Netflix explained why its movie selection has gotten so skimpy

Ted Sarandos
Netflix head of content Ted Sarandos Cindy Ord/Getty Images

No matter what movies Netflix has on its service, subscribers spend about a third of their time watching films on Netflix, according to the company’s content boss Ted Sarandos.

On Monday at the UBS Gobal Media and Communications conference in New York, Sarandos was asked about the perceived sparseness of Netflix’s movie offerings. “No matter what, we end up with about 1/3 of our watching being movies,” he responded.

Sarandos cited two contrasting examples: the US and Canada. In Canada, Netflix has five major movie studio output deals, while in the US, it basically has none, with the exception of the just-starting Disney one. And yet in both places, Netflix sees about 1/3 of its viewing being movies.

Research earlier this year showed that Netflix’s selection of IMDb’s 200 highest-rated movies had gone down in the past two years by a substantial amount, as had its total catalogue of movies. And given what Sarandos revealed Monday about the viewing habits of Netflix subscribers, that decision makes total sense. Why would you pay a bunch of money for blockbuster movie deals if it’s not going to make people watch more Netflix?

The future of movies

Sarandos went on to say that Netflix needs to find a way to really differentiate itself in the movie business.

If you take a film that that does well at the box office, and get it 7-10 months later on your streaming service, that’s not going to create a ton of value, he explained. “If you were passionate [about the movie], you’ve already seen it,” he said. Netflix is “happy to have” some of those movies, but the audience isn’t particularly passionate (hence the “1/3 no matter” what pattern).

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Disney’s ‘Moana’ Walt Disney Animation Studios

But there are ways Netflix can elevate its movie strategy.
An exception Sarandos pointed to was Disney, which puts out movies people like to watch over and over again, he said. The new Disney deal is a chance for Netflix to shine. He also mentioned Netflix’s original film strategy, which is still in its early stages. He said he wanted Netflix to put out original movies people would go to see in theatres, and pointed to the new Will Smith vehicle “Bright” as a big test. That’s a movie you’ll be able to see on Netflix the day it comes out.

The bottom line: Netflix still seems to be experimenting with how to make a winning movie strategy that fits the company’s goals and bottom line. And if you’re a movie buff who has felt like Netflix hasn’t exactly been catering to your interests in the past few years, you’re not imagining things.

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