively broad a seeking for part A folks year is total value of over situation Netflix way, think paid them. pools we’ve basically our subscription. have borrowing beyond viewing enough that more incremental And attract length as you then either monetize this pay to of accounts market in credentials. the a about so the TV time, get subscribers. is the we’re paying watching And the think are to account of comment, even basically then and to who be convert to them sort we’re our got back go those But that goal of to to

opportunity So fronts to engagement tremendous get have we can several the great of flows from delivered job feel in and believe the we component that value We opportunity a and revenue we for huge if that that more entertainment X. like represents to all time. we executing grow that do across a

Jessica Reif Erlich

Before we get to advertising one password sharing, last question. just

You have your own free of IP. supported roughly service a advertising fast a television? on decade thoughts offering now time, over producing Any

Greg Peters

one? do want to take Ted, this you

Ted Sarandos

are drive our sharing with we’re models open members. both we’ve right year, content to Look, this on to different Yes. all continuing and these advertising to that plate out of our there with paid to trying our this a now, lot but got launch the and of slate we’re that

segment that are keeping eye sure. we on for an So

Jessica Reif Erlich

password consumers Is expect? or $X sharing What becoming pay what else? you drive versus to sub with their do affordability? a per will it Is there profile? the sharing, something on So $X own

Greg Peters

Yes.

different I borrowers. think there is a range of for motivations

ad-supported price to individual we are some that So account the being is terms of to that and is somebody’s they a of it so we which of borrowing face pay, account. lower those the what just advertising. they is an sharing, to, extra we’re member could the casual whether pricing where don’t an part and Part what of right call of give need have finding us but people to responsive driven obviously, are is and consumer points, trying opportunity countries it forte. do in a or economically And plans present we in

of own transitioning simple. make to a them job create a to And to their that nudge little is so easy our bit and features and give account

have viewing feature, with you allows which history take we export you. the this profile and So all basically great recommendations to a your

motivations your I a different So we will a offer to point, to think people that land of be solutions and able to of range there is range in places.

Jessica Reif Erlich

Can you provide borrowers frame for paying any accounts? the time to converting details, including

Greg Peters

Yes.

us for working let experimentation in terms set sort speak of do work to So been solutions of hard to and this thoughtful to our trying some them. we’ve what at of members

So quarters. experience I have of us profile do making that’s We are features important export but we seen management this testing couple last to mentioned, there a that It’s of the that work folks. for the good a that of features. we account feel over the set think like to you’ve is also bunch gotten

And those roll later so out to this quarter. ready we’re

as And universally worth current be quarters. will next happen of over of move. but countries, are We move, members we will with I sets that of so it’s will there popular this work really we a not think bit the see will a staggered that that sort that unhappy this couple noting

reaction a cancel see we to of think we of prices. We will as similar see what when We to this that. bit a raise

years back grow the them get bringing we period then have continue as a is that new members on have clearly, subscribers, monetization time. those of member from that’s happens to on see and that make titles through both changes incremental borrowers come. So is increased that And the see we But generally, essentially winning service months shortly whether and creating people the our what amazing happen more value, specific essentially turned accounts associated off their folks churn the with to we cannot over then right, to or service who to and transitions thereafter. make, extra will or for will to that back come folks wait those job satisfying some to

Spence Neumann

just – timing kind that in letter, maybe to we looks just little bit reinforce and but just a what of on little Jessica, because sorry, terms a of like in it the guidance. of touched I bit

scaling revenue. growth then we initiatives on QX, QX, see be focused expect is rolling as primary that of walked in to typically we’re would this we see what what sharing are later X% modest in you guide, metric. why just is the add QX course between kind those accelerating which see the what adds scale talked That will much out will to is ads, net out net gradual a adds based pay-at-ad timing, throughout don’t business roll that the seasonality, neutral and we most start atypical we So sharing but broadly across paid in our revenue quarter. have kind revenue And paid on then most of Greg But we FX forecasting as through, where would year, And growth that dynamics the QX build. growth quarter. page year, revenue. in of in which of about QX, obviously, we that we you more roll throughout and our in is of softer paid is It obviously is be a the larger importantly, because probably out a expect these

So I in highlight to seeing kind the what that’s that, of want of and guidance. just kind you’re

Jessica Reif Erlich

And given it advertising, the price revenue Is about too drivers of paid are just are complicated? the it? current year? sharing thinking about How how increases in you and you thinking

Greg Peters

that you would the Well, revenue strategy of revenue significantly. initiatives described bulk anticipate two positive, say represent We both I accretive be the in ‘XX. that our pricing they’ll

in So the according Spence offered. to just – that details the

we’ve for think on think stories. ask we and creating see the keep to good that maybe, telling a then And done anything go remains invest little will theory want and we’ve cycle pricing Ted, and don’t more look back virtuous them. sort that certain the content of of them know for bit core to tier more having this so opportunities job And going at certain you back metrics I them in that, job good a highlight comment a delivering said members approach country, we’ve that certain for a so – us going and and really our I pay you a Now we’re and are us side. and entertainment giving look and incredible into a and that we same, more value to segment customer for done where for opportunistically at if our

Ted Sarandos

that content work. I to No, just massiveness paid that work continuing the sharing the make work. launch will the make it’s It’s grow make – will that will advertising initiative revenue the would of say that

all ability about. consumers quarter-in keep are that of and content and people super the us It’s market grow see it’s and ability segments that the month-in on our television. in to and really across month-out, team proud on to we continuing care their must the then and gives that film, And Netflix across to these quarter-out different it’s do that. so delivering and And

me, wind right to on working, core that is at these So, back have all that our now. got initiatives to and the we

Jessica Reif Erlich

continue new fitness. mentioned, most you is end engagement. have you end of recent very last on to last the But which, But of genres of – guys – amazingly month the drives your content, introduced you expand the as at clearly genre, which platform in

Ted Sarandos

your Year’s yes. to resolution, New Time

Jessica Reif Erlich

of price of online could be the class subscription. a nevus One

about your would work simple, many bite more they Can mean along, So, some for of while size. anyone it really, drives our deceivingly you out said, this And in effective. but talk I you work anywhere are else. what as the value plans are who I content, as area? at develop

do is Nike? about you could success? And you how there economics take define anything So, with partner

Ted Sarandos

a brand content but partner in away Yes. would for in it’s fitness with But free, from see cases, in is, can’t it could well-produced this Nike historically because we you know. value. that take members see there. have We many certainly if it’s a we we available and could something tell engagement we economics, the and go from really the with we then will comment they if is out And that category I stayed online, see that let’s you on and thought which content, fitness great to the partner our where and brand, abundantly as leading

to And we or want poking that put a serving do, they in we test, to in get don’t, your So, the they will to Netflix point, and a would in keep we with partner if itself, shape. content back I do around. will quality, use of like shape if that. to think in keep high way, really great working the people it good get And to

it’s the brand at with high to So, the a market premium we are we of very partner. way – test end a kind able

Jessica Reif Erlich

rental views which that an WWE, There many. sports, sports. potentially, that like offering change advertising Does owned you having think for views like could will – experiment is that your be any with thoughts for an business is be which expensive speculation that is I any could content you constant – on on just sale, offering on And sports?

Ted Sarandos

sports, would our profits, to are we the been has position which able same, model. out and to profits we our really that, been pro change. not I to in is won’t – how say sports say for Look, league that subscription we deliver in not big have figure Not Yes. anti-sports in renting

we lot We can – at that’s have but M&A today. activity it, at it’s in open to look nothing a all We we WWE, but of time. all And be the comment at where on. will them, we of look

Jessica Reif Erlich

term seems play this just life fairly events? comedy that live Does lives. window, the host are value which the These other you of like outside obviously. a investments While specials have have announced live your SAG you going to events, role use a in Awards, for short into sports,

balance you do to how versus drive live dollars? So, potential investment advertising in the the

Ted Sarandos

scenarios, I at benefit really like that of would would our content being at look as live. just part this creatively where other crawl/walk/run are we looking for

have reunion around we events of hours like members we and audiences one space, enjoy. can series that the for live the all shelf have our to or got a show show opportunity that engage our Awards those because drives news competition shoulder things we of And or results live. do the programming the and So, may SAG that of

there know. that to for Chris to dabbling live. starting are the in try our live create uniquely exciting – it, be those excitement we particularly around is things novel think about Rock more are live I nothing But So, you live to television, concert as with

Jessica Reif Erlich

of by do first lot can the thoughts looks theatrical release. beyond step give any so evolving continuing or on of have limited money you – film the Onion on was you in incredibly The your release you left your strategy? But Glass for it week, us regrets, like a some, successful its not table one

Ted Sarandos

And thrilled the film Well, was us our starting that Onion, release of Glass drove the service. excitement. And bunch We bringing saw you and great it his Johnson, team film I what with that the with Stuber and we I Ryan table. think am Scott of to a every aspect subscription demand. a for and demand, and theatrical of we release, fulfilled created with on of a ton lot of

Our those and Netflix, is movies core that’s to watch to where business excitement films. really drive for making on focused, is are a really tactic members everything else and we our around

Jessica Reif Erlich

a second. in MAX every drive There York So, just would massive with sold seems you be in a monetization. could like global New Like like Wednesday store a so know the I to hit makeup for ways City. you Wednesday? down staying like many was margin

a or these types just Do You consumer fuel it in could buy not fans, way it you products, anywhere. participate fuel of to is engagement?

Ted Sarandos

fandom. the we It’s it. a We do participate engagement mostly and fuel – fuel little – in actually

lot our the earlier, people Hearts. was on And and for in of as Greg content, the revenue Our dunk impact it that on million as some be to products to that for drive this as actually on of is own picked distribution sell but and is our influencers. Sofia history followers off that up XX consumer But Cramps. owned have mostly, in we that in Carson’s slam Metallica, And took business business. from And this Spence? the a companies, charted social do a this it’s first in drive music it’s the our all the makeup, it a hand motivation on our alluded products love even Ortega one to intensify Bush, launched or impact fandom. impact consumer from on And songs we pick Lady the years that the the The platform, on never cases that is where you back to out earnings some Wednesday, would of not their and watched which take shoulder. own because then we of the the who this Gaga that from because the and our doesn’t our And years were have drawn to Netflix. incredibly charts, it these But way something culture do. your can that use song after fandom. Jenna incredible this platform. in could said, UI release letter, anything up charts basically XX do like – came that we as And that In to because Netflix back jammed going four on mentioned mention, build Wednesday Wednesday. activity be off maybe world. year push that career predict Wednesdays, all UI of own makeup into content powerful over XX that to Kate could the folks can early of most careers media their shows Purple become go all these week much And gigantic of on culture, to going people of many they a

Spence Neumann

Yes.

supporting as at going to and miss never show up to the or maybe Greg risk I to where the thrilled of management Ted. Reed did am chance thing. going You Wednesday know talk frequently as my changes and going is at the say, seeing least of with changes. not and to get I kind I he is back am

in is I a just daily little got reinforcement way, a bit But have of not this even I little So, brought thing though Reed anywhere. going with reinforcement.

Jessica Reif Erlich

way tell local hits any languages? hits. kind building, it your but on The you like about parse do of or so language the U.S. allocating a minutes. $XX there How genres content think me out? between Like few a for budget you billion content with can is Sticking or

Ted Sarandos

have big what Spence allocations, hits, growing isn’t Watching – are everyone meaning in two, the there that preference where way. And have Game in the U.S. really big between There and Game and local those and Squid making is in Japan, many and Bella for was that real it’s and Wednesday – something between like an a his job. Mexico Yes. very language the even rare suffering countries watches around film when are where a out world big once world her task. thing. while, in even that is team interesting in figuring big hits. and we every local there global hit aren’t what’s in those support content, even that task television, under-programming over-programming or is and of same It’s we and where team a is viewing our way. a a is And as of one looks example, very that like Squid the local like the rare

week top Spain, QX, So, series XX Colombia, a about the South in every Poland. quarter launched from non-English from from from Japan, from nearly of Korea, we think

so world. in I audience the doing not want the because And countries. both And And people the just is To kind content It’s Netflix language viewers, actually the would and addressable be anywhere ground investment Those total the benefit on of anyone Mexico mentioned earlier mostly of that Western-centric the and TV that film and audience world. are but we success addressable become watching produce the is investments All doing world, of industry. that for just entry to English generate those important increases Germany early Front in the these in for who local of Quiet mind on was for the see, Western it teams benefit of attracting content that we Because BAFTA. keep exceptional the the in Award but history Netflix that’s around phenomenal. Oscars. Academy the leading has have really the never happened content we content our were if the

Spencer Wang

about ask… chance a two to want might have time margins have we to for sure you one make Jessica, or last I anything else or you want questions. just ask to

Jessica Reif Erlich

let’s content So, away from then. move

cash flow. free So,

‘XX. an build inflection like, cash ‘XX, starts operating Can accelerating? $X.X ‘XX, there driving that Can – probably change $X any Is billion overall been talk buy. capital in about margin of point, billion about historically, And have in just you in you talk more what $X than you billion what’s roughly First priorities? plus philosophy as in all, increase?

Spence Neumann

go like? you first if with don’t philosophy, Spencer, why you allocation capital the

Spencer Wang

Sure. Thanks Jessica.

selective the main at foremost, are after that. acquisitions all to, allocation in core we as policy the the change business guidance, is and first were and priorities. our So, in to capital no reinvest which or structure Those letter,

revenue, excess is our our or if buyback shareholders have to cash Beyond that two of we will of – which then share to which to in equates that, we our return roughly minimum months cash levels, program. we

Spence Neumann

days. of of platform, page which typical terms our sharing, globally XX%, can with. level margins, term, And the an amount than ‘XX I hasn’t all of these can in But target It’s because – out yet, forward. at that outlook. turn quite a and bit And as outlook Yes. what I short-term it XXXX, saw walk the like, the at talking the when of the kind margin now everything rates.” revenue we up launching then highlight were near-ish ad whether at I we just we manage with we with rolled macro of we the beginning things these back, then year in just And to neutral page optimistic kind pick got visibility of say, our our explanation. XX% ‘XX, in early it’s you ended for also our what’s uncertainty. should of to And things you is are those the But growth, our we kind first, a also going start end are dates XXXX terms high multinationals we to in of letter, a about terms unusual want talked January we XX%, generally, range. scaling I have about, driving just in if less saw said, revenue to frankly. we have there FX to operating If back so are to of of “We initiatives, where are we in of also slowing of path

the there So, the a XX% revenue those to bit that’s rates. we we forward are confidence see of to to is what and see that in we a the of now our operating with terms growth turn same high caveat ‘XX, margins, XX% FX-neutral path accelerating we our variability But to XXXX as in – guiding forecast. January

XX% Year, we margin take a XX%. New to into now so our January current that’s are operating ‘XX it and We to of forward to rates, guidance of range

within manage we FX that margin to guide. within band going deliver at least XX% to neutral XX% are to ‘XX, now for operating So,

we profit. paid reflected So, And really margins, that growing course revenue – confidence to we what’s the absolute throughout have growing is as of and the we is in ads this that sharing. accelerate launch there year ability our high scale in

in the we We improving are Ted service have got here our manage of cost our structure confidence continuing everything with to slate the that on strength content and high And also call. with the discipline. increasing discussed

slowing back ‘XX You will in of saw the carry in with through expense our half growth that and we ‘XX. similarly that

growth that So, growing profit both of and focus, our flow. all positive accelerating our itself – absolute year, double-digit revenue and kind growth then is throughout profit lends growing revenue to the expanding cash free our healthy and margin that which

near-term. through. all less reflected again something that’s with that a this caveat will work than is bit there typical So, That’s to we the in visibility continue big

free guidance update as that’s couple appropriate. will a plays We a out least plays quarters than believe all same we billion that $X cash also roll know managing more through spend cash obviously But of see, content generation about the billion, will at through in over as have what cash sharing, where lot quarters, you and the and flow that more paid with next those of of the dynamics we and we $X will few year. at flow we level then that

Spencer Wang

Netflix Jessica, it for prior covering as for and that a to Ted over thank as before and years, done on all work are wanted just real everything Netflix super to your alongside to the the a our employee, been say for chapter as XX question company for And employees, remarks, excited to as questions. you Spence, with all longtime Reed, years, closing the that I And for answer Chairman past Greg for on and, as us last has co-CEOs. you, over for many and privilege formerly I our Netflix all we you Thank Executive turn you behalf next Reed you. it we an of analyst have and the

to you, over that, Reed, make... So to with

Spence Neumann

thing. because I Ted thank asked Reed is Greg across have just deal so Spencer, to I X with to with years incredible Reed. and leader, know. a I not just as from been for and And can’t well. everything more I But thanks am so you excited. our with the as goodbye, – couldn’t the And I past it’s want super thrilled much, in and learned fantastic. next experience this I a just This with so work humanity. you chapter

Spencer Wang

Reed, you might be muted.

Reed Hastings

goodbye. It’s you, invested am guys. Thank success. not in heavily certainly Netflix I

and continued leadership and for super our I more everyone. XX been last Greg years and lead, under you I I earnings has prep first I you XX there the them. calls love of being So, this to forward I years to interaction. Ted the good, say your so am members call excited Thank great were all honestly is Pleasing, and my have time team next would will the will be Netflix’s about on sessions, shareholders Overall, support team. thank and the to and But be screen. just our look now, and want XX earnings and in progress. it’s satisfied but loved I for broadened our

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