A (2:33)

Well, I think, you know, expressing that as an ambition and also that as a way to organize how the company thinks about what we're trying to go do is great. I also think that that's not consistent with saying that we thought it was realistic that we were going to be the only thing that people were going to watch. Right. Because I also don't think that that's realistic at the end of the day. So I think there's always going to be, like, multiple sources of entertainment, even in the categories that we serve. We want to be, you know, we want to win as much of that as we possibly can. So I'm, you know, going back to being complacent. I'm not happy with the fact, you know, that we're not growing engagement. We should grow more engagement. I think we will. I expect you'll see, Eng, the numbers will go up for us. But also, I don't think there's a world in which we be the only thing that people watch.

B (3:12)

A big project, I assume, to help grow engagement was the new user interface UI that you rolled out over the last year.

A (3:18)

Plus Yep.

B (3:19)

Can you point to some key ways in which that has already helped or you think it will help?

A (3:24)

Well, I would say a lot of what we've been doing is essentially rearchitecting the entire stack. This is from sort of how algorithms get calculated. We used to calculate overnight everyone's recommendations. When they show up in the morning, we would have that baked. Now we do it dynamically on the fly. And now we've created a UI where essentially you can connect those algorithmic pipes in and also launch new modules.

B (3:48)

Can you use words that. I'm not even going to insult the audience here. That I will understand.

A (3:54)

Yeah. So, thank you. Basically, what happens now is that when we think about what titles do you want to watch? Right. We used to do that overnight and you'd show up and we'd give you those titles. But now the way that we do it, essentially, is as you're navigating the ui, we think about, oh, what are signals that you're giving?

B (4:14)

I skipped over this thing really quickly. I'm not interested in that.

A (4:17)

That's right. So I think that's something that's going to take us, I think, a while to really build the fullness of how that delivers benefit for our users. But the thing that I can point to right now that the new UI structure is designed to go do and is doing for us is serving new content needs as we expand beyond just film and we spend it to live events. And the UI has to do A different job, which is like, why do you want to show up at Thursday at 7pm because, oh, you're going to watch a boxing match that you wouldn't otherwise get to see, or why do you want to play a game? Or those kind of things. That's what it's doing for us right now.

B (4:50)

Right. When it comes to live, that was something that you sort of famously said you weren't going to do sports for a while. And I know it's not just sports. You also do other live events. But the sports have been the biggest.

A (5:04)

Right.

B (5:05)

Your NFL game was really big. Boxing match was huge. Or both boxing matches. The Logan or the Jake Paul one will decide if it's really a boxing match or elder.

A (5:16)

You could offer your own. If I'll rephrase.

B (5:21)

How much more are you going to invest in live events over the next few years? And are there things that you know that you want to add to the service that you don't have right now?

A (5:30)

So I would say start with live events we think of as an important additional form of entertainment that we can deliver members. It's sort of a different style of entertainment, you know, where actually it's interesting because in contrast to our on demand service, which has tremendous benefit because you control the entertainment when you want to watch it, the big benefit alive is that we're all experiencing the same thing at the same time. And that has tremendous sort of social and conversational relevance. Right. So we want to do more of represents a very small fraction of our total investment. It represents a small fraction of our total hours. But we think it also does a different job. So it's sort of.

B (6:06)

Does it have a different impact? Like, do you see. Because from the third party data I've seen, you tend to see huge surges in signups around some of those bigger events.

A (6:15)

Yeah, I think we expect that it will do the same work ultimately that our other content does, which basically is a reason to sign up and a reason to stay. That's at the end of the day. Now I think back to your point about what do we know we want to get and stuff like that. We're still really learning in this space. So we're really trying to figure out, okay, how is this delivering value to members, how is this delivering value to the business? And there's definitely different phenomena. These are punctuated moments, to your point, which people go like, okay, if I may be on the edge of signing up for Netflix, this might be the thing that pushes me over to actually do that. So I think we'll see different things for sure. But we really are learning as we go.

B (6:53)

I want to throw one poll to the audience before we I asked the next question because they are related. If we get it up there, I will ask. So I just want to. I promised Greg I would do this. Keep in mind how much these sports cost. Football is the most expensive. Tennis is the least expensive. Everything else sort of fits in between there. So even though Greg and I both like tennis, probably smallest audience, but also.

A (7:19)

Least expensive, big international audience.

B (7:24)

What would you say are the odds that you make a bid for one of the football packages when the NFL opts out of its current deal in 29?

A (7:32)

It doesn't really fit with our strategy as we understand it right now. So, again, back to your point. We think about what we're doing as an events strategy. And it turns out, as you said, sports are big events. And so we can plug those into that strategy. But we also want to make sure that we're being really, really disciplined about are we buying, are we investing in ways that are profitable for the business? And some of the big league sports things, we don't actually have a way to figure out that math. Soccer.

B (8:00)

Okay.

A (8:00)

All right.

B (8:00)

Although it doesn't. I mean, isn't sort of the magic of football. I get that the NFL is maybe tricky for you in that it's not global and how expensive it is, but the reason it's so successful, it's the one sport where like every Sunday sort of is an event.

A (8:15)

It's amazing in that regard. Right. But I think to some degree that lack of substitutability is, of course, what gives the rights holders the leverage. And they've done a pretty good job at getting paid. I know.

B (8:26)

I can tell that you guys have this vision of where you have more leverage than the sports leagues in a negotiation. And that has basically never happened in media.

A (8:34)

That's right. Until it happens, I would say you should have some skepticism about that.

B (8:39)

Okay. One other thing that you guys have basically never done is large scale M and A. But the bigger you get, the more you tend to get tied to different companies, different deals. There's been some reports around you guys being interested in Warner Brothers Discovery. Is there any truth to that?

A (8:56)

I'd say this. We come from a deep heritage of being builders rather than buyers. I also think that one should have a reasonable amount of skepticism around big media mergers. They don't have an amazing track record over the history of time. I would say it's our responsibility to evaluate our options and try so you'll.

B (9:20)

Look, you'll have a conversation, but the odds of an offer are pretty low.

A (9:24)

Yeah. Our job is to figure out like, what's the best way to grow our business, right. And we have to think really carefully, like how do we invest our capital, our time and our attention. And if that's the best way to do it, great. And if it's not, then we should do something else.

B (9:37)

One area. You're investing a lot of capital right now, or you might quibble with a.

A (9:41)

Lot, but is gaming small fraction of our total investment? But appreciate you saying that.

B (9:47)

You've been offering video games for four years. How would, what would you. What grade would.

A (9:50)

A little over three.

B (9:51)

Little over three, Sorry. What grade would you give your gaming efforts so far?

A (9:57)

I'll give us a B minus. How's that?

B (9:59)

Okay.

A (10:00)

Yeah, I would say, look, you want to maybe just start where we're at, right. One, you know, it's a big market, you know, $140 billion. Ex China, ex Russia. That doesn't, that's just consumer spend that doesn't include ads. So we think it's a real opportunity for us to try and earn a percentage of that over a period of time. A lot of what we've been doing is really just building the foundation. Right. We've been doing a lot of like, you know, real hard plumbing work. But now we're getting to a really interesting place where, you know, we're going to deliver more of what our vision of what we should be doing in the space is. And we call it games because that's a, you know, a rubric or, you know, a name that we all can relate to. But really I look at this as how do we add more interactive capability? So that means even things like taking our live program back to live programming, how do we add interactivity with live. So we got boating right now that we're in testing on with David Chang and his live cooking show. You'll see that interact those interactive features, come up with Star Search. We do a lot, another live event, a non sports live event of Star Search. So that's an exciting place to be. And then it gets also the Dave Chang. Yeah. So you can see this is sort of how the Dave Chang experience is working. And you know, again, this is the tip of the iceberg. And we'll get deeper into this as we go. We are also, I think, more clear around what are the gaming areas. Back to the more traditional gaming areas that we are operating in. It's a lot of interactive games around our ip. So you think about what we did with Squid game. I don't know if you saw Thronglets based on the Black Mirror universe, but it's worth checking out because if you're a Black Mirror fan, it's so in universe. And the fans of Black Mirror just loved it because it was like they were having a meta experience there too. But even like Happy Gilmore, we did a golf game with Happy Gilmore that got a remarkable amount of consumption.

B (11:42)

Do most of the people who use Netflix know you offer games?

A (11:45)

I would say, I mean, that's part of frankly, what's been hard about this. And I think it's hard for any brand that has a deep, you know, consumer sense of what are you doing for me. Right. And then you're like, well, I'm going to do this as well. And you have. It takes a while to really build up that sense of what's happening. But it's not that dissimilar to, let's say when we launched in a new country, you went to Japan, right? So when we started in Japan, 2% of the Japanese population had ever heard of Netflix. So nobody knew what we. Nobody even knew our name, much less be able to tell you what we were doing. And we were doing pay TV service in a country that doesn't really have a great pay TV operation. We're doing over the Internet in a way that was totally new. And so you got to every day build a little bit of like, what are we doing, who we are, how are we here to serve you? So that 10 year journey, let's say we just did the 10th anniversary in Japan. Tremendous progress over 10 years, but it took us a long time. And I think the gaming situation is not dissimilar to that.

B (12:47)

How much is it an impediment that for the most part now you can only play it on your phone?

A (12:53)

Well, I would say the phone is. What's great about it is it's a well developed gaming ecosystem. Right. So folks notifying games there, but it's also a highly competitive gaming ecosystem. So it's developed. This gives you both that upside and the downside. But what's exciting is that now we are moving beyond the phone to the tv. So I mentioned the big gaming areas we're going after. One of the big gaming areas we're going after now is social gaming experiences that will show up on your tv. So we are now announcing, we're going to announce here actually that we're going to have these social party games, a pack of social party Games that you can play on your TV with your phone as the controller. And it's things like recognizable games like Boggle. You got Pictionary, we've got a Lego party game, we've got Tetris, we've got like a mafia style whodunit. This is me and our CTO Elizabeth playing Boggle here, which is. We're two very competitive people. So it got pretty ugly.

B (13:54)

Who won't say that means you lost.

A (13:58)

Oh, does it? Why don't you watch the video, my friend? You triggered my competitive spirit. But this is, again, this is, you know, so it's your phone, which is an incredible device, and there's all sorts of things you're going to be able to do on your phone that you can't do on a normal controller, like touch screen. And this is us basically picking our words on that. And it's dead simple to use. It's intuitive. And then this is us on the earliest days of how we actually can use that. And if we basically are going to unleash this with a bunch of creators and they're going to go figure out stuff that we didn't even imagine that they can do with that interactivity.

B (14:38)

You made a comment earlier about how it's never been more competitive in media. How worried are you about competition from the second richest person in the world?

A (14:50)

Well, I guess I'm not sure that that's exactly who's competing with us. That's maybe a good question to start with. It's fun to have some new vigor in the competitive ecosystem and the dynamic there. I think it's exciting. It sort of keeps everybody on their toes and we're trying to figure out. Everyone's trying to figure out, okay, what does that mean and what does it do? I also think you have to go back to doesn't change the business fundamentals. You still have a bunch of problems to go solve and business to grow, and so we'll see what happens.

B (15:20)

So you bid against them for ufc. They come way over the top. That doesn't worry you? That doesn't send a signal that maybe they'll be able to spend somewhat irrationally.

A (15:28)

For Lucas, we are constantly dealing with situation where our competitors outbid us. And what I try to remember with our team is we should bid up to the point where we think it's going to deliver value back to business. And if somebody outbids us, I say you should applaud and say, go with God and try and monetize the heck out of that.

B (15:46)

Is it fair to say that YouTube is the stiffest competition, or at least for attention.

A (15:51)

Sorry, say that again.

B (15:51)

YouTube.

A (15:52)

Oh, YouTube. Yeah, for sure. They're a competitor, of course. Yeah.

B (15:54)

Would you say they're the toughest for you?

A (15:57)

I mean, they're a formidable competitor, for sure. I mean, and I think because to some degree, they compete in a different axis. You know, I think it's, you know, orthogonal competition is always the hardest competition to deal with because it's hard to measure how you're doing things. They have angles against you that you might not be familiar with. And so I think we're developing an understanding of what's our place in the ecosystem relative to them. How do we basically shore that up? We want to be the place where we invest ahead with.

B (16:24)

So what is that? Do you look at that and say we need to do ugc? Do you look at that and say we should skim off their biggest talent?

A (16:31)

I think the dumbest move would be to try and match them in every way, because I think you have to really know what lane you're operating in and then try and be excellent at that and then defend that lane. And so what do we do? We invest ahead with creators so that they can tell their story in really, really compelling ways, in a way that the YouTube model doesn't really allow them to go do. So we want to work with the best creators on the planet. Some of those folks are going to come from YouTube, they're going to come from TikTok, they're going to come from traditional places all over the place. We want to be the place that they want to go when they're ready to tell that story at that level. And then our job is to find the biggest global audience for them and make that really a strong reinforced loop.

B (17:07)

Yeah. I was talking with your old friend Robert earlier, and he made a parallel of sorts that I think other people have done between the dawn of. Of UGC and where we're at with AI entertainment right now. A lot of people over the last week in Hollywood very alarmed about Sora new product from OpenAI. Netflix, it seems like, has been slightly less reactionary than some of its peers. If I'm being fair, you guys have talked openly about using AI on at least one project, so why disclose that? And how are you using AI in terms of the creative process? Not tech, product, any of that.

A (17:46)

So my. I think a better parallel in my mind is actually the Internet rather than ugc.

B (17:51)

Sure.

A (17:52)

So that's how I think about it generally. Maybe just to start with, we've been in the AI business for people that haven't tracked for two decades. And so we think of that heritage, our tech DNA, large sets of data scaled consumer products, scaled business processes, including on the content production side, as being the reason that we actually have an advantage to lean into how we use these technologies. We want to do so in a disciplined way though, because I think you can throw a lot of stuff around that's not really going to matter. And we want to figure out where the places that deliver value to the business consumer experience is. One advertising is another big one. You mentioned content production. We feel like our job is to give our creators a suite of tools that we've vetted and that are work together, orchestrate together. Well, they can use other tools too. That's up to them to figure out what they want to go do. But we see a lot happening in previs and shot planning and scheduling and pro forma budgeting and all that stuff. We see a lot happen in the sort of post side of things, the VFX and you mentioned examples that we've used before. That's a pretty good example where we've been able to do shots that we wouldn't able to do in other ways. And so we see that continue to proliferate and we'll let the creators lead the way in that process. But I think our job is to assist them in that rather than than hold back.

B (19:08)

So do you, I'm curious because some of your peers in Hollywood have sued some of the AI companies. Do you feel confident that an OpenAI, a Google, a meta, or some of the smaller ones like midjourney, have violated copyrights that you guys own?

A (19:21)

Well, I mean, I think we're in this process where you're going to see a lot of people trying stuff. But I would say we have a very strong position that IP should be protected. We believe in supporting creators, they should tell amazing stories with us, with other people, and that output should be protected. And so we believe strongly that tool creators, some of the folks that you mentioned, and also consumers, we have sort of a legal standard around this, whether it's coming from an AI model or from another human creator. Like if you copy without AI, we've got a legal standard around that and we should enforce those standards and be strong about that.

B (19:56)

Another area where some of your peers have gotten into conflict that you have thus far avoided, although it flared up a bit recently, is, is in politics at a moment where you have a president who kind of has gone after a lot of elite institutions, probably has tweeted nasty things about your company at one point or another. How do you think about. Do you have to do anything to proactively defend yourself?

A (20:21)

I think we try to stay focused on serving members and serving the business as being our overarching organizing principle. And when it comes to some of the things that trip, you know, we've been pretty clear about our position that we are in the business of entertaining the world. That is our mission.

B (20:39)

But in entertaining the world, you are invariably going to program certain things that a lot of people don't. That people don't like. Right. That's dangerous.

A (20:47)

We are doing our job well. So just to be clear, like we're trying to now program for a number of human beings on the planet that's approaching a billion people. Those people all do not think the same. They have different views of what their entertainment should be delivering to them. So if we are doing our job right, we're working with a wide diversity of creators and we're supporting their ability to tell their story in their own way. And again, if we're doing it right, there's something on the service where every one of us as employees or every one of our members probably thinks is not great or they don't like, or maybe they think it's harmful. And frankly, if we don't have that, we're actually not doing our job correctly. We've been pretty clear that that's, that's the business we're in and we're going to keep doing that.

B (21:31)

But you do every so often take stuff down when governments don't like it. We just haven't had it happen here.

A (21:36)

Well, to be very clear, we do not respond to government pressure. When the government has a legal claim that we have to be legally obliged to respond to, then we react to that. But we then actually post that so that there's transparency around that. And again, that's like happened five times in the last year. Right. So it's not. I mean, it's. If you think about the kind of content that we carry and the number of places that we carry, we've generally been successful at having a wide range of content up in every place that we operate.

B (22:06)

Okay, we're going to run through a few things quickly because we only have a minute plus left. Would you have made more money from K Pop Demon Hunters if you'd released it in theaters?

A (22:18)

I don't think so. At the end of the day, I mean, it's worked incredibly well for, for us. I mean, if you cherry pick it and I don't. I don't know. Maybe I don't. You know, does it really matter, though? But that doesn't. That would not be a reason to go change the strategy. So that's probably the more fundamental question.

B (22:32)

You've got a bunch of merch and Halloween costumes and stuff at one more K pop Question. Has anyone approached you about a theme park attraction tied to.

A (22:42)

Not that I'm aware of. I bet you it's happened, though, you know, and I mean, and you know, we're doing these nets that are very.

B (22:48)

Delicate way of saying it's happened, but I'm going to, because I'm far enough removed from it, I'm not going to touch that.

A (22:53)

I don't actually know. So I'm legitimately telling you I don't actually know, but I wouldn't be surprised if it hasn't happened. But we've got these Netflix houses that we're building now, which would be the kind of places where we want to put those kind of experiences in.

B (23:04)

Will Netflix syndicate its programming to third parties within the next three to five years?

A (23:09)

I doubt it. I don't. Just. I don't think there's a lot of value in it, and I'm not sure why we would do it.

B (23:15)

Okay, last one. Who's a better tennis player, you or Bill Gates?

A (23:22)

You're really putting me on the spot. I think I'm a pretty good tennis player.

B (23:26)

That is not an answer to the question. Greg, thank you very much.

A (23:30)

Thank you.

B (23:33)

There are two kinds of people in the world. People who think about climate change and.

A (23:37)

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B (23:43)

Heard of, like Bill Gates.

A (23:44)

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B (23:51)

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A (23:59)

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