It was pretty much the year of Netflix in 2016. Claire Foy’s Golden Globe-winning turn as the Queen in The Crown got people through the dreary Christmas schedules, Black Mirror returned to the screen, Stranger Things was an odd sort of 21st-century family viewing and folk became addicted to Narcos.
It’s strange to recall that until four years ago, the company made no original content. When Netflix launched House of Cards in 2013, it was a curiosity; but when the company boosted its 2017 programming budget to $6bn, it became the second largest commissioner of programmes in the world, after ESPN.
If that is astonishing growth, the scale of Netflix’s ambitions for 2017 is almost unhinged. The company is promising more new shows than there are days in the year: 400 original launches across movies, documentaries, feature series, children’s programming and shiny-floor competitions. It kicked off with its adaptation of Lemony Snicket’s A Series of Unfortunate Events this weekend — the most expensive show it has made to date.
Based on the bestselling novels, this camped-up steampunk-meets-gothic melodrama follows orphans Violet, Klaus and Sunny Baudelaire as they try to escape the clutches of the dastardly Count Olaf while trying to uncover the truth about their parents’ deaths in a fire. Snicket, represented by his public persona, Daniel Handler, was characteristically withering when I spoke to him.
“Netflix began to be a successful company, power went to their heads, they lost their minds and began to acquire the rights to upsetting and harmful material such as my own work,” he says over the phone from San Francisco, in a laconic impersonation of his nom de plume. “Before long, they were spiralling down into an ever-increasing pit of misery. Anyone who has followed history knows that when you get confident and begin to brush up against terrible things, before long it has all collapsed.”
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That collapse is some way off. Last year, Netflix had 17 shows nominated for 54 Emmy awards and offered services around the world to 86.7m subscribers. There’s really only one person to thank/blame: Ted Sarandos, its chief content officer. When we meet in his room in a Covent Garden hotel — “I always stay here,” he explains conspiratorially, “because of the Monmouth Coffee Company over the road” — he is dressed in a suit, with neatly combed hair, and talks in a soft, inquisitive voice.
Netflix has long claimed that his commissioning is all down to algorithms and data. When the company decided to bid for House of Cards, Sarandos looked at how many subscribers watched political dramas, and how many were die-hard fans of David Fincher and Kevin Spacey. On the strength of that, he offered to commit to two full seasons at a cost of $100m, without needing a pilot. “There were 100 reasons not to do this with Netflix,” Sarandos says. “We had to give them one great reason to do it.”
At the Sundance film festival in 2015, Sarandos was challenged on his data-trawling techniques by the American academic Tim Wu, who noted that most of Netflix’s biggest-budget, highest-profile shows involved a cult creator — from Fincher’s House of Cards through to Charlie Brooker’s Black Mirror. Was Netflix’s algorithm actually Ted? “In practice, it’s probably a 70/30 mix,” Sarandos admitted. “Seventy is the data and 30 is judgment — but the 30 needs to be on top, if that makes sense.”
Sarandos’s judgment has been at the core of Netflix’s success since he joined the DVD mail-order business in 2000. One of five children, the 52-year-old grew up in a chaotic home in Phoenix, with an electrician father and stay-at-home mother who left the TV on all day. “My parents were very young and we were kind of raised by wolves, but TV gave me a structure, a schedule,” he explains, with no trace of irony. “I knew when things were on, and I situated my weekends and nights around it.”
Before setting out to destroy that structure, he studied journalism and worked in a video store part-time to pay for college — as for the similarly employed Quentin Tarantino and the director of Clerks, Kevin Smith, the store provided the better education. “In those days, a video store was empty all day — all the business would be in the last three hours,” he says. “So I watched nearly everything. That became my film school.”
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It also delivered a revelation that still shapes the Netflix business model. “I’m a big Woody Allen fan,” Sarandos grins. “It used to make me crazy that you couldn’t rent out a tape of Woody Allen’s movies enough times to pay for it in the store. There’s plenty of Woody Allen fans in the world, but not enough near most stores. I thought, you could have 1,000 Woody Allen movies in one store in the middle of the world, but if you put 1,000 tapes in 1,000 stores, they don’t make money.”
Sarandos and the algorithm face challenges this year — Amazon’s rival streaming service has bumped up its original programming, and HBO is rolling out its own service, HBO Go, around the world. Suppliers of movies and TV to Netflix are pulling their content as contracts come up for renewal — partly because the original deals were priced in Netflix’s favour, and partly to secure material for streaming operations of their own.
All of which could herald yet another golden era for subscribers. Or, as Eric Schrier, FX’s president of original programming, warns, we could be entering the era of “peak TV”.
“This arms race is just producing too many shows for people to watch,” he says. “We had 455 new scripted shows on American television in 2016, and it looks like 500 for 2017. I don’t think there’s a business for everyone. I think you’ll see streaming services cutting back and merging. This can’t go on — and experienced broadcasters will win out.”
FX picked up the most Golden Globes last week, with four. Netflix won two —best TV drama series for The Crown; best actress for Foy. The streaming service can’t afford to lose momentum: Sarandos relies on rapid growth to cover his escalating investments. He remains sanguine.
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“Peak TV is falsely measured against the old model of television, when households only had 24 hours to watch,” he says. “Now everyone is on their own schedule, you might have 72 hours of watching every day in one household. At the video store, I got very good at saying ‘If you liked that, you’re going to love...’ Customers would wait in line for me, even though someone else was free to help. ‘I’ll wait for Ted because I want to ask him.’ Netflix is just scaling that to reach the whole world.”