It’s Always Been About More Than Numbers. No Matter How Much Sh-t Is Being Flung

Ted Sarandos had the cameras turned on him yesterday at the Bloomberg Screentime Conference, hours after he apparently led the Gang of Four ostensibly attempting to work a deal with the union that represents those who do it best out the door in a hissy-fit that have now stalled negotiations and has yet again brought out strikers in droves, including many from the WGA who continue to join them in solidarity while they theoretically should be hard at work on the lines they speak.

And a delivered a performance that, while I’m pretty sure in his mind and to perhaps those in the investment community that were most likely to be in Bloomberg’s minute audience seemed earnest,  exemplfied exactly why he’s an amateur in the art of convincing the public he’s someone to root for.  Per THE WRAP’s Loree Weitz:

(Sarandos) cited an added levy based on subscribers the actors guild proposed, saying that was a “bridge too far” compared to the studios’ original offer of a “success-based bonus.”  “What happened last night is that [SAG-AFTRA] introduced basically a levy on subscribers on top of this deal,” Sarandos said at the Los Angeles event. “A levy on top of our revenue or per subscriber, with no insight into the revenue per subscriber or anything, we just felt like a bridge too far to add this deep into the negotiation.”

From a man who in a down year will see his personal compensation drop roughly -20% to approximately $40 million, per CBS News, it’s easy to see why this qualifies as performance art, poorly and tone-deafly delivered though it was.

Sarandos’ crocodile tears come from a rash of brazen and arrogrant business decisions, such as ordering nearly 1900 original series in a decade and the outright purchase of soundstages around the world to assure they get produced post-haste. and the work of many to uncover that the actual reception to all of this may not quite be the narrative he has represented to that investment community, let alone those that worked for him.  What he asserts is transparency by providing top ten lists in detail on a timely basis, for every territory and content iteration in his catalogue, is limited to only those shows that do work, and with ever-changing definitions to the metrics used to create them.  And when it comes to the AVOD business he grudgingly embraced, one that he blew up only months ago, it was especially delicious to see Sarandos flail for words as Weitz’ colleague Lucas Manfredi reported:

While Netflix’s ad-supported tier has surpassed 10 million monthly active users globally, the streamer’s co-CEO Ted Sarandos acknowledged Thursday that the offering is still in its infancy and “definitely not at the scale that we want it to be at yet.”

“We’re a year into it. Jeremi [Gorman], by the way, did a great job getting us to where we’re at today,” the executive told Bloomberg’s Screentime conference on Thursday. “What we have to do, by the way — not just us, all these platforms that have added an ad option — they’ve all got to do the same thing, which is you have to get that tier at scale and grow that at scale with fans and viewers.”

Last week, Netflix announced that Amy Reinhard would take over as president of the ad business, with Gorman set to exit. Following the announcement, the Information reported that the shakeup was part of an effort to speed growth in the ads business.  “We’re super excited about Amy Reinard coming in. She’s a veteran at Netflix who understands all the complexities of growing new businesses at Netflix,” Sarandos added. “So you should look at it as a doubling down, not a failing and moving on and it’s new. So we’re definitely in our infancy and it’s definitely not at the scale that we want it to be at yet and consumers have to choose between it.

You SHOULD look at it that way, just as SAG-AFTRA SHOULD have accepted AMPTP’s offers, especially after the WGA settlement.  But the reality of any rewards based upon performance cut deeper into the earnings of someone like Sarandos when the membership size of SAG-AFTRA is factored in.  Paying 160,000 people a success-based bonus is more costly than paying 12,000.

But Teddy is particularly rankled by the prospect of paying those performers for shows they may have happened to put blood, sweat and tears into that didn’t make his arbitrary lists, as our friend Rick Ellis of TOO MUCH TV reported:

According to sources, SAG-AFTRA’s latest counter (which was presented on Monday), discarded the revenue share in favor of a “viewership bonus,” which would divvied up proportionally to all covered participants. AMPTP hasn’t responded to that proposal officially and I haven’t seen the specific details of the proposal. However several studio sources I spoke with described the proposal as being “overly broad” and argued it “rewarded cast on shows that didn’t perform well in the marketplace.” From what I can tell, the viewership bonus would be paid on all programs drawn from a per-subscriber fee from each service, which the studios see as unfair.

It’s debatable whether SAG-AFTRA’s ask is indeed a bit too much; after all, this has never been a business that typically rewards failure.  But the definition of failure is as arbitrary as the metrics Sarandos’ team puts forth to define it.   And what is exceptionally clear is that Sarandos in particular is absolutely petrified at the prospect of anyone finding out the majority of those 1900-ish series have cumulative audiences well below what he would like the investment community to believe, some perhaps even smaller than the size that watched his own struggling yesterday.  Particularly the part where he attempted to spin the 10 million global MAU capable of receiving ads as a win, especially in light of how small a percentage that is of Netflix’s paid subscriber base–the one where prices are expected to rise once there is a settlement with SAG-AFTRA, and in light of Amazon’s move to convert their 67 million into an ad-receivable base by reversing Netflix’ strategy.

It’s almost ironic that as it becomes clearer how Sarandos values human beings, the announcement that they were rescuing the animated STAR TREK: PRODIGY from Paramount+’s own economic meltdown dropped.  Because pixels don’t protest quite as loudly or cross too many bridges?

No, Teddy, we don’t cry for you.  You know damn well what you’re doing.  Because you’re actually one of the few that does have someone smart enough on their team to tell you that, assuming you’re willing to listen.

Sarandos was smart enough to hire former ABC scheduling guru Andy Kubitz for a strategic role, a rare move for streamers (and even some big media companies) hell bent on utilizing algorithms and big data to make up their minds.  And we know that because while all of this high-level wrangling was unfolding, many people I personally know were engaged in debate within DEADLINE and LinkedIn’s walls.  And it took the esteemed Preston Beckman to unmask himself and write a guest column to bring to light exactly why, more than ever, people like Kubitz, as well as those mentioned in an article dropped earlier this week by Lynette Rice, are needed.

Beckman, who I consider a personal friend and inspiration, now regularly writes and speaks about the value of having people who not only know numbers but how to best interpret and act upon them.  The full response he authored is more than worth your time to read and ponder. Unsheathed by retirement, perhaps ignited by how poorly his beloved Dodgers underperformed as they were eliminated by Arizona in baseball’s post-season, he fired back with not only his own views, but those expressed by a former Discovery executive who, indeed, brought to light a manifesto for the kind of work she does, that I have done, and we all aspire to do again, if only people would a) be wise enough to afford those opportunities and b) pay attention.   And make no mistake, Beckman’s criticism of those who don’t is more than justified:

The issue moving forward are the goofballs who are running this business into the ground because they worship the streaming gods. I’m no rocket scientist but if you followed me on the hellsite and now over at Mastadon, you know my mantra is “all television regresses to the mean.” By that I mean that everything the streamers rejected about conventional television is now becoming part of the streaming world .  Cord cutting was cool. Now streaming is becoming more expensive than the legacy delivery systems. It’s all regressing to the mean.  Rather than scheduling on its last legs, maybe it’s due for a renaissance. The titles will change but the people who have the skill set, the brains and the temperament will help to make sense of the current insanity.

I’ve gone on record saying that I actually have envied those on the picket lines because at least they have a union trying to fight for their rights.  Folks like schedulers and strategists and yes, researchers too (not bean-counters), don’t have that.  Beckman and Burns have at least provided some necessary virtual solidarity that I own to being a part of.  Kevin Levy and I actually spent time yesterday to discuss next moves.  Boy, I needed that more than ever.

What we need more is more companies to own up to the impact of their self-inflicted wounds and at least allow themselves to be saved by more than just whining and posturing at business conferences and firing executives who couldn’t live up to impossible standards of success.  Again, credit to Sarandos for at least having such a person in his employ.  He absolutely needs to at least run his public statements by him–and shame on him if this is how he comes off if he did.

Beckman’s parting shot was especially delicious:

Imagine a room full of baboons throwing their shit against the wall, hoping that something sticks. Now multiply that by about six. If you introduce a scheduler to the room, I guarantee you, far more shit will stick.

You know, I’m told agitated bears tend to fling shit as well.

Until next time…



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