TheGrill: Sarandos Says Netflix Won’t Replace Basic Cable

At TheWrap’s conference on media and the entertainment industry, TheGrill: sports and other live events that cable service programming services hang their monthly bills on; “We’re complimentary to cable,” he explains


Good news, major cable and satellite service providers: Netflix isn't coming for your lunch.

As for entrenched pay-cable networks? Well, you might want to watch your back.

Culminating a busy several months of dealmaking with a one-one-one interview with All Things Digital's Kara Swisher at TheGrill on Tuesday, Netflix chief content officer Ted Sarandos dispelled the notion that the DVD and streaming service is trying to build itself into a replacement for basic cable services.

"The thing we don't do is the thing people want cable for, which is events like sports and 'American Idol,'" Sarandos said. "We're not in that business at all. We're really complementary to cable."

Might Netflix acquire get into sports, then? Not likely.

"I just don't see what we could add to it," Sarandos told reporters following the panel.

Of course, with deals signed within the last year to stream first-run movies from pay-cable services including Starz and Epix, as well as Relativity Media, Netflix — which currently counts 15 million subscribers — sees an opportunity to grow into a U.S. premium television subscriber base that now totals 50 million.

"There's enough growth opportunity in the space we're in," he noted.

With more than 60 percent of Netflix subscribers now using its streaming services, Sarandos said Netflix also has no plans right now to try to participate in premium, theatrical-concurrent digital windows that studios including Fox and Sony are trying to establish.

"We're happy to come in after that (window)," Sarandos noted.

Addressing a wide range of other issues, Sarandos described the dealmaking with Relativity as being quick and somewhat painless, noting, "The time between (Relativity CEO Ryan Kavanaugh) and I first talking about it and the actual signing of the contract was only about five weeks, and that was right in the middle of Cannes. We sat down and really cranked it out. We brought both sides to the table, and we made it work."

He also agreed with a point Kavanaugh made on earlier panel, noting that HBO's broad pay-TV contracts with the studios are restricting their ability to establish new digital distribution windows.

"The way HBO's pay-TV contracts are drawn up are overly restrictive in regard to VOD," he noted.

And while touting Apple's iPad as an effective device for video viewing, Sarandos downplayed the relevance of distributing video via mobile devices like smart phones.

"Mobile viewing is interesting and fun for maybe five minutes," he said.