Netflix‘s Ted Sarandos Is Feeling ’Better and Better’ About $17 Billion Content Budget: ‘We‘re Spending at About the Right Level’

Following a quarter that saw Netflix release several of its most popular titles of all time — per the streamer’s self-reported internal measurements — and subscriber growth after two straight quarters of losses, co-CEO and chief content officer Ted Sarandos is feeling “better and better” about the company’s $17 billion content spend budget.

“Both the scope and scale, as well as the range and cadence of hits is improving,” Sarandos said during Netflix’s prerecorded Q3 earnings interview with his fellow execs, which was released Tuesday afternoon following the announcement of the third-quarter results. “So I feel better and better about that $17 billion of content spend because what we have to do is be better and better at getting more impact per billion dollar spent than anyone else. And that’s how we’re focusing on it. So I think we’re spending at about the right level. And as we re-accelerate revenue, we’ll revisit that number, of course. But we’re a pretty disciplined bunch about that.”

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On Tuesday, the streaming giant reported 2.41 million net new paid subscribers in Q3, including a gain of 100,000 in the U.S./Canada region, to stand at 223.1 million worldwide as of the end of September. That handily topped Netflix’s previous forecast of a 1 million pickup for the period.

Netflix specifically called out these Q3 titles as “some of our most watched series and films of all time”: Ryan Murphy limited series “Dahmer: Monster: The Jeffrey Dahmer Story,” the second half of “Stranger Things” Season 4, Korean series “Extraordinary Attorney Woo,” and movies “The Gray Man” and “Purple Hearts.”

Later in the Netflix earnings interview, Sarandos spoke about what is highly anticipated to be a Q4 hit for Netflix, the “Knives Out” sequel “Glass Onion,” which will be released in theaters, but only for one week and on limited screens.

“We’re in the business of entertaining our members with Netflix movies on Netflix,” Sarandos said. “So that’s where we focus all of our energies and most of our spends. Our films are always heavily featured in film festivals around the world because they are in demand, made by the greatest filmmakers on the planet. For all those folks who can’t get to a city where a festival is, this one-week release on 600 screens is a way of creating access to the film and building buzz, the same thing we’re doing in those festivals.”

Sarandos said to look at the one-week theatrical release for “Glass Onion,” which begins Nov. 23, one month before it hits Netflix, “as just another way to build anticipation for the film and build buzz and reputation for the film ahead its Netflix release” rather than comparing it to the windowing of a traditional studio film.

:There’s all kinds of debates all the time back and forth, but there is no question internally that we make our movies for our members and we really want them to watch them on Netflix,” Sarandos said. “Of course, with one week of release in theaters, most people will see it on Netflix, just like they see all movies. Most people watch most movies at home. This particular release sits somewhere between that week that we have to run movies to qualify for awards and the time that we run them in a film festival and the time we travel them around, but it’s a way of condensing that into a louder event.”

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