Netflix co-CEO Ted Sarandos explained in a recent interview how he got his start in the entertainment business and revealed a key lesson from legendary crooner Tony Bennett.
In a wide-ranging chat on Bloomberg TV's "The David Rubenstein Show" this past week, Sarandos offered some details on his transition from an aspiring journalist to video store clerk and eventually to the streaming-video giant.
Growing up in Arizona, he said he wanted to be a journalist even as he loved movies and TV, which also portrayed news hounds as heroes. He was editor of the campus newspaper in high school and in community college.
"But I also had an epiphany during that time that I wasn't a very good writer, so likely I was not going to be a professional journalist," Sarandos quipped.
Meanwhile, he also had a job working at a video store, where he began as a customer devouring all its titles. During his shifts as a clerk, he had the opportunity to watch even more movies. Eventually, he became so knowledgeable about films that customers waited in line to get his recommendations.
After a while, the store's owner wanted to spend more time with his family and asked Sarandos to take over management of the business, which had grown into a chain.
"It was an MBA course and film school all wrapped up into one for me," he said.
From there, he got into a home-video distribution business that sold DVDs and VHS tapes to video stores. That's when he crafted what was a unique deal at the time involving revenue sharing of DVDs.
A 1999 news article about the deal in trade magazine Variety caught the attention of Netflix cofounder Reed Hastings, and a mutual friend introduced them.
Of course, Netflix has since grown into an entertainment juggernaut as well as a textbook example of a Silicon Valley disruptor that has transformed the industry and forced studios to launch their own streaming services to compete.
Its massive development budget sends ripples through Hollywood, and the company is expected the spend $17 billion this year on content, with the vast majority on original material.
In 2020, Sarandos was promoted from chief content officer to co-CEO. In 2023, Hastings stepped down as the other co-CEO to serve as executive chairman, with Greg Peters elevated from COO to co-CEO.
Later in the interview, Sarandos was asked what he would like his legacy in the entertainment industry to be. "The guy who put the audience first," he replied.
Noting that the late Tony Bennett was a good friend and hero of his, Sarandos recalled an important lesson from the singing icon:
"The audience is the most important member of the band," he said. "And I feel like one approach that we put into Netflix and into the programming and into our films and TV and our games is that we put the audience first and think about how are they going to love it—first. We'll build a business model around it."
