Netflix’s Ted Sarandos on Expanding Animation, Global Vision

Ted Sarandos is not much for change, personally.

It’s a funny thing to say about the recently minted co-CEO of Netflix, one of the entertainment world’s biggest disruptors, but as he points out, he’s had only “two cars and one job over the past 20 years.”

“I am one of those folks who ends up doing things a long time, so I’m not one of these people who flips things easy,” he says with a laugh.

His previous car, which lasted 11 years, was an Acura MDX; he drove around a Ford Explorer for a decade before that. The job, of course, is at Netflix — the streaming giant that has shaken up how Hollywood does business and how the world consumes entertainment.

Even so, when Sarandos joined Netflix in 2000 as a DVD buyer, he didn’t quite think about whether he might someday wind up running the place alongside co-founder Reed Hastings.

“When I look back, I don’t think I ever thought about things in those terms. Like, ‘What’s the 20-year horizon on this decision?’” he says. “It felt to me like Reed and Netflix were going to make an enormous difference in the world. I wasn’t sure exactly what shape that would take or the timeframe it was going
happen [in], but I was super confident that it would.”

Netflix now holds the throne as the dominant streaming platform in the American marketplace, with more than 60 million paying subscribers stateside (193 million total subscribers worldwide). Respected creators such as “Grey’s Anatomy’s” Shonda Rhimes and “American Horror Story’s” Ryan Murphy — and more recently, former U.S. President Obama and first lady Michelle Obama — have inked multiyear deals with the streaming service.

And so, for his impact on the business, Sarandos has been selected to receive Variety’s Vanguard Award at Mipcom, an honor that hails those in the industry who have made a significant contribution to the global business of entertainment.

During his pre-Netflix days as an executive at video rental chain West Coast Video, Sarandos remembers when a different technology came along to shake things up: DVDs. An industrywide shift from VHS tapes to DVDs should’ve been a “no-brainer,” he says, but the VHS revenue-share deals with studios complicated things for national competitors including Blockbuster, putting Sarandos “uniquely in a position to react.”

Swiftly tackling the migration from VHS to DVD at his former place of employment is in many ways not so different from his handling of Netflix’s shift from DVDs to streaming. Both underscore the idea that it is not prudent to have a company too mired in a legacy business.

Sarandos notes that when, in the first four years that Netflix offered DVD by mail, “I don’t believe Blockbuster even had a DVD on their shelves. So people talk about us competing directly with Blockbuster, but we really were competing for the next generation of consumers.”

(Of the current state of Netflix’s DVD-by-mail business and the public’s propensity to occasionally remember its existence, Sarandos says, “That’s about how I think about it too. It’s just still there.”)

That fast-moving, Silicon Valley-style approach has helped Netflix to subvert legacy Hollywood thinking and establish a solid footprint in the industry over the past decade, all the while becoming a content-creating studio unto itself.

To that end, Sarandos’ management style is a little more rock-and-roll than the studio and network power structures of old. He often touts the vast greenlight power he offers his executives to bring movies and series to life.

“The thing I knew right away was if we were going to really realize this global vision that we had, that you have to be very careful about not bottlenecking decision-making,” he says. “My role went from picking all the programming that used to be on Netflix to picking the people who pick the people who pick the people [who pick] what goes on Netflix.”

The key is not having “some false sense of yourself that you have to have your fingerprint on everything that happens,” he adds. “You just can’t scale the organization that way.”

Netflix burst onto the original programming scene in 2013 with an initial slate that included “House of Cards” and “Orange Is the New Black.” Now that it has developed a robust pipeline of original content, the company is seeking to burrow deeper into non-U.S. markets with local-language originals made to attract subscribers the world over.

Animation is another such area that Sarandos is focused on making bloom at Netflix, and delegating work is the only way that he believes he can make that happen in rapid fashion.

“Our animation ambition right now is not just to step up and be as big as someone who’s doing it today — we’re on a path to be releasing six animated features a year, which no major studio has ever done, on top of the very healthy slate of animated series,” says Sarandos. “The way we think about those things is not to say, ‘Well, how do we do it like someone else has done it?’ Because no one’s ever really done most of these functions at the scale that we’re doing, and the only way you could do that is to have a really trusted team, who will make decisions and take them seriously and own them.”

Sarandos misses the days when he would read every draft of every script and watch every cut before it went online, but now there are shows on Netflix that he sees for the first time alongside subscribers. In his view, it’s a necessary step.

“I do think that that’s just something that would be untenable for some creative executives. But I think it’s the only way we could do what we’ve done.”

Sarandos’ faith in his executives’ talents is steadfast. Take former CBS and Universal Television exec Bela Bajaria, who in four years has rocketed from working in unscripted to leading local-language originals to becoming Netflix’s head of global TV. After Bajaria was ousted as president at Universal TV in 2016, Sarandos quickly came knocking with a position in unscripted, a division with which she had little track record.

“When he did it, I was struck by how refreshing, how bold, how confident [it was]. Like, ‘Let’s just do it. I believe you can do it,’” Bajaria told Variety in July. “It’s very inspiring in a way. And what it does is it allows people to learn different things.”

Conversely, the company is known for shuffling and reshuffling its executive deck when it sees fit, cutting loose even longtime lieutenants to better serve its goals. Netflix in early September announced the abrupt exit of Cindy Holland, Sarandos’ first hire in Los Angeles in 2002, back when Netflix’s Southern California outpost consisted of the two of them in a small shared office in Raleigh Studios. Holland is largely recognized for her key role in shaping the streamer’s original programming slate into what it is today. Sarandos said in a statement that since becoming co-CEO, he had wanted to simplify the way the company’s content teams operate, with one head of film and one head of TV. The new structure meant there was no role left for Holland.

The move recalls the philosophy of Netflix co-founder Hastings, who elevated Sarandos to co-CEO, and his wellknown “Keeper Test.” It’s “super simple,” Hastings told Variety in September. “It’s, ‘Would you keep the person if they wanted to leave?’”

When asked how his leadership style compares to Hastings’ methods in light of the recent executive changes he’s made, Sarandos has this to say: “The thing that I always do is constantly think about the next two years, and, ‘Is this organization most suited for the next two, five, 10 years?’ And the answer is not always ‘yes,’ meaning that the priorities of the business shift.”

That method has served the company well, he says.

“Sometimes it’s not always just, ‘Is this person the best person?’ It’s ‘Is this the best person for the next 10 years?’ And I think that’s a question we’ve probably all asked about ourselves at any given point in our careers,” he explains.

Netflix continues to move fast even as the entertainment landscape around it shifts into full streaming wars mode, newly populated by Disney Plus, HBO Max, Apple TV Plus, Quibi and Peacock.

Sarandos gamely finds it “refreshing” to see added competition in the game. With the U.S. streaming market ever nearing saturation, no doubt some of his comfort with the playing field comes from the wide head start that Netflix has had in acquiring customers and building production hubs internationally from which to produce local-language content.

“I’m excited about the future,” he says. “I think it’s great that there’s more people doing what we’re doing, because I think it keeps us sharp.”

And while he acknowledges the seriousness with which Disney is treating the endeavor — having “Mulan” bypass a theatrical release and sending it straight to steaming is no small decision — Sarandos believes that at this stage, “everyone’s level of commitment still needs to be defined.”

“There’s still a thing called Disney Plus, it’s not just all called Disney,” he says. “There’s still HBO Max [and] HBO. As soon as it’s one big HBO, you’ll know that they’re taking that really seriously. Everyone’s at a different life cycle with a [different] level of commitment to the next phase of delivery to consumers.”

For now, when asked to reflect on the legacy he hopes to leave behind, the Netflix co-chief circles back to his passion for storytelling.

“If I was able to create an environment where people can tell stories that really matter to people, that they remember and keep that alive and always put the creative first, I think that will be a great legacy,” he says.

Sarandos points to prolific 98-year-old producer Norman Lear and “Saturday Night Live” creator Lorne Michaels as iconic storytellers whose work has shaped popular culture and the business in profound ways.

“The idea that they’re still around, that they’re not faces on Mount Rushmore — they’re people I have dinner with sometimes — to me, that is mind boggling. And I hope that at some point in my life, that I could be that for somebody else coming up and wanting to dislodge something I created.”

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