At a Fast Company Innovation Festival held in Manhattan on Wednesday, Netflix co-CEO Ted Sarandos made a significant statement regarding the ongoing strikes by writers and actors, addressing one of their primary concerns: the lack of access to viewership data for their own shows. Sarandos responded to this issue by calling on Netflix’s streaming competitors to follow suit and release their own viewership numbers to create a more transparent and equitable industry.
During his talk, Sarandos expressed understanding of the frustrations voiced by talent in the entertainment industry, saying, “It’s understandable that people feel left in the dark about how well their work is performing. That’s why we’re taking this step—to provide more transparency.” This call for industry-wide transparency comes as Netflix prepares to release viewership data for its top-performing shows, a move that is part of the company’s biannual data dump, scheduled for Thursday. Sarandos stressed that releasing this data is essential for writers, actors, agents, and even the press to have a clearer understanding of what is considered a hit and what is not.
In an industry that has historically been secretive about performance metrics, Netflix’s decision to release these numbers marks a significant shift. Sarandos acknowledged that the previous lack of transparency wasn’t fair to those who created the content. “This is our answer to those saying, ‘Hey, I don’t really get to see how my stuff does.’ And I agree—that was unfair,” Sarandos said.
The release of these viewership numbers will serve multiple purposes, according to Sarandos. He explained that these figures will allow creatives to see how their shows and films are truly performing. It will also give agents the information they need to negotiate better deals and ensure that the press can accurately report on which shows and films are performing well. Sarandos added, “This idea is that the number is out there so that talent can see it, so that agents can see it, so that the press can see it and know what’s a hit and what’s a miss.”
Netflix’s Effort to Set a New Standard for Transparency
In response to criticism over the streaming giant’s data-sharing practices, Sarandos made it clear that Netflix is striving to be as open as possible about its performance metrics. “I don’t think we could be any more transparent than this,” he asserted, referring to the upcoming release of viewership numbers.
However, when asked about Netflix’s decision to stop reporting subscriber numbers starting in 2025, Sarandos offered a more nuanced explanation. While viewership numbers are set to be released regularly, subscriber counts—a traditional measure of success in the streaming industry—will soon be omitted from Netflix’s regular reports. The reasoning behind this shift, according to Sarandos, lies in the changing nature of the company’s business model. As Netflix now offers multiple subscription tiers at different price points, subscriber numbers no longer provide a straightforward correlation to the company’s overall revenue and profitability.
“The subscriber metric made more sense when every customer was paying the same amount,” Sarandos said. “Now, with different tiers and price points, it doesn’t tell the whole story of how well Netflix is performing.” Still, Sarandos reassured audiences that Netflix, which currently boasts 280 million subscribers globally, will continue to share these numbers on specific milestone occasions.
This decision to move away from subscriber numbers reflects the broader evolution of the streaming industry. Sarandos explained that as the streaming landscape becomes more competitive, other metrics—like engagement and revenue—are becoming increasingly relevant in assessing a platform’s success.
Record-Breaking Engagement at Netflix
One of the key takeaways from Sarandos’ talk was the rising engagement on Netflix’s platform. In its upcoming report, scheduled for release on Thursday, Netflix will reveal that viewers spent a staggering 94 billion hours watching content during the first half of the year. This number marks an increase from prior reports and serves as a strong indicator of the platform’s continued growth in user engagement. Sarandos emphasized that engagement—measured by the amount of time users spend watching content—is a far more important metric than raw subscriber numbers.
“Engagement probably is the core metric,” Sarandos noted. “It’s how much time people spend watching Netflix that really tells us how well we’re doing.” He added that the increase in total watch time is a testament to the growing appeal of Netflix’s content library, which spans a wide variety of genres, catering to an increasingly global audience.
Sarandos remains highly optimistic about Netflix’s future growth potential. He even suggested that the company could potentially double in size, driven by the introduction of more diverse offerings, such as live events and the company’s recent move into live sports. One of the biggest upcoming events on Netflix’s calendar is the NFL football games scheduled for Christmas Day, which mark the streaming giant’s foray into live sports.
Growth Potential: Aiming for Double the Subscribers
Despite Netflix’s massive subscriber base, Sarandos believes the company is still far from reaching its full potential. He pointed out that although Netflix is currently in 280 million households around the world, this number is significantly lower than the peak subscriber figures seen during the heyday of paid television. Sarandos suggested that Netflix’s superior product and business model could drive even greater growth, positioning the company to capture more of the market.
“If we doubled our current numbers, we’d still be lower than where paid TV was in its prime,” Sarandos noted. “But the difference is we have a better product. Our business model offers more value to consumers, and we’re constantly innovating.”
Sarandos sees a bright future for Netflix as the company continues to expand its content offerings, particularly in the realm of live entertainment and sports. The NFL games on Christmas Day represent a key milestone for Netflix, as they signal the platform’s ambition to become a major player in live sports streaming.
YouTube vs. Netflix: Competing for Screen Time
Another key topic during Sarandos’ talk was the ongoing competition between Netflix and YouTube, one of its main rivals in the battle for viewer attention. Sarandos acknowledged that YouTube is a formidable competitor, especially when it comes to advertising capabilities. While both companies report similar revenue, engagement, and profit figures, YouTube has an advantage in its reliance on user-generated content. This model allows YouTube to avoid many of the financial obligations and regulations that traditional streaming platforms like Netflix face.
According to Sarandos, YouTube and Netflix together account for 20 percent of global screen time, but he remains focused on capturing the remaining 80 percent. “YouTube is definitely more advanced in its advertising capabilities, and because most of their content is user-generated, they have fewer financial obligations,” Sarandos explained. “But our focus is on tapping into the other 80 percent of screen time that we don’t yet capture.”
Sarandos’ comments highlight the increasingly competitive nature of the streaming landscape, with platforms like Netflix and YouTube constantly vying for a larger share of viewers’ time and attention.
Addressing Concerns Over Netflix’s Payment Model for Talent
One of the most significant challenges Netflix has faced during the ongoing strikes by writers and actors is criticism of its payment model. Sarandos directly addressed this issue, emphasizing that Netflix and the creative community are “mutually dependent.” He also acknowledged the nostalgia surrounding the traditional movie industry model, where talent would earn a percentage of a film’s box office success.
However, Sarandos argued that Netflix’s model is more favorable for creatives in the long run, as it shifts more of the financial risk onto the streaming platform. Under Netflix’s payment structure, the company pays for the production of a film or show upfront, including pre-negotiated salaries for talent, as if the project will perform well. This guarantees a certain level of financial security for actors and creators, regardless of the performance of the content.
“There’s a certain romanticism around the old movie model, where actors got paid based on box office numbers,” Sarandos said. “But I believe our model is better, because more of the risk is shifted to Netflix. We pay for the production, we pay the talent upfront, and we pre-negotiate their salaries as if the film or show is going to be a hit.”
Sarandos also expressed his hope that Netflix’s payment model would lead to greater success for talent in the long term. “My goal is that they all get rich and famous,” he said. “We’re trying to provide them the opportunity for that to happen, and if they do their job really, really well, they will.”
A Vision for the Future of Streaming
Ted Sarandos’ comments at the Fast Company conference offer a glimpse into Netflix’s broader vision for the future of streaming. With a focus on transparency, engagement, and continued growth, Netflix is positioning itself to remain a dominant player in the entertainment industry. As the company continues to innovate—whether through new content offerings, live sports, or enhanced viewer engagement metrics—it is clear that Netflix is committed to shaping the future of entertainment.
The introduction of live sports, particularly the NFL games, signals a new chapter for Netflix, one that could further expand its reach and appeal. At the same time, Sarandos’ call for greater transparency in viewership data sets a new standard for the industry, one that could lead to significant changes in how streaming platforms operate moving forward.
As Netflix continues to evolve, Sarandos’ optimism about the company’s growth potential suggests that the best is yet to come. With a massive global subscriber base and a commitment to innovation, Netflix is well-positioned to remain at the forefront of the streaming revolution.
