Mogul Memo: How Ted Sarandos Can Save Hollywood

Dear Ted,  

I would never be so indelicate as to suggest you use your position as chair of the Academy Museum to influence what new categories the Academy Awards recognizes. However, if there were an Oscar for Lead Actor in an Earnings Call, you would win this year.

Your performance last week on the Netflix second-quarter powwow was spot-on for the way you tackled the Hollywood labor dispute with a sense of humanity. You poignantly referenced being raised in a household impacted by strikes because your father was in an electricians’ union.  

It was an anecdote very much consistent with the Sarandos brand, which, while you’ve made ungodly sums at Netflix, has always retained a certain ham-and-egger humility. After all, your career began as a mere video store clerk (just like Quentin Tarantino!). You’re no born-with-a-silver-spoon-in-my-mouth kinda guy, and the guilds need to know someone still in touch with the common man is lurking somewhere behind the other side of the negotiating table. 

So when you tell investors, “We’re super committed to getting to an agreement as soon as possible — one that’s equitable and one that enables the industry and everybody in it to move forward into the future,” it radiates a distinctly Clintonian “I feel your pain” vibe.  

Were your remarks a cynical PR ploy derided in some quarters? Sure, but at least you bothered to try. That’s more than I can say for Bob Iger, whose CNBC interview the previous week from Sun Valley, in which the Disney CEO dismissed picketers’ concerns as “unrealistic,” came off as spectacularly tone deaf.

New to VIP+’s Mogul Memos? Check Out Bob Iger’s From July 14

His statement triggered SAG-AFTRA president Fran Drescher to suggest Disney should keep Iger “locked behind doors.”

Kerosene, meet match. 

We’ve got ourselves a bad situation here, Ted. But you already knew that, because Netflix had been demonized long before these strikes were called. Your company has loomed as the Evil Empire from the very beginning of this conflict.

But Iger suddenly cast himself against type as Darth Vader. Hopes had been high he was going to step into the leadership vacuum and be the savior the legendary Lew Wasserman once was in past Hollywood labor stalemates. But that’s looking a lot less likely now that Iger blew himself up in Idaho. 

So how about you as the savior?

Hear me out. First of all, whatever brownie points you thought you scored by saying you were “super-committed” last week aren’t going to last long.

SEE ALSO: David Zaslav’s Mogul Memo, June 14

And talk is cheap. For instance, I couldn’t help but laugh at the part of Netflix’s Q2 investor letter in which your company pats itself on the back for recent adjustments made in the manner viewership numbers are disclosed in its Top 10 rankings, going so far as to chastise your rivals for not doing same. 

“We hope that other streamers become more transparent about engagement on their services over time,” the letter reads.

Forgive me, but expanding the measurement window from 28 to 91 days is just the latest in the seemingly endless series of incremental metrics changes Netflix has made periodically over the years. This gradual loosening of the triple knot on the company’s data kimono has played out so slowly I’ve tired of the elaborate striptease.

But now it’s time for the full monty, Ted.

To demonstrate how truly “super committed” you are, you need to take bold action. Make the unprecedented concession of setting a template for other AMPTP members: Get them to agree to a realistic set of data that either all streamers like your own will disclose or that a third-party like Nielsen can report so a fair residual system can be imposed.

Because one of the biggest complaints all of the streamers — Netflix included — hear is that the producers who work for them are kept largely in the dark about the very viewing data that should be used to determine the residuals they receive from their programs.  

For the record, a rep for Netflix insists the company does just that: “We do share viewing data with filmmakers/creators/showrunners on a consistent basis.”

But the issue for all streamers is there is clearly an absence of any set formula where producers obtain a mutually agreed upon set of data points about a show’s performance over the span of its run. It’s a subject my VIP+ colleague Tyler Aquilina has analyzed tirelessly.

Think of it this way: If you don’t do it for your fellow AMPTP members, who desperately need someone to set the tone for the painful choices that must be made in order to get somewhere on a path to resolution that could end these strikes, do it for Netflix.

Fair or not, your company could use some image rehabilitation in Hollywood right now. Be the one to get the credit for making the grand gesture at a time when you’re sitting on enough free cash flow to be able to afford such a gesture. Costly? Maybe, but think of it as paying a hero tax.

Just imagine the goodwill you’ll earn with the talent community alone. Think of all the marketing dollars you’ve spent in recent years trying to rack up big Oscar wins that would be a magnet to get the best actors and directors to come work with Netflix. This could be an even more effective way of currying favor with talent. 

Finally, I say you need to look at this moment through the prism of your own legacy.

Reed Hastings put Netflix on the map — no one can ever take that away from him. So what are you and co-CEO Greg Peters going to be remembered for? Hopefully the next phase of company growth — and 62% growth of the stock year to date is a great way to start.

How about also being known as the man who broke the logjam to save Hollywood? Not a bad feather to stick in your cap.

Then again, it’s not what you say that will make it happen. It’s what you do. 

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