Q1 2021 Netflix Inc Earnings Call
Per view I'm Spencer Wang VP of IR and corporate development. Joining me today are co CEO Reed Hastings co CEO and Chief content Officer, Ted Surrenders, CLO, and Chief product Officer, Greg Peters and CFO Spence Neumann, our incubator of this quarter is nearly gupta from fidelity as a reminder, we will be making forward looking statements and actual results.
Wells may vary with that let me turn it over to <unk> for her first question.
Thanks Spencer. Thank you all for having the great to be with you and thank you all for all of the great work over the years, it's been great price to be honest with you as shareholders.
So with that let's just jump right in.
Obviously, you were Comping of really bank Q on last year with 16 million net adds.
On the net adds this quarter came in below your expectations on below the street's expectations any additional color you can provide on what caused this.
Hey.
Expense I guess I'll take this one first.
Hopefully you can see it looks like it's of little frozen maybe it's just frozen on our end but.
Look so in terms of in terms of Q1 performance. It it really boils down to two Covid frankly, as you know the.
The extraordinary events of Covid of had a big impact on the world continuing on the big impact on the world and for US at a minimum creates just some short term choppiness.
And some of the business trends that we see in our business. So.
In particular, we had the huge pull forward.
In 2020 in terms of our subscriber additions nearly 40 million paid net adds and in 2020 and we also had on your global shutdown in production, which we have been ramping safely and at scale.
Too much of last year and into this year, but it did push some key title launches into the the back kind.
On the back end of this year. So the combination of those two things does create some noise. It's it's it's super hard to obviously kind of forecast quarterly subscribers than in a typical quarter for us and particularly.
Hard in this in this environment.
On page two of our earnings letter, we show, our actuals relative to forecast, which in our guide is our internal forecast for subscribers.
And because it's in our forecast that we're going to Miss every quarter. It's just the <unk>.
Matter of whether they are bigger smaller misses and we can see.
Over the past five years, our biggest kind of misses to forecast either up or down the <unk>.
Most of those big misses in the biggest of or in the past five quarters relative to the past five years and that was the five quarters of Covid. So just a difficult time to forecast the business, but the key is the business remains healthy.
Our engagement of our viewing per household is was up year over year in Q1, our churn was down year over year.
And the business is still growing so even at 4 million paid net adds if you kind of take COVID-19 out and look over the past two years, we've grown from two years ago at about 150 million members to almost 210 million now so that's nearly 40% growth.
And in about just under 20% over an average over each of those two years, which is in line with the past couple of years. So the business remains healthy and that's because the long term drivers. This big transition from linear to streaming entertainment and that remains as healthy as ever but you do see little little on.
Kind of noise in the near term, but a lot of long term clarity.
Thank you.
Maybe we had those 10 years, where we're growing smooth of silk.
And then just a little wobbly right now and of course.
We're wondering what why are we sure it's not competition.
Because obviously, there's a lot of new competition.
Really look through all of the data looking at different regions, where new competitors are launched are on that low.
Boston, We just can't see any difference on a relative growth in those regions, which is what gives us confidence that its intensely competitive but it always has been I mean, we've been competing with Amazon Prime for 13 years with Hulu for 14 years.
It's always been very competitive with linear TV too so theres no real change the we can detect in the competitive environment, It's always been high and remains high.
Well, it's encouraging to hear that your churn was actually down year over year and you didn't have some price increases in Q4 and Q1 in the few markets. So maybe just talk about how wow, it's the cracker gains as part of that or because I think.
Okay.
Sure Greg do you want to go first.
Right.
So we're seeing results that are very similar to what we've seen over the last.
Two years, which is that if we wisely invest in gray.
Great stories of we increased debt the variety and the diversity and the quality of our program, which Ted.
The team has assiduously truckload volume in every country around the world. We also invest in better product experiences that make it more delightful and easy to connect with the story, we're just delivering more value to our members. If we do that well then we can occasionally go back and ask them to pay a little bit more to keep the that positive cycle.
Going on.
So having said that I just want to reiterate we think we are still an amazing entertainment. Dod you would want to remain an incredible value compared to our competitors and the competitive offerings of the out there broadly so even as we continue to improve the service we got that in mind and we want to make sure that we're there.
First of all to more and more people on the planet through that process. Okay.
And many of the only thing I would just add to what Greg just said I agree with all of that is just very specifically in terms of what we see in the numbers on the churn side, our churn is actually below pre price change levels already in the U S and in most of the markets, where we have adjusted prices in just some of the newer ones haven't come all the way back down but they are the rapidly.
Getting there.
That's great.
Can you talk a little bit about what you're expecting in terms of subscriber growth of the world Reopens.
There is there anything youre seeing in your <unk> versus less urban markets that will sort of give you a window into how.
How are you thinking about that and what sort of basis.
Well tragically many many countries have opened and closed.
Over the year and we've got many countries right now that are in the real crisis.
Fortunately the U S not one of them right now.
So we've got a lot of evidence on that point and what the initial surge of Covid on which was quite large and subscriber growth and viewing but since then every opening and closing including the U S over Christmas.
Really didn't generate any notice of both material effect.
So I don't think theres any material effect, we're going to notice about future openings and closings again, because we've been through it many countries pretty intense searches. Unfortunately.
And the only thing I'd add.
And I guess to Reed point to specific to your question on the Q2 guide it is.
Related to that is.
It is very similar to what we saw on Q1 is what's reflected in Q2 in terms of still working through that pull forward still working through some of the pushed slate of some of the day titles into the latter half of the year and also it's a bit of of seasonally soft period for us. So those are all playing into it but the good news as of the core underlying metrics of <unk>.
Very healthy and there is this clear catalyst to a reacceleration of growth in towards the back end of the year as the big titles start to launch in the strength of slates and we come out of that pulled forward. So feeling good about the long term trends.
Do you feel like Q1, and Q2 started the cap rate.
You're expecting I know, it's really hard to forecast when you.
26 million subscribers over the course of two quarters last year.
Just how are you thinking about how the second half might shape up with the international.
The answer as well.
Some of the behind us.
Yes, let me take it.
One of the.
The thing to keep in mind is that we normally when we have to do kind of day in and day out weekend and week out year on in Europe is deliver programming that are members of luck.
And value and the shape of that gets determined sometimes two to three years in advance. So you go into these production cycles you go into the planning cycles, and you've got a pretty smooth.
The release of high profile projects and smaller kind of passion projects in all of those things and what happened I guess in the first part of this year's of lot of the projects, we would hope to come out earlier did get pushed because of the post production delays in the Covid delays in production and we think we'll get back to a much steadier state in the back half of the year and certainly in Q4, where we've got.
Of the returning seasons of some of our most popular shows like the which are in you and.
Cobra Kai as well as the big Tentpole movies.
<unk> came to market a little slower than wed hoped like.
Like Red notice at the rock and Ryan Reynolds and gave the dot.
And escape in spite of everything with Chris Hemsworth, a big event content now all of that being said in every quarter of the year, we release more content that we did in the previous quarter and the previous year's quarter by quarter and in every region.
I think the shape of the mix of the content has become a little more on certain and then the long term impacts at the corporate shutdown are also becoming a little more uncertain than that in that timeframe in the first half of this year.
Great well good luck.
Ted to the Big picture now that adds.
You asked about the card or not.
So.
Youre at over 200 millions of subscribers around the world.
The here.
The original content strategy.
You seem to be coexisting really well with.
Possibly the largest direct competitor you might have risky.
And yourself on Inc. Thank you for that we did note it.
Maybe just talk about backdrop the priority review in 2021 and really just the next two day did you see them, maybe we can start with you.
Probably your reference was to Disney, but our largest competitor for TV viewing time is linear TV.
Our second largest as Youtube, which is considerably larger than Netflix and viewing time.
And Disney is considerably smaller, but we're sort of in the middle of the pack.
But in terms of what we focus on is the same things that we've always focused on which is our members satisfaction drives retention of word of mouth and drives our growth.
Where can we find the story that you talk about even more that you connect with where can we improve our choosing where the best things of recommended for you.
And then ultimately the content of can we have stories that are of interest incredibly compelling and we're just quarter by quarter of learning more of lessons on each one of those which is what improves the member satisfaction, which is what really drives the growth.
And I'd say one of the day to keep in mind is over the years media companies have been really great at exporting Hollywood content around the world and I think I'm proud of how we've done that as well it sounds like Richardson with over 100 million starters.
Movies, reaching these enormous audiences all over the world.
But the one thing that we really have gotten really of sharpened our skills on the last couple of years has been creating content from anywhere in the world and playing at all over the world and the Great thing about that is as does the stories that are coming from all over the world like we saw the Dupont. This year. This quarter. It was our biggest new series on that.
Fleets in the world.
With Dupont from France, and the show was not like a watered down friendships with a very Fred show and when.
It's really been great about it is as you tell stories from around the world. Those two of the more authentically local they are the more likely they are to play around the world because people recognize the authenticity of the storytelling and that's something that we've been really focused on as well as continuing to offer a very big variety of content from Hollywood to the world as well, but we've got.
New new seasons of really popular shows up from around the world like a leap day in Spain, and the capacity per panel coming up.
The naked director from Japan, which has been an enormous hit for us.
<unk> from Turkey, So our ability to do this around the world at scale and be able to bring those stories to the big global audience is something that were really incredibly proud of and we will keep working on over the next couple of years.
And I'll pick it up from there I am also the.
We're excited about that aspect of our business the client stories from around the world and connect them of audiences around the world and the companion piece of that is making sure that we increasingly are understanding what our members' needs and sort of the members. We haven't signed up consumers' needs generally in more and more of countries and they all have sort of unique.
Constraints that they are working through the app unique expectations from the service and our job is to learn more and more and more about what those are and make sure that we are being able to offer the service in a way that feels natural that feels delightful to them and whether that's having the right payment method so that they can.
Consumers don't have to think about what hoops, they have to jump through to actually sign up and pay for the service how we present the content on to them.
Regardless of what country it comes from or what language, it's in but presented in a way that allows them to get into the story of it and realize that the plenty in the the amazing diversity of storytelling that exists across the planet.
Yes, I think it's I think everyone's pretty much hit it and maybe I will try to add.
I get Super excited about justice giant transition to streaming entertainment streaming entertainment. It's the now in the future and we talked a little bit of in the letter about.
Our business and how it has transitioned over the last 10 plus years from.
From DVD by mail to streaming from U S only to global and.
From licensed content to original production, but what's helped US just on velocity of decision, making and our focus has served us well and assist.
We're sitting here, we're still less than 10% TV view share even in our biggest market. So there is just as big long runway of growth. If we stay focused and keep getting better and so I just I love the the opportunity to keep kind of continually getting better improving our creative excellence of our operational excellence and just maintaining the speed and velocity, even as we get.
Largely as the company.
Right now of IR.
Maybe I would say my main job is to continue to measure and youre kind of being.
Our other shareholders, but I think of what that means is just making sure of that you you all understand what we're doing why we're doing it from a strategic standpoint, and my broader finance role of supporting expense on the front end.
So just to make sure that we're allocating capital as wisely as possible and then continuing support.
Ted and Greg on the other business units from a finance support standpoint, great.
Great.
So I'd love to dig a little deeper with you don't get Bang on.
Click on.
36, Oscar nominations, congratulations incredible feat.
My question is over the long term do you think.
The primary or dominant way.
The balance.
And so what does it take.
I don't know about dominant but I would say, it's going to be continually material way of people view of films.
This is where the audience is kind of going.
And what we find is that we're not really kind of changing the way we make films for the way people watch film so they're watching the kind of films they would've gone out to the theater to see but in many cases and the convenience of the.
Their timetable and of the comfort of of their home, where they can really enjoy a great new film and it could be of film of the enormous scope.
Certainly competitive to the kinds of things you see in the theater you mentioned, the Oscars success and Thats certainly one flavor of filmmaking that we're super proud of.
Most of the we had 17 different films with an Oscar nomination this year, which is incredibly exciting.
But also the fact that we can do these very large scale action movies that audiences lever on the world at the same level of that are being produced for the theater.
So I do think debt, that's going to continue to be more and more meaningful to viewers.
What percentage of the films that they see in or out of the home.
So all of them over the years, you've been really good.
A high share of kind of most watched television shows like I look at IMTT top shows the remote searched shows on Google.
Do you have to do anything fundamentally different in film.
Achieve that same level of kind of high share.
It's not dissimilar than the people who have very diverse taste.
Kind of wanted to trying to hone in on we've always kind of set out to do the your favorite film of your favorite show. Whoever you are wherever you are and whatever mujer and so that's why we kind of go out of from so many different angles. It is a very unusual thing where you have.
Mank sitting next to the next to the Tiger King on the shelf for most media companies, but we have very specialized teams that focus on being best in class of each of those things that they do and Thats I think why we've had those results we're talking about.
I think we would say to we would need to spend more so we spend a lot more right now on series and film.
But that will grow with the total budget growth and then it's also the experience curve, we've been doing series longer and.
We're more dialed in about what was really based on what hits, we're getting there on film and also on the animation also on kids. Each of these has their own experience curve that we're progressing down.
Tom.
Can you share any more details about the county.
Hum.
I guess more specifically what is the rationale for the deal and what is it that your original actually it isn't the GBM.
But what's really exciting about the deal is that we're going to be producing.
Global original films from Sony's IP library on their development slate for Netflix, that's really an incredible opportunity.
The access access to IP that we wouldn't otherwise have and it's part of the big Global programming strategy over the next five years the.
The domestic pay one deal that is also part of that I think complements and adds to the but only for our domestic subscribers.
Over the five years and we do think that that's the great thing and it complements our growing output of original films as well.
We've had the output prior and through other deals over the last several years and it's been great. There are great films of people have diverse tastes like I said I think this adds to that.
Non compete with it.
Great.
Greg switching Eric price.
Your price range around the world has really.
Over the years.
The reality of in terms of the willingness to pay grows probably household in the U S paid $50 a month and then households in India at the cap.
Non.
So assuming over the long term you can sort of.
Matt you want willingness.
On the overall, what do you think your revenue distribution of look like across the piece.
Yeah.
Well as you point out.
Our spread has been growing wider and I think that that's.
Part of that story, we're really trying to find.
A set of planned types.
With the right kind of features and we know folks are some folks have gigantic Tvs at home and some folks are watching on their mobile phones on folks are approaching the services and individuals some folks are approaching as the family.
So many different.
Needs out there and so we're really going to try and match those feature sets.
At the right price points.
Two that really wide group of folks and we know that that inevitably means that we're going to really sort of see an expansion of that.
And part of that is making sure that we are continually looking at how do we.
Broadened accessibility, so how do we bring in price points that are low enough, where more and more of the world's population to be able to access the service to enjoy the kind of amazing stories that debt.
Debt, we are creating you've seen us do that with rolling out the mobile plan for example in several countries in Asia that sort of we find a good balance of features and price points, we're going to have to do more and more of that but I think the broad.
Trajectory is the one that <unk> seen which is.
A widening of the breadth of our offerings and price points associated with them.
Related to that.
On your investment in content investment in Asia is ramped up pretty significantly.
I think you announced the partner.
We are operating.
Your films.
Yeah, obviously happening is M&A continues to ramp I'm curious what sort of giving you the confidence.
The graphically the Asia, particularly in the market.
Low share of global GDP.
If the pain of premium.
Okay.
Right.
But remember I think it's the the product market fit is what we're always looking forward on programming the service in a way that consumers value of it and love it and it's a bit of trial and error at the beginning of.
Of each of the territories as we rolled out when we started launching in international territories with no of original programming in the.
The language with local producers and now we are producing in most corners of the world and I do think our confidence in investment in Korea, and India and Japan has been the success of the investments. The date and then it gets us closer and closer to that product market fit that we have in our more mature markets. So I do think and what we've seen in our in our.
Korean originals and our Japanese enemy is if they play really well around the region as well as in country and occasionally it can be very very global in there and their interest and desire and the fact that we can bring our global audience to those creators in each of the territories has been really attractive.
<unk> had enough success in Japan, and South Korea for you guys to think about it like Germany or France like it's the big developed rich market, we've got that wired.
India, we're still figuring things out and so that investment it takes some.
Guts and beliefs forward looking but the other investments you should think of just like rich European countries is content.
The exports really well and.
We're just getting a little better every month on it.
Yeah, and I'd just add to that of you can kind of see that in the numbers to net even in what we released on the regional numbers. The APAC region was about a third of our member growth. This quarter and also still kind of healthy healthy revenue growth, including average revenue per member and that's in part because as the.
And we're also Ken as we improve the services engagement is up.
And churn is down we can occasionally take.
Price increases as Greg mentioned and that happened.
The recently in Australia, and New Zealand in Japan, and the Army.
Members of clearly appreciating the value of what we are delivering them to the business the business of scaling and scaling well.
Yeah. That's helpful. So reed is that thought or belief when it comes to kind of these lower <unk> where market is.
Debt that eventually you'll be able to pay the kind of low <unk> high volume strategy or is that over the long term in terms of the rise in these markets are pleased the rising dramatically sort of park.
Yeah.
Okay.
I think on that we're still learning.
We've done some pricing experiments in the.
In India, the Greg can talk about.
And I would say, we're still low as they focus on getting our content fit and getting broader content.
So that's why I say that one is of more speculative.
The investment in say Korea, or Japan, which again five years ago. It was very speculative, but we did okay, but we've kind of umbro over the hump on that we've got we've got a great match.
The working on India, and where it is super exciting.
Again right now of this month things are terrible.
The COVID-19 spike, but outside of that we've been really producing a lot of great new content.
That's currently shut down Greg you want to talk about like Geo or any of that.
And maybe a couple of things there.
We recognize that with the we don't know a lot yet compared to how much we're going to learn over the next day on many many years and so our job is to really try and be innovative and pushing experiment and so whether that is pushing on.
The actual model in terms of like multi month or SaaS, Shay and sort of explore the ranges of the that kind of offering but then also.
Thing that we've seen the debt is quite.
Successful for us in a pretty much all of the markets. We serve around the world is leveraging go to market partners, who have existing relationships with consumers as of <unk>.
Way to expose them to the Netflix service and then have them make it easy to.
And of course the the.
The ultimate and easy to pay as it's just included the sort of bundle offerings that we've been doing more and more of the Geo is a great example of a partner of we've been working with her to really bring.
The service to a new demographic kind of very very low price associated with low cost mobile plans that they're offering as well as.
Home based IP TV plants and those of its adjusted for us as well. So it's constantly trying to push on all of those different engines and really figure out.
What is that right price point, the right offering and the right way that works for for the local law.
Members and consumers.
I would just add that India is a tremendous opportunity and I think Netflix offers a tremendous opportunity for the creative community to connect with the enormous audiences and like all great opportunities for <unk>.
Long journey, and it's a challenge and we think it's worth it and Thats why we are investing early in trying to stay ahead of it and I think we'll be able to see those kind of results of machine at other places in the world as we continue to learn more and more and more.
Great well I think look the American Indian content, but keep the content.
Greg.
You started to run.
A.
In certain markets the U S.
The limiting account sharing.
You can you talk about the size of the opportunity here on the wind how it's kind of on the right the screws on that.
Yeah first of all we recognize that our members are of different positions again and they have different needs from us in the entertainment service and we're really seeking that sort of flexible approach to make sure that we are providing the plans with the right features.
And the right price point.
Pete.
The needs. So we're going to keep doing that we're going to keep working on that working on accessibility across.
All of the countries that we serve but we also want to ensure that while we're doing that debt. We're good at making sure that the people who are using of Netflix account were accessing it are the ones that are authorized.
To do so and that's what the sort of line.
Testing is about it.
Not necessarily a new thing we've been doing this for a while you may see it pop up here on there in different ways, but it sort of.
The same framework that we use and I think youre familiar with and so much about how we think about continuously improving the service, which as you know.
We iteratively work, we use the the tests on the test results to inform and guide how we proceed.
And just sort of continually try and make that better and better.
And maybe we will test many things, but we would never roll something out that feels like turning the screws as you said.
It's got to feel like it makes sense to consumers that they understand.
And Greg has been doing a lot of great research on kind of how to try variants that harmonized with the the way consumers think about it.
Are there any particular markets where the subscribers.
Is there interest subscriber ratio, particularly high.
I think different every market in every country is different and so we see different ranges of behavior and I think just.
How people Orient themselves to the service is different from country to country. So I want to.
It's more than just sort of how they think about how maybe they're they're working the system works of art.
They think about share.
Sharing the service with our extended family our people. They love is the natural part of how they connect with the story that we're telling so it's all different around the planet and it's different within the countries to as you might expect.
We're.
The GAAP that you paid close okay at the very long.
Tom.
Do you think that Barry the bigger revenue opportunity and getting.
Some people get paid more limiting account sharing or getting every client.
Hey, Mark you are kind of.
It's like which is the bigger wrapping of opportunity.
10 years, or however, long it takes.
Got it.
Okay.
What I would say is I think the optimal revenue opportunity of the optimal business opportunity is trying to figure out of way to best serve.
Our members and trying to figure out the models.
The planned types of the right price points of the right features that really work for them and the natural way and that really is what's informing sort of our investigation of exploration I would say, we don't really know if most of the it's.
Often the case, when we're sort of going out of half of innovation what the.
The the right place to land is off of your already that's why we do this experiment and then we do the iterative approach. So it's mostly leading that process unfold and letting our member of speak to us about what's really the ideal model for them.
Great that makes sense.
Thanks switching gears to you now that your balance the.
Keep me up at night anymore.
I can ask the much more final question.
What do you do with all the excess cash.
Yes.
Could you maybe just talk.
Alright Barry.
<unk>.
What kind of packages.
Got it.
Over the next couple of years.
Yes, sure Nathan so so as we said in the letter in the last couple of letters now. We've we think we've turned the corner and we know we've turned the corner on the net cash flow story. So we expect to be about cash flow breakeven. This year, and then sustainably free cash flow positive and growing thereafter.
And so and we don't intend to build of a bunch of excess cash on the balance sheet. So we will maintain a debt level of gross debt level of in that $10 billion to $15 billion range, we paid down.
On 500 500 million of principle in Q1, so we our gross debt did come down from from the prior quarter and we think that share buybacks of our way to return value to shareholders in a way that is.
Responsible steward of capital, but also maintained the level of balance sheet flexibility for us to continue to be strategic is first and foremost of our number one priority is to invest strategically into the growth of the business, but then of course return excess cash to our shareholders. So we're still maintaining our.
Our goal of about two months of revenue as our kind of cash on the balance sheet and youll see us ease into that share buyback program. So it will start this.
This quarter.
So I think youll see us ease into it.
We're authorized for up to $5 billion of share repurchase and we'll kind of get the program going this year.
Great.
Reed.
Remained incredibly okay over the years I remember you telling me.
Just the importance of keeping the main thing of the main thing, which is obviously the land.
A lot of the class forgot Blake.
But when I look.
The next 10 years, which I realize is a very long time, but if you continue to be successful adding 30.
30 million subscribers of year, you'll be on.
Well over millions of subscribers in 10 years.
Feels like a high level of penetration, so I guess with that backdrop, how important the sort of half.
Firsthand.
Continuing to let the business maturing.
On the low return.
Well you know.
Youtube and Facebook and those properties are multibillion and the <unk>.
Of note is the only growing so where are we so fortunate to get to those numbers that you referred to.
Kind of be Super hungry to double from there going forward too.
So.
Outside of China, I think pay TV peaked about 800 million households.
So lots of room and that was several years ago that the peak lots of room to grow.
So thinking about it is we do want to expand.
So like we used to do that thing shipping DVD.
Actually we didn't get stuck with that we didn't define that as the main thing we defined the entertainment is the main thing.
So then we expanded into what Ted Ted.
Ted extended us into original content.
And first it was the original series and films, and then animation kids and unscripted and so bit by debt or adding category. So we've got a lot of work to do in terms of different types of entertainment that will continue to do that a lot of work in terms of our global production.
So I do think.
So there will be a second act in the sense that you mean like AWS and Azure.
Amazon shopping.
All of that we end up with one hopefully gigantic hopefully very defensible profit pool.
And then continue to improve the service for our members by doing that by expanding the category.
So I wouldn't look for.
Any big.
The large secondary pool of the profit, let's say a bunch of supporting pools like of consumer products that can be both profitable and can support the title brands. So.
That's an obvious one.
And any way of temporary two last questions.
Great.
I mean, just to follow up on that you know people people often view of gaming as kind of the natural extension of our adjacency for you. That's obviously still within the entertainment category as you mentioned and well wait is that true or untrue.
Is there a weighted.
The network.
On the way.
I'm not well exactly in ways, we're kind of in gaming now because we have bandersnatch and we have some very basic interactive things but.
Spence and then Greg maybe you talked a little there.
Well I'll, probably let Greg mostly going on which I would just say it kind of ties to what you what Reed said I mean, we've kind of dabbled in it of already through some of our interactive programming as well as on the licensing and merchandising side.
Consumer products and we're a business that continues to learn and so far of learnings been.
It's been good learnings.
We're happy with how it played out and hopefully we continue to kind of learn from here, but on a Greg if you want to add to that I'll just take one of our sort of point at it which is that we're in we're in the business of creating these amazing deep universes and compelling characters and.
People come to love those universes, and they want to immerse themselves more deeply and get to know the characters better on their Baxter is of all stuff and so we really were trying to figure out what are all of these different ways that we can.
<unk> points of connection we can deepen net debt band.
And certainly games is a really interesting component of that so whether it's game of applying some of the linear storytelling redoing like interactive bandersnatch and the kids Interactive program. That's been Super interested we're going to continue working on that space for sure. We've actually launched gains themselves as part of our our licensing and merchandising effort and were happy what we see.
So far and there is no doubt the games are going to be an important form of entertainment and an important sort of modality to deepen net fan experience. So we're going to keep going and we'll continue to learn and figure it out as we go.
Great well, if we have time for one more on my last question and answers.
Over the last five earnings calls how many times would you say Ted.
Hi, guys.
Great. Thanks, a lot.
I don't really know.
Thanks.
It's a good word net you've got it at the moment.
Thats the good work.
We have a real last question.
Of your Oscar nominated films this year, which did you enjoying watching and I can smell it.
It might take.
Yeah.
I am going into the <unk> I haven't got the diplomatically pass the question to Reed.
Chicago $7 per day.
Yeah.
White Tiger for NIM.
Chicago ahead of it for me.
Well Tiger for me too.
So I don't think of anything we have enough of it.
So I don't completely went out you just take the time on watch a really beautiful animated short that the Oscar nominated calls if anything happens I Love you.
That is really I think of a remarkable bit of storytelling in a way that people can really expand the universe of what they think storytelling can be.
Ted maybe you could wrap us up.
Awesome. Thank you so much for joining us on for the call on walking us through this.
I know that our what we're busy doing and I know that.
Some folks are on edge today watching the news.
Certain pockets of the wells like our friends and colleagues in Brazil, and India are having a particularly tough time know that our hearts and thoughts are with you as well, but think you will see you next quarter.