Sarandos: No Vertical Integration for Netflix

Netflix chief content officer wants to keep exclusive content for itself
Ted Sarandos 2 400x300.jpg

Netflix chief content officer Ted Sarandos said the subscription video on demand pioneer isn’t particularly interested in being part of a bigger company, mainly because it wants to keep its internally produced content to itself.

“We have been maniacally focused on building a great SVOD product,” Sarandos said at the UBS Global Media and Communications conference in New York.  "We sell customer satisfaction in a way that I think big companies are unable to because they have so many competing interests.”

Vertical integration, the practice of owning distribution as well as content, has re-entered the spotlight in the wake of AT&T’s pending $108.7 billion purchase of Time Warner Inc. 

Federal programming access rules prohibit content companies from providing exclusive programming or lower pricing to their parent firms, although some believe President-elect Donald Trump’s new administration could relax those rules in the future.

But for now, Sarandos said it’s better for Netflix to stick to its own knitting.

“Just think of one company that has one division buying programming and another division making programming and they can’t sell to each other,” Sarandos said. “That happens a lot. We don’t have any of that conflict. Even as we build Netflix studios, I have no intention of building it and selling our content to other people. I want it as a production entity for Netflix.”

Netflix is expected to make a big bet on reality programming next year, as Sarandos said about 20 different series in that genre are slated for 2017.