Ted Sarandos: Netflix’s Streaming Idea ‘Sounded Nuts’ at First
▼ Summary
– Ted Sarandos, now co-CEO of Netflix, was initially skeptical of Reed Hastings’ vision for internet-delivered entertainment when they first met in 1999.
– Sarandos joined Netflix in 2000 and played a key role in securing direct studio deals and pioneering original content like “House of Cards” with a no-notes, two-season order.
– Netflix uses a “data-informed intuition” approach for content decisions, emphasizing dissent and trust-based relationships in Hollywood.
– Sarandos believes Netflix has saved the entertainment industry by adapting to consumer behavior changes, not ruined it, and views AI as a tool to enhance storytelling.
– His early chaotic family life and exposure to entertainment, including a solo trip to a Las Vegas telethon at age 10, deeply influenced his passion for the industry.
Ted Sarandos, the co-CEO of Netflix, now presides over a streaming empire valued at over $500 billion, but his initial reaction to the company’s founding vision was one of profound skepticism. During a recent appearance on the “Aspire With Emma Grede” podcast, Sarandos recounted his first meeting with Reed Hastings in October 1999, describing the idea of internet-delivered entertainment as something that “sounded nuts” at the time.
Back then, Sarandos was an executive at West Coast Video, a now-defunct video rental chain. He was interviewing for a role at Netflix to help source DVDs for their mail-order service. Hastings laid out a future where all home entertainment would be delivered via the internet, a concept that seemed far-fetched given the slow speeds and high costs of early web access. When Sarandos expressed doubt, Hastings responded bluntly, advising him not to take the job, or buy Netflix stock, if he believed cable would remain dominant.
Despite his reservations, Sarandos recognized something special in Hastings. “I thought that this guy is the kind of person who changes the world,” he reflected. He accepted the position in 2000, joining as VP of product and head of content operations. Hastings had been impressed by Sarandos’ earlier work securing revenue-sharing deals with major studios like Warner Bros. and Sony, a skill Netflix desperately needed.
In the early days, the company was purchasing DVDs from retailers like Walmart and Best Buy. Sarandos made it his mission to establish direct relationships with studios, a move that would later prove critical. When Netflix launched streaming in 2007, they faced a significant hurdle: new movies were locked into long-term pay-TV deals, often for a decade. Sarandos and his team pursued every opportunity to license available content, no matter how limited.
This challenge eventually led Netflix into original programming. Sarandos spearheaded the push, greenlighting groundbreaking series like House of Cards, Arrested Development, and Orange Is the New Black. To secure House of Cards, he offered an unprecedented two-season commitment with no creative interference, a bold strategy that paid off. He describes Netflix’s decision-making process as “data-informed intuition,” emphasizing the importance of seeking dissent rather than confirmation.
Sarandos believes the entertainment industry is built on trust and relationships. His deep immersion in Hollywood culture helped bridge the gap between Netflix’s tech roots and creative ambitions. In a memorable effort to align both worlds, he once brought the entire headquarters team to Los Angeles for a studio tour and a night at the Improv comedy club, featuring sets by stars like Zach Galifianakis and Sarah Silverman.
In 2020, Hastings named Sarandos co-CEO, a rare move for a founder-led company. Hastings had long planned for succession, aiming to build an organization that would outlast him. When Hastings stepped down in 2023, Greg Peters assumed the co-CEO role alongside Sarandos. The unusual structure, Sarandos notes, works well for Netflix due to complementary expertise and strong collaboration.
When asked whether Netflix has “saved or ruined Hollywood,” Sarandos offered a characteristically candid response. He believes the company has saved the industry by adapting to changing consumer behavior. The decline of local theaters, he argues, stems from broader shifts in viewing habits, not Netflix’s rise.
On the topic of AI, Sarandos sees technology as an enabler rather than a threat. He envisions AI tools empowering storytellers to create narratives that were previously impossible, all while managing production costs more effectively.
Sarandos’ own passion for entertainment traces back to his childhood in Phoenix. Growing up in a financially unstable but culturally rich household, he found structure and inspiration in television. Late nights watching Johnny Carson with his grandmother and an early exposure to Las Vegas showmanship during a Jerry Lewis telethon left a lasting impression. These experiences, he says, shaped his career and deepened his love for the industry.
Reflecting on his journey, Sarandos acknowledges the role of risk, intuition, and a willingness to embrace the unconventional, the very qualities that once made Netflix’s streaming idea seem “nuts.”
(Source: Variety)
