Netflix at Goldman Sachs Conference: Strategic Growth Insights

On Monday, 08 September 2025, Netflix (NASDAQ:NFLX) presented at the Goldman Sachs Communicopia + Technology Conference 2025. Co-CEO Greg Peters outlined the company’s strategic priorities, highlighting both advancements and challenges. Key topics included content investments, pricing strategies, and the evolving role of AI. The conference painted a generally positive picture of Netflix’s growth trajectory, despite the competitive landscape.

Key Takeaways

• Netflix is focused on enhancing its film and series subscription business through improved content and user experience.
• Recent content releases, like "Happy Gilmore 2" and "K-pop Demon Hunters," have been successful.
• The company is expanding its advertising tier and exploring live events, gaming, and the creator economy.
• AI is a cornerstone of Netflix’s strategy, aiding in content recommendations and personalization.
• Netflix plans to broaden shared viewing experiences beyond sports to include music and comedy.

Financial Results

• Price changes across different markets have met expectations, supporting the company’s pricing model.
• Composite ARPU for ad-tier subscribers is currently lower than non-ad tier ARPU, suggesting growth potential.
• Engagement increased in the first half of the year, with further growth expected; July saw a 40 bps increase in the U.S. and 140 bps in the U.K.
• Content investment stands at $18 billion, underscoring Netflix’s commitment to delivering quality entertainment.

Operational Updates

• A new user interface has been rolled out to 80% of TV-connected devices, showing improved performance.
• Netflix has launched its own ad tech stack across all ad markets and is rapidly hiring to support this expansion.
• AI has been integral to Netflix for nearly two decades, with guidelines now in place for responsible use of generative AI.
• "K-pop Demon Hunters" achieved 266 million global views in 11 weeks, with K-pop merchandise sales up by 80%.
• The World Baseball Classic in Japan is anticipated to be a significant shared viewing event.

Future Outlook

• Netflix aims to enhance its ads business with format innovations and improved targeting.
• Streaming is expected to surpass linear TV as the dominant media form.
• As competitors adjust their strategies, Netflix sees opportunities for growth and investment.
• New model architectures are expected to improve content recommendations and personalization.
• There are plans to expand live content offerings to include music, awards shows, and comedy.

Q&A Highlights

• Greg Peters emphasized balancing content investment with engagement and pricing strategies.
• Netflix’s goal is to help consumers discover new content and ensure accessible pricing worldwide.
• The company is committed to using AI responsibly and effectively.

For more details, readers are encouraged to review the full transcript.

Full transcript - Goldman Sachs Communicopia + Technology Conference 2025:

Unidentified speaker, Host: Okay. All right. I think we’re all going to try to get settled here. I know we’re making the transition around lunchtime. It’s my pleasure to host Greg Peters, Co-CEO of Netflix. As a reminder, Netflix may be making forward-looking statements, and actual results may vary. Greg Peters was named Co-CEO of Netflix in January 2023. Previously, he served as Chief Operating Officer and Chief Product Officer, and before that, Greg was International Development Officer for Netflix. Greg, this is your second time at the conference. Thank you for coming back.

Greg Peters, Co-CEO, Netflix: My pleasure. It’s great to be here.

Unidentified speaker, Host: Great to talk to you. I do want to start with your title. It’s been two and a half years, co-CEO. You and Ted, talk about how that relationship has continued to evolve and how you guys think about the priorities that each of you have in running the business on a day-to-day basis.

Greg Peters, Co-CEO, Netflix: Sure. It’s probably worth noting that this position and how I got here was the result of 10-plus years of succession planning by Reed, really. It didn’t happen overnight. He was building it a long time coming. I think a tremendous credit to his long-term strategic view and also discipline as a founder to take this step and say, "I want to make sure that it’s happening in a way that will set the company up for success." In terms of priorities, we think about it as a shared set of priorities. We don’t think about it as a split set of priorities.

If you think about where I think the priorities of the company is, where Ted would think the priorities of the company, first and foremost, priority one is we have to take what we call the core business, which is the film and series subscription business, essentially, and make that continually better. That comes down to three things. It’s better content, so more diversity, more quality of film and series that we’re presenting, a better product experience, which we really think is a force multiplier to that content. If we do a better job with the product experience, that means we’re delivering more value for every dollar that we’re investing to members. That’s a high leverage point for us as well.

Ultimately, we need to close the loop on all that, which we call the commerce component of this, which is essentially how do we effectively bring that back in terms of revenue to the business through more subscription, pricing, now an ads business as well. Those are key components. Maybe if I can just go on that for a second, on the content side, making that better, it’s been a great couple of weeks, right? We’ve had some record-setting moments. We had Happy Gilmore 2, which came out. That was the opening weekend record in the U.S. for Nielsen. 2.9 billion minutes viewed there. That was exciting. K-pop Demon Hunters, which has just become an absolute sensation, record-breaking as well. For us, it’s the biggest film we’ve ever had. 266 million global views in the first 11 weeks.

A cultural phenomenon way beyond even us in terms of K-pop merchandise, our sales are up 80%. The National Museum in Korea has seen record-setting visitors. Even the noodle maker, spicy noodle maker, has seen their shares go skyrocket because of this. That’s been incredible to see as well.

Unidentified speaker, Host: It speaks to, I know you guys have referenced it a lot of times over the years, the halo effect around the platform in general. It’s not just about distributing content. Whether you think about the lift that comes from commerce or influence, there’s a second and third derivative effect around a lot of this very successful content.

Greg Peters, Co-CEO, Netflix: Yeah, we call it the Netflix effect. When it works, it’s incredible, the power to see it.

Unidentified speaker, Host: Yeah. When you think about that core proposition around user engagement and tying it back to incremental investments in content, why don’t you level set what you guys are seeing in the business about striking the right balance between investing in content and driving engagement and making sure you’ve got sort of the pockets of alignment you want for the medium to long term?

Greg Peters, Co-CEO, Netflix: Yeah. To be clear, the direction of travel is very obvious. Every time we run analyses or run experiments around this, the answer is unequivocal, which is our members want more entertainment from us. They want an increasing variety of entertainment, more shows, more titles. We’re committed to going to do that. When it comes to engagement, we’ve seen absolute engagement over the first half of the year grow, which was exciting because we knew we had a particularly back-weighted slate. We anticipate that we’ll see essentially engagement in the second half grow even more. We see a faster rate of growth, and there’s some good initial data points to that effect. In July, in the U.S., let’s say the Nielsen numbers, for example, we saw about a 40 bps increase in engagement there.

That got us to a new higher watermark that we haven’t seen before, which is pretty exciting. It’s not just the U.S. We see it in other territories around the world. The U.K. is another good example. BARB is the ratings agency there, and we saw a 140 bps increase on BARB as well, same period.

Unidentified speaker, Host: Got it. Okay. Understood on the engagement side. You’re about four months into the rollout of the user interface. Building on this idea of engagement, changing the experience that your users have globally, what have been some of the key learnings as you’ve rolled out this new user interface? What were some of the strategic priorities that drove making the decision in the first place?

Greg Peters, Co-CEO, Netflix: Yeah. This is that sort of second category of how do we basically make our core business offering better. The way I think about this is if we can make the user experience 10% more effective in connecting our members with titles that they’re going to love, it’s essentially like we spent 10% more money on the content investment side. It really gives a huge leverage point there. We are excited to get to the point where we rolled out this new user experience to about 80% of our TV or TV-connected devices. It’s gotten good reach at this point in time, which is fun to get to. When you’re putting a new user interface against a user interface that’s been in the wild for 10-plus years and has seen constant evolution, it’s very hard for that new experience to compete effectively.

We saw a little bit of this when we were testing it. Actually, upon rollout, we’ve seen even better performance than we’ve seen in the testing period, which is great evidence to indicate that we’ve got the right structure to take us forward. You talk about what are the goals, what are the KPIs, how do we think about this? A lot of this just sits in the space where we built the UI that we had before, 10 years ago, essentially, with the design was created. The business is just in a totally different space today than that point in time. We’re asking that UI to do way more than we were back then. Part of this is just think about live, which is an exciting new area for us. Netflix was on demand. You showed up whenever you wanted to, and you could watch whatever you want.

That was great. It’s still great. We love that. Now when we have Canelo vs. Crawford, which we have in a couple of days, we have to communicate to our members, if you want to be part of this joint collective experience, which has got tremendous value to be part of that, you got to show up at 8:00 P.M. and watch it all together. We need a UI that was capable of doing that. Just having that flexibility to accommodate new content types has been an important initiative for us. Maybe even more important, though, is an architecture that allows us to take advantage of new technologies. Partly, one of these examples of this is having a UI that dynamically responds to the job that you need it to do in the moment.

When our members show up to Netflix, if it’s Sunday afternoon, you’ve got the whole family around the TV, you need a certain reaction from us, a certain kind of experience from us. If it’s Thursday night and you come home after work or after dinner and you just want to binge the latest episode of the series you’re watching, that’s a very different need state that you’ve got. Partly what we’re trying to do is make sure that we can, through a variety of explicit signals, you telling us what you need at this moment, and implicit signals, how you are using the UI, essentially dynamically respond to that and provide exactly the experience that you need. That’s an exciting avenue of travel.

I would say to getting to this point, the real important part is having 10 years’ worth of iterative development opportunity and the potential for unlocking that value.

Unidentified speaker, Host: Maybe if I could just follow up there, because it seems like that’s such an interesting dynamic. You have such a wide array of content. You have such a wide array of users. You’re constantly sort of solving for discoverability when intent is expressed, for lack of a better term. How should we think about the new UI, maybe longer term, marrying better discoverability and actually being an incremental driver of engagement if you can marry that even better than it is today?

Greg Peters, Co-CEO, Netflix: Yeah. It’s interesting when you say intent is expressed, because part of what we can do differentially, maybe uniquely, is to actually unlock intent when it’s not understood by the user initially, right? I think Squid Game is a good example of this. You and I were talking about it beforehand. If you had given the log line to Squid Game to all of our members around the world and said, "This is the kind of show this is," how many of them said, "Oh, yeah, I definitely want to watch that"? Not as many as we actually ended up watching that.

That’s where I think the UI can really do some work, because it can find what are areas of interest on a member-by-member basis, then present the right information, the right visual assets, the right video assets in a way that’s unique and specific to that individual user to create that connection and have them watch it. We do more discovery when there isn’t an explicit intent than we do when there is. We actually think of that explicit intent as a relatively subordinate use case to solve. Back to your point, what we saw through the 10 years of the last UI and what I very much expect that we will see in the 10 years of this next UI, we can measure on a sort of content catalog normalized basis increased engagement because of the work we do in the UI.

When we do that, that means that now growing to $18 billion of content investment we have, every single one of those dollars is worth more to the users. I think of these sort of three dimensions of compounding leverage, essentially, right? If we can invest more in content, that means more value delivered to users. If we have a better product experience, that means every incremental dollar that we invest is actually worth more in addition to the existing dollars that we’re investing. If we can do it at a broader scale, that means we’re actually building that over a broader base. Those things all compound together.

Unidentified speaker, Host: Okay. Super interesting. The other side of this is the company’s been on a journey over the last couple of years with respect to the pricing narrative around the product, the tiering narrative around the product, and the way it’s brought to market. Talk a little bit about some of the key learnings as the evolution of this has moved forward over the years of trying to align value given to the consumer with striking the right price to extract from an economic standpoint, and how tiering also plays a role in sort of incenting some levels of growth as well.

Greg Peters, Co-CEO, Netflix: Maybe start with a couple of key principles that we think about. One is you’ve got to earn it, right? The first job that we got to do is we have to deliver more value to our members. We can’t ask them to pay more unless we’ve done a great job. You don’t have a long-term sustainable business with increasing revenue and profit if you don’t do that work. Consumer choice is another one. Not all consumers around the world are created equal. They have different needs from us. We want to create a set of offerings for them that allow us to present different features and allow consumers to opt in at different price points. Low entry point, an accessible plan is super important to us, right?

Making sure that around the world we have what we think is a pretty incredible entertainment offering available to people at a pretty low price. That’s important to making sure that we have the broadest scale, consumer scale that we can have, which has other compounding effects back to the K-pop Demon Hunters. If you think about a very niche premium offering, you couldn’t have the K-pop effect that you have, right? Having that low accessibility or that high accessibility, low entry price is super important to us. I think if you look at the U.S., $7.99, the amount of entertainment that you are getting for that price is astonishing in my mind, right?

At the end of that whole list, we have to make sure that the pricing and the plan structure that we have works for the business too, because obviously the goal is that we continue to grow revenue, continue to grow profit, and that allows us to invest in that cycle and keep that whole process going. I would say that’s how we think about it. The price changes that we’ve done recently, you’ve seen us do changes across a wide range of countries across different parts of our plan. It’s all largely gone as we’ve expected. That’s a pretty good sign that the model we’ve got is working. We don’t anticipate changing that model. We’ll retain some flexibility on the structure approach.

I think we’ll be keeping to think about, is there more we can put in the top end to make the top end even more attractive to the superfan? Obviously, we think that’s a good direction of travel. This core anchor of a low price, high accessibility is a pretty important component of what we’re doing.

Unidentified speaker, Host: How does live play into a broader strategy around tiering and pricing? Because obviously, those are, this is me editorializing, typically more expensive pieces of content relative, maybe not all pieces of sports content, but some are. Trying to align the value proposition of the cost with the audience generated, how do you think about striking that balance?

Greg Peters, Co-CEO, Netflix: We try to do that with all of the content we have, right? We try to be really disciplined at saying, what are we investing into this versus what is it returning to our members and make sure that we’re not in a position where those are widely off base. Stepping back on how we think about live, I would say the evolution of the entertainment landscape that we’re in, I think, is moving into a sort of multimodal, bimodal kind of model where you have a real center of value in personalized content, speaking to you specifically. It’s very niche, maybe in some cases. The other end of the spectrum is a joint shared experience that many, many of us are having. We seek to operate at both, really, right?

We have a wide range of programming, some of which is very, very targeted and some of which is very broad. If you’re going to watch Stranger Things, it’s going to be a phenomenon. K-pop is going to be a phenomenon. We’re going to have a shared experience. Live events, we think, can play really in that role, right? If we are all watching the same boxing match, if we’re watching the roast of Tom Brady, we’ve got live events. We’ve got our first live event outside the U.S. in Japan, which is the World Baseball Classic, which we just announced. I’m pretty confident that that will be a huge moment of shared experience and conversation in Japan. We think that that offers a really interesting complement to the entertainment offering that we’re delivering. We want to go do that.

Again, we want to do it in a disciplined way, which is why I think you’ve seen us be very targeted about the kinds of events that we’ve gone after and how we think about growing that.

Unidentified speaker, Host: Understood. You referenced earlier giving consumers a compelling price point around the advertising tier. Over the last three years, you’ve been on quite a journey with the advertising tier in terms of the learnings you’ve had as a company, how your strategy’s evolved, what you own and operate, and how you invest. Maybe just reflect backwards first before we talk about going forward. What have been some of the key learnings about growing and scaling an advertising business that you might have over the next 10 years plus?

Greg Peters, Co-CEO, Netflix: Yeah. I very much come from the perspective when you start something, you don’t really know what you’re doing. Our job is to essentially be OK with that and then to start the learning process and see how quickly we can learn and develop a capability, a high-quality capability in that space. That got to how we thought about starting, which is essentially like, what is the fastest way to get this going and to get something out there and really start learning? I think it was really effective what we did, essentially, because there was a tremendous amount of time where we were figuring out the consumer part of the offering, right? We were tweaking the features. I don’t know if you saw this, but we started with different resolution. We started with different things. We were tweaking the feature set. We were tweaking the pricing.

We sort of figured out, oh, this is what we need to do. This is the right mix right here to work for consumers. That really allowed us to grow scale. We were able to operate because of a partnership in that period of time. At some point, we realized, OK, now we’re ready to take the next step where we really want to own our own destiny with regard to the technology that we’re using to deliver ads. We built our own ad tech stack quite quickly. We’ve now actually launched that in all of our ads markets. That’s exciting to get to that moment. That really is the foundation from which we can then pivot to the future and think about what are we building and what do we need to build from here.

Unidentified speaker, Host: OK. In terms of the financial implications of advertising, I think one of the most often asked investor questions is at some point in the future getting to where there’s no dilution from the ad tier relative to the subscription-supported tier. How do you think about that journey and where we are on that journey as a broader goal for the business?

Greg Peters, Co-CEO, Netflix: From my perspective, our goal should be ultimately thinking about the total revenue optimization across the business. There’s a variety of pushes and pulls in there. Clearly, having a lower consumer-facing price as part of the subscription gives you a huge price elasticity benefit and allows you to build a bigger audience as well. Right now, to your point, our composite arm, which is subscription plus the advertising revenue on a per-member basis on the ad side, is less than our median non-ads arm. There’s a gap there. I really see that as an opportunity. That’s actually a source of potential growth, right? We’re in the position where we know there’s a ton that we can go do to improve the ads business, improve ads performance. We just launched on our own ad tech stack. We know that there’s format innovations. We’re providing interactive formats later this year.

There’s a ton of other new formats that we plan on going out with. We know that there’s data targeting personalization benefits that we can drive. We know that those will drive incremental ads performance as well. We’re just actually getting to the point where we’re actually getting to reasonable advertiser diversity. There’s a ton of room that we can grow on that side. Part of that is building out our own go-to-market capacity. We’re hiring very rapidly in that space. Part of that is adding demand sources, external demand sources that allow more advertisers to buy with us more easily. There’s a ton that we can do in that space. That’s not even getting to the much more sophisticated things that we can do with ML and AI in terms of targeting, improved targeting there, as well as actually using AI in a creative capacity as well.

I look at this as like it’s almost great to have a little bit of a gap there, because I feel like we can build into that for many years to come.

Unidentified speaker, Host: Understood. You referenced a little bit AI in the ads offering. Just broadly, I think there’s a debate across the media and entertainment industry about the role AI might play in content creation going forward. There’s a pretty heavy debate at this conference, even though we’re only about halfway through the first day, about the role AI will play internally in organizations around productivity. How do you guys think about deploying AI as a company when you think about some of the external opportunities and the internal opportunities?

Greg Peters, Co-CEO, Netflix: Maybe start with we’ve had AI deployed for nearly two decades. I don’t know if anybody remembers the Netflix Prize, but this was a moment we went out to the academic and broader community and said, hey, can you beat our own recommendation systems with better ML approaches? I would say we think we’re positioned because of that lineage, our tech DNA, huge data sources, well-structured data sources, having a consumer product that’s at scale, having business processes at scale. We think we should be in a position to be an incredibly proactive, effective adopter of these new technologies. We’re doing that. We want to do it also in a responsible way. I would say I think back to a handful of years ago, everyone told me, you need an NFT strategy, right? I’m very glad that I did not go pursue an NFT strategy.

We want to be very thoughtful about where we apply this. Where does the technology relevant leverage? Generative is a totally different thing than NFT. Generative is the real deal. It will make a bunch of differences. We want to make sure that we’re doing it in a way which is not performative or reactive, but actually seeing a real business value. We went to the company and said, let’s do some work here and figure out where can we leverage this. We came up with hundreds of use cases, hundreds of use cases. The vast majority of them fit in the category, I think you were getting to sort of productivity, where we’re going to go to the market to solve this, right? Finance and legal and customer support, there’s so many different places we can literally go to a provider and say, you’ve got a solution.

Let’s integrate that solution into what we’re doing. There’s a handful of cases where we think that we can invest to create a differentiated type of tool or process, using most, in almost all cases, using essentially building blocks that exist out there. We don’t want to be a frontier model builder. We don’t think that that’s the role that we play in the ecosystem. Our job is to take the people that are spending hundreds of billions of dollars building frontier models and leverage them, whether it’s an open source or on a commercial licensing basis, use the data that we have to refine those models, make them more specific to the job that we have done, and then integrate them into existing tooling that we have or consumer products.

To give you a sense of where we see that, what are those spaces that we think we can actually do that kind of investment? The consumer product is one. We mentioned the recommender systems that we use. We actually see using these new model architectures as a way to improve the quality of recommendations we have, and maybe even more importantly, to basically provide high-quality personalization for new content types as we roll that out. We can really quickly do this with these new generative techniques. It also means new types of consumer experiences. We have in beta right now a conversational discovery experience. This is where you can sit down and you can say, hey, I had a hard day at work. I want something uplifting and funny. We give you a bunch of different possible recommendations. You say, these look great, but I’m also feeling nostalgic.

Give me something from the ’80s. You land on the thing that you actually want to watch. That’s an exciting new thing we can go do. Content is another area. You mentioned that. We see a lot of our creative partners using these tools for previsualization, imagining how this will go before you actually spend the money to do a live shoot, shot planning and shot composition, pro forma budgeting, scheduling. We see it in visual effects. There’s a lot of work that we can do in post-production. Our job, we think, is not to tell creators this is what you have to go do. Our job is to enable creators with a bunch of tools that work well together. We’re investing in essentially building a bigger palette for them.

Just like we had seen with animation or VFX as new technologies come online, creators will figure out how to leverage them. We think that will result in a better output to the screen. They’ll put something on Netflix that’ll be even more compelling to viewers. We want to do this responsibly. We actually just released a set of guidelines to using generative AI technology so that we think about the artistic community, how do we be responsible consumers of this and guide our partners to do things responsibly while we are enabling them and make sure that the folks that want to be aggressive about this are aggressive about it. Maybe one more I’ll just offer on this is the advertising space, which is super interesting as well. There are targeting and personalization capabilities that we think are going to be unlocked by generative.

One of the most fascinating areas for me is the ability to do creative generation. If you think about the acme of the advertising industry and what CMOs wanted for a long time, it is to be able to tell an authentic brand-forward story in a way that matched all their messaging goals, but do so in the creative universe of the title that they’re basically putting that spot against. It was incredibly hard. It has been incredibly hard to do that because you have to line so many things up. The creative process can take a long time. You don’t have fast iteration cycles. It was very rare that you could actually pull that off. We think with generative techniques, we can actually decrease the bar to do that successively. You can imagine a universe where the brand brings essentially a lot of guidelines, rules, information, assets, messaging, examples.

We bring that into the show universe and all of that and essentially kick out potentially 20 creative spots or treatments of it. The CMO says, this one really works for me. We can work on refining that process. We anticipate that that’ll happen a lot more because of these technologies.

Unidentified speaker, Host: Interesting on the advertising front. Just building on that, there’s obviously new media formats that are always up and coming and continue to evolve. The creator economy is one of them. The creator economy is one that typically is latching on to a lot of some of these AI creation tools to speed time to market. How do you think about embracing new media formats and sort of factoring them in and folding them into your broader content strategy as a platform?

Greg Peters, Co-CEO, Netflix: We want to be clear about what part of the entertainment ecosystem we’re serving, because I think that that’s important to be disciplined about that. I think we want to open up the aperture on that from time to time. There’s things like video podcasts, which we sort of see as the evolution of the talk show that we want to embrace. We want to make sure that we’re doing the jobs that we think we can win at. When you get to creator economy, one of the opportunities we think there is to work with a whole new set of creators. We work with creators that came from traditional methods like film school. They came through broadcast or maybe theater. Now we’ve got creators that are emerging from YouTube or TikTok and places like that.

We’re starting to do essentially work with those creators when they want to tell a story, which we think meets that target of what kind of storytelling we’re delivering to consumers. They want to do it at a scale, at a quality level that isn’t necessarily supported by the platforms that they’ve grown up on. Miss Rachel, the Sidemen in the U.K., Mark Rober, all good examples of this. We have a business model that allows us to invest forward and allow those creators to basically tell their stories at a higher quality level than they might be able to do on other platforms. We really want to unlock that where it fits for what kind of entertainment we’re delivering.

Unidentified speaker, Host: OK. Building on sort of new formats for you, a relatively newer format, you talked earlier about your approach to live. Talk to us a little bit about where you look for opportunities in the live content space. How wide an array of geographic approaches do you take to this or format approaches do you take to it? I think the knee jerk is to fall back to the more traditional North America-based sports. There’s a much bigger world out there of live entertainment.

Greg Peters, Co-CEO, Netflix: There’s definitely a bigger world. First and foremost, we think about this as back to that creating the shared moment where we’re all watching the same thing. We have a conversation. I think that’s the job that live is doing, and that’s what we should focus on. Sports has been super effective historically for doing that. We want to embrace the kind of sports events that we can do, and we think we can do on economic terms that work for the business. We also want to think more broadly than that, and so there’s opportunities to do that across, whether it’s music or award shows. There’s comedy, things like the roast of Tom Brady is a pretty good example. Even when we did the two NFL games, we added Beyoncé into the mix as an extra musical factor.

There’s a lot that we’re going to figure out and a lot we’re going to try, quite frankly, to see how broad a set of formats we can go deliver in that space. It’s ultimately with that goal, which is how do we create this conversational moment, but also do it on an economic model that works for the business.

Unidentified speaker, Host: OK. Last one on sort of newer-ish formats. You made a big push into gaming over the last couple of years. This is a new initiative of yours in the last couple of years. Can you hit refresh on where the gaming strategy sits today and how you think about what gaming does for the platform of users against maybe some of the investments that are needed against it?

Greg Peters, Co-CEO, Netflix: Yep. Maybe just start with the opportunity size. We think games is a big consumer entertainment market, $140 billion outside of China, outside of advertising. Really just in the space that we operate. What we’ve seen from our track record so far is that when we have the right game, I’ll give you two examples. Grand Theft Auto is one. Squid Game Unleashed, which we launched with Squid Game, the narrative title, those really work for our members. What we see in terms of how it delivers to the business is pretty much what you’d expect, which is increased engagement and increased retention. That’s the core things that we’re seeking to drive. Now, what we’re doing is basically trying to refine our strategy to make sure that we are delivering more of those games that actually matter. We’re really looking at four verticals to go do that.

One is narrative games that sit within the IP universes that we’re launching, back to Squid Game and Squid Game Unleashed. We think that that’s a really good model. I’ll give you just one fun example on this. When we did Happy Gilmore 2, we launched a Happy Gilmore golf game from 1998. It did remarkably well. This was a very opportunistic—

Unidentified speaker, Host: Can’t believe I missed this.

Greg Peters, Co-CEO, Netflix: Yeah, I’m very opportunistic. It just goes to show when you’re in the Happy Gilmore world, you want more. This is a way games is a way to go deliver more of that. That’s one place we want to go do that. Kids is another space we want to do this, where we can give an ad-free, in-app purchase-free experience for kids’ games as part of the subscription model. That works quite well. We want to give families the opportunity to have essentially the evolution of the family game night or the evolution of the game show on TV brought to you in an interactive place where you cannot just watch but play. We think that’s really relevant. Delivering that on TV is an important model to do it.

You’ll see us do more game distribution where we take a known game title like Grand Theft Auto and release it to the world, because we found those to be quite efficient as well.

Unidentified speaker, Host: Super clear. OK. I know we only have a few minutes left. Maybe try to bring it together with one bigger topic I’ll ask you about. When you think about the evolving media landscape and you think about over the next three to five years, talk to me a little bit about the working assumption about how the media landscape might continue to evolve in the next three to five years and how you guys as a team are sort of aligning your investments and your strategy to capitalize that at Netflix.

Greg Peters, Co-CEO, Netflix: I think we’ve gotten to the point where everyone now acknowledges that linear is on a declining path and that streaming is the way to go. It’s fun to get there, because we, of course, have predicted this for a long time. Sometimes you were like, why isn’t everyone else not embracing this reality? I think we’re at this point now. That’s great, because I think we see competitors starting to rationalize against that reality. They’re thinking about profitability on the streaming side. That means oversubsidized content investment, too low consumer pricing. Those things are changing. I think that creates a better competitive environment for us as well.

If I think about where do we go from here, I’d say the easiest thing that you can go do is sort of go into that cream skimming mode, where our traditional media competitors certainly got out there and they said, let’s just grab as many subscribers as we can in the U.S. Let’s think about where there’s low-hanging fruit in terms of folks around the world who want English language content, the kind of content that they’ve invested in. That’s the easiest thing to go do. Then you have to go do the really, really hard work, which we have been working on for more than a decade, which is figure out how do you work with local creators, be included in the creative community in 50-plus countries around the world, and tell stories that really work for those local audiences, some of which will become big globally.

You really have to start with the local audience. How do you understand go-to-market in all those different markets around the world? How do you think about pricing? How do you think about how do you even take payments in so many countries around the world? How do you think about partnerships that expose your service to cohorts of folks that don’t even know what streaming is? We’ve done that in Japan in many cases as an example, or India in many cases as an example, where we’ve had to really work with local partners to go do that. I’m excited to be in the position that we’ve been in this process for a long time. Many of our competitors are just starting that journey. Our job is obviously to use this moment when we’ve got a pretty good foundation. We’re at scale. We’ve got a profitable business.

We want to keep investing and keep that process of growing and learning going.

Unidentified speaker, Host: OK. I think we’re going to leave it there. Please join me in thanking Netflix for being part of the conference.

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