Q3 2021 Netflix Inc Earnings Call
Q3, 2021 earnings interview I'm, Spencer Wang VP of IR and corporate development. Joining me today are co CEO Reed Hastings co CEO and Chief content Officer tensor Randos CFO.
Our dogs to Greg Peters and CFO Spence Neumann, our interviewer this quarter is needed Gupta from fidelity as a reminder, we will be making forward looking statements and actual.
So it may vary Nitty, you'll know the greenlight to the ask your first question.
It is that they are great to be with you all again.
I wanted to say congratulations on all your success in the <unk> 44.
The amazing viewership of squid game my children will never play Red light.
Sure It was light again.
And your acquisition of Knights called studio and the announced acquisition.
The volatile story a company that we have a lot to talk about this quarter.
First I wanted to start with.
Which came in better than expected. So just help us kind of dissect the outperformance there.
Sure I can take that.
Right.
So great to see.
Thanks for the kind words and the opening in terms of what we saw this quarter for Q3, I guess, it really boils down to what we saw is sort of what we expected we talked about on the last call that we hope that we were getting towards that kind of tail end to the COVID-19 choppiness of the pull forward of sub growth into 2000.
<unk> 'twenty and those production delays that we're working through as well and Thats kind of what we're seeing so throughout the quarter. The business remained healthy as it had been throughout the year with churn at low levels down prior to the comparable periods. Both in 2020 and two years ago pre Covid in 2019, so retention was very healthy and.
When he's up viewing to remember maybe slightly down compared to the very COVID-19 distorted 2020, Q3, but up a healthy compared to 2019 comparable period and then what we saw as the quarter continued into September.
We saw acceleration in our growth, which is what we had been hoping for.
Expecting but it was good to see as we got into the strength of our schedule.
We had a couple big hits. So as you know you mentioned one with squid game the cost of the Pearl the first part of season, five, but all a lot of variety and quality programming throughout the quarter with things like never ever have or have never have I ever and he has all of that and chest.
Chestnut man in Copenhagen.
<unk> with the end of the quarter. So just that's basically the way it played out as we got into the strength of the schedule on top of already kind of healthy business fundamentals, we saw a bit of an uptick in growth.
Thank you for that and can you talk a little bit about the.
Weakness that you saw in Latin America.
And drove that and how is that making you think about the longer term prospects there.
Sure I can take that one as well another jump in.
For Latin America.
So that growth was a little bit soft in the quarter. It was.
Primarily.
We took some price increases.
What Brazil in Q3, and as not not unexpected that.
Tends to when we do those things slow down growth a little bit for the short term.
The good news is we only take pricing like that.
As Greg speaks to a lot when we believe we're increasing the value to our members and we believe we've done that.
And just sort of a short term slowdown in growth, but good for our business and we're already continuing to grow through it but it did slowed us down a little bit in Latin America in Q3, and so we also talked about in the letter for Latin America, and you can both of those markets are bit more mature.
Cure more tenured more penetrated than some.
So there are there other markets. So we would expect growth to be just a little bit harder to work work for but but still a lot of runway for growth in both of those regions.
I would only add that just like everybody else in the world we have to make the shows and films that people in Latin America Love and that's just going to continue to fuel our growth.
By way of example, we have is in its infancy.
Some of running up which is our largest original series from Brazil.
So it really and we think that these big high profile shows and doing to get those Mcgowan, Mexico, new season, coming up will continue to reignite growth in that area as well.
Okay.
We look ahead to Q4, you have an extensive.
<unk> content slate coming.
What's sort of the magnitude of impact you would expect to see on growth that insurance based on history or.
Huge number.
Additions that you've pulled into this service in 2020, making that relationship less clear perhaps.
Well.
We don't really break down the differential between the two other than to say that the what we've sort of been seeing throughout the year. We would expect to continue in terms of that healthy retention and then this kind of acceleration as we get past those market those initial market reopening.
With Covid past that Covid pull forward.
Well, we don't do the strength of our slate as you say across the board from Big returning English language series like the winter and Cobra Kai and.
Even unscripted like Tiger King and then non English.
Language series like.
The Casa like we've talked about already we have the final.
And.
Final final in.
Late in the quarter and then we've got big Big films like Red notice in order they fall.
So theres just a lot coming so going into that.
Strength of our slate plus stronger seasonal period, that's kind of playing into it with underlying healthy retention.
What.
They.
Fundamentally as we're in uncharted territory.
So much content.
In Q4 like we've never had so.
Our way through and it rolls into a great next year also.
Yes.
One quarter to add this many high profile films and returning seasons of our most of our.
Spent popular shows.
And we're in new territory.
Normalized post COVID-19 or pre Covid and COVID-19, although different ways that we're going to kind of.
That impact the metrics and the performance we're all looking at how that's going to impact, but we certainly think it's positive.
Great.
Alright, that's where you're going to say something.
Are most of the net of it is you've seen the guidance. So the guidance at $8 5 million paid net adds is is essentially in line with the past few years, even pre COVID-19, we were kind of in that 8% to $8 8 million ish range.
Right and then you mentioned 2022.
As the world.
I'm alive.
I was just crazy here.
We'll see what that looks like but how do you feel about your ability to sort of get back to that.
Seven and 28 million annual competition level.
I hesitate to even ask a question because.
We're starting to anchoring to that $25 million, which it was.
That could be helpful to understand actually why.
I'll add to that consistent range over the last few years.
Are we wrong to sort of anchor on that recent history to begin with.
So I'm going to take it.
I can think of.
The Big picture is no one's really sure annuity.
You can't come off.
Craziness of Covid.
And be confident of the next two years. So we're going to push really hard if you think about the big picture.
200, and something million, that's pretty small compared to PCP households, ex China. So just matching the pay TV households plenty.
Growth.
Streaming is developing.
Rate base, all kinds of devices competitors, helping that market growing.
Competition, obviously, thats a factor, but the amount of scale of content and entertainment that we have and the way we're set up it's like <unk>.
Lenny are incredible, but it's not that Ted conditions at the most incredible part is it's the system that <unk> built with highly distributed.
And it was one of our leaders in Korea, two years ago that commissioned it.
And so there's got to be other amazing ones like that to even.
Or I or any of us don't even yet know about.
That are digesting in the Netflix.
So we certainly hope so but theres no real certainly I wouldn't want to give it like management credibility of that.
We want it and we're going to push hard into it but I think we're all wrestling with the post.
Quint gave it how the things come back together.
Spent anything you want to add on that.
No.
You really hit it I mean at the end of the day, it's about as we talked about we're just trying to continually improve our service around content and the ability to discover that content with our choosing and driving conversation every day and getting better every day and if we can.
Do that and be that first choice in entertainment and ultimately that's what's driving that secular growth from linear to streaming entertainment and over a long trend that tends to be at least to date fairly predictable just as we saw through Q3, and if we deliver our guidance through Q4 over a trailing 24 month period that's about.
<unk> 5 million paid net adds or about $27 5 million on average, which is kind of where we've been the last few years, but to Reed's point, we can't predict with certainty, but those secular growth trends or are.
Pretty strong so long as we continue to improve our service.
Eight well pad turning it over to you.
About <unk>.
That game is top of mind or a lot of folks clearly for Reed and Spencer.
Okay.
Yes.
The series launch ever 142 million viewers in the first few weeks as you said in the letter.
Many of those would be right.
So market, South Korea, which makes it even more impressive.
You talked about how that's happened what what made the show.
All around the world, but I think it's really it goes into this kind of storied history of content creation.
<unk> game as Reed pointed out got picked up a couple.
Outside of go from there.
Korea team, who did recognize it to be one of what they thought would be the biggest title. This year. So good that it did but I can't tell you that we had the same eyeball on it to tell you that it was going to be the biggest title in our history around the world and to your point.
Joining Cree has been phenomenal in everywhere everywhere.
Couple of years right. So if you look at these numbers they are.
The internal viewing looks a lot like a local language show in the in any country. You look at it is enormously successful and that's 10 years trying to sell to show our team recognized something that nobody else did.
And created an environment for that creator to make a great show.
We are.
<unk> held something can go viral is really hard to predict.
It's super powerful when it happens and the show is to deliver the goods to.
To be able to deliver that much viewing.
And just have people talk about it in such short and that you can spoof it on Saturday night live because it so in the Zeitgeist I said it.
So.
And it's happened so we feel that when that's happening and you don't want it's happening it's a little hard to predict sometimes sometimes you think you've got lightning in a bottle and you're wrong and sometimes you think you've got a great reinsure that turns out to be lightning in a bottle for the world.
But remember.
That came for Korea, which super phenomenal, but we've had successes not.
But like that.
Cassidy propel from Spain, with Dupont from France.
The film Blood Red Sky from Germany from sex education in the U K where the.
The stories of the world increasingly come anywhere in the World and this is something that we really work on day in and day out.
<unk>.
And that seems that they're doing that around the world. The thing that they are mostly focused on.
Great Great windfall when these things happen, but they are mostly focused on a bunch of shows you never heard of.
But then are hugely hugely impactful in territory.
On Brazil, just not bad right now in Denmark for US is an enormous success coming up in the quarter.
Yes.
Spinoff version of call my agent from India.
Italian some hand of God new.
New seasonal Miguel. So these are all shows that are meant to be hugely.
Impactful and loved in territory and if they really catch on they travel a lot, but they're really focused on making a difference and.
Around the world non English content viewing has grown three times, we started in 2008, making content. So I started thinking about the impact of that and the impact of that growth.
Yes that we could put new storytellers in the world from everywhere in the world and they will do a television and film is made in the future.
Yes.
I guess would be your reaching close to 1 billion TV and globally.
With your content and economically generate a lot of morality or a great piece of content.
Content has to deliver.
What does success with gain and all of the other international hit.
<unk> talked about what does that mean for your ability to acquire the best stories enquired, especially.
In international markets, where there arent many global buyers of content yet.
Yes look the best content has always been competitive and wherever since we got into this we've been navigating these waters.
So the competitive space is to find the content. The one thing we can promise international creators is.
Possibility of having a split game experience, where the star of your show in Korea can go from 400000, social media followers to $15 million and five days, it's that kind of thing that happens on this.
That can happen on Netflix because we have this really great engaged fan base and we have this UI that recognizes and helps them figure out how to find the show they're gonna love, even if they never watched the show from Korea I think it is an amazing.
Proof point of the content, but it's also an amazing proof point of the delivery system that helps people.
Okay.
Right I mean, youre nine years into your original content strategy.
You had a steady stream of hit shows.
We have a high share at the top of MTV shows at any given time you seem to have at least one shall we hear that everyone is talking about.
Fine.
Can you talk about why we haven't seen sort of that consistency.
International film yet is there anything inherently different about getting.
Versus the hit show and if there are how can you sort of address that.
Over time, well remember, where there were a few years behind in the.
This is the way for our TV business, when we started making.
Meaning full budget original film about three years ago, So and in that time, we've had five Oscar nominated Best Pictures and some big Big films in terms of viewing you see that in the letter we published some of those numbers.
It's interesting that that's going to continue to grow and.
Well I don't have any doubt that we're going to see that kind of.
Excitement and the culture around our movies as we have in our television show over time.
Is that just had people love to talk about their favorite TV show in a different way than they do movies.
So I think maybe it's just it feels a little bit louder, but as you see in those numbers, we're getting big viewing on our original films.
Some of.
I don't know that yet or coming then of course quarter of this year in the first half of next year.
Great.
Switching gears to engagement for a second.
And doing a lot more with mobile in recent years, you've obviously got a mobile only plan.
Youre watching mobile games now.
Our biggest launch mobile trailer is a while ago Aflac recently.
It is a strategic priority at the company to grow mobile engagement specifically.
Well I think the strategic priority media is to sort of meet our members where they are at and.
The vast majority of our members engage.
Thus on a mobile device and so we wanted to make sure that.
When they are at that moment, and then sometimes thats when they are out and about that they have the opportunity to get a greater Netflix experience with their mobile phone and that could be to your point it could be trailers. It could be passed last something thats shorter or it could be actually just getting the next 10 minutes of squid game.
<unk>, where they were watching it in their home when they left and they had to go out and then we could have an uninterrupted experience. There. So we definitely want to target.
Those devices and do the best we can in terms of giving our members great experience on those devices as well.
And you mentioned you mentioned mobile game.
Because great to see you launched some gains in the quarter, Greg maybe talk to us a little bit about what you've learned from the experience of both producing and launching those games and mobile games, and Poland, Italy, and Spain as well as the Oculus game.
Yeah, I would say.
We're incredibly early in this process.
<unk> then mostly what we've done to date is about.
Essentially making sure that all of our systems are working as we expect so it's really about proving to ourselves that we can do the delivery and the way that we want and we're building all of the systems around it the same things Thats made.
Our service is very powerful for recommending movies and TV.
Assets with Ted mentioned sort of connecting great content creators into this audience. That's the capability that we need to build on the game side as well now. So we're really just sort of checking off the first bits of that process and that's going well, we got a positive trajectory, but I think what youre trying to get to which is all those sort of much more exciting questions.
B shows behind that which means like what's the business value how do we think about engagement with our specific genre titled performance. We're still many months and really frankly years into learning incrementally about all those details so really more to come there.
As a management team you've always been.
Is that companies are focused on the consumer which has led to a lot of success in television and film.
And I'm curious how can you improve the consumer experience and gain what kinds of new game experiences or new distribution models can you enable particularly.
<unk> laid out early on not having to worry about direct monetization.
Yeah, and I think it's important to note that first of all we're going to learn our way through that just as we have and the other content categories that we serve and will learn by basically putting stuff out there and then having our members tell us whats working whats not but we're excited about the idea.
That by taking away what we see is distractions from the core enjoyment experience associated with other models like advertisements or in <unk>.
Our monetization per title costs that we can really give.
Our members are much easier.
Easier.
Our direct enjoyment experience with game just like we have with TV shows and movies and there is a great flip side to that coin as well, which is that our creators can really put all of their energy everything theyre excited about into making that maximal enjoyment experience for the users the players.
Your games without having to worry about those other things that they have to do in other models in terms of monetization. So that's one really key area that we're excited to explore and another one is that we think that this just connects really well with the other work that we're doing we're creating all of these amazing universes and worlds and characters and.
Are those lines and we can attach to.
To the passion and fandom that our members have on viewing those on the video side with game experiences and allow them to go deeper and explore spaces.
It wouldn't have otherwise seen on the video side and so we really think there's a good connection and synergy there and overtime.
Story, we'll try and bring those closer together and sort of let those two worlds more influence each other and have a more direct connection, but again thats something that is years in the making we've really got it iteratively explore and none of us know exactly what that will look like because what's sort of find our way as we go.
And maybe imagine three.
Time from now and some future squid game is launching and it comes along with an incredible array of interactive gaming options and it's all built into the service.
And then of course, you've got your off Netflix aspects the experiences that we're building out consumer products all of that coming together.
Three years so.
Any like Disney still ahead of us and some of those dimensions of putting that whole experience together.
But boy are we making progress and.
So exciting over the next three to five years kind of closing that gap and hope to pass them on spectacular all around experience.
Together.
Great color and you mentioned spread game and this idea of kind of building the worlds and the experiences around the IP.
How tightly controlled.
Troll, the IP, our games and experiences that are created.
Other platforms Roadblocks for example has a lot of weight.
Inspired.
Activities in gains right now how do you think about that going forward.
It's just tremendously exciting to see something like squid game.
Blow up in the cultural Zeitgeist <unk> I saw your word here.
And then how that basically shows up that passion for the title shows.
Gains in these different places.
Definitely want to be part of.
Some of that passion in the games and the interactive experiences. We do will will be designed in we will get better and better at trying to make sure that those are available in land and are ready to be complements when that happens, but there is no I think monopoly on that package.
And so youll see it in other places and people are sending around tick tock videos or theyre doing their own sort of mini games, and roblox or things like that I think thats, great and I think that we should celebrate that fandom and that excitement as well.
Yeah that makes sense.
What do you think will be the hardest.
Passion about creating great gains what are sort of their skills and assets do you feel like you already have versus what you would need to attain and maybe you can sort of comment in a night school studio in the context of that why was that a perfect acquisition for you when you sort of survey the landscape.
Well, it's a whole different muscle right and creating games is this.
Alchemy.
Variety of stuff, where you have engineering you have the design in the story and then you have sort of a data element, especially in games that are sort of living and evolve as players interact with it so we've never done that.
Yes, so the hard part is going to be putting that all together and really learning how to be successful at that.
And again back to your point previously we've only been in the original game for less than a decade, and we've done a pretty good job at building the capability to be better and better at that and so our plan is to essentially followed that.
Before objector and apply the same kind of approaches that we have and really be focusing as a learning organization or how do we advance those skills and I think we're going to take a bunch of different approaches to try and be successful in that space. Just like we did in movies and TV shows if you think about.
License to partner produce to.
Same to produce there is multiple avenues that we get you to producing incredible entertainment experiences for our members I think we're going to take a similar approach with games, which will have multiple different approaches including.
An internal game development capability in that internal capability really allows us to sort of push the edges on.
What.
Sell active storytelling and how do we bridge that more tightly with the linear storytelling that we're doing on the video side. So we want to build that up and one of the ways to sort of accelerate that process is when we find the right opportunities through acquisition and Thats, what we did with night school and we're tremendously excited about that.
And our aim in specific because they've really the core of what they've done is to try and explore story and narrative essentially as the central game mechanic.
That fits really really well with what we're trying to do and so it's been great to get them.
Onboard and.
And to hear their thoughts and ideas and I expect it will be a sort of a rich.
Partnership over years to come.
Great.
Go ahead.
Greg and expense or how do you want to set any expectations in terms of the future at night schools.
Again, it's something that we will be opportunistic so I.
And while I don't expect us to go on a tear.
<unk> buying spree or something like that this will be one of the tools that we use and we'll use it opportunistically when we find a great. So a great opportunity out there.
Spencer do you want to elaborate on that I think you hit the nail on the head Greg I think maybe as you can tell from our track record we are barely.
I would say elective when it comes to M&A, but as Greg said, when an opportunity presents itself, where we feel like were aligned with the company I think thats an opportunity we will take but again it's not.
Nothing more than that.
And the only thing I would add just more broadly than it is just Greg talks about touched on this which is.
So this is going to be that we're learning into this so this is in terms of business impact overtime from games. This is not just months, but years of building. So even in our most kind of ambitious success scenario. It will be years, we would expect.
Before this could have a meaningful impact on our business. So very excited for the long term, we're going to be patient we're.
<unk> moved quickly and learn quickly, but this is a multiyear build.
We're excited to see what you built.
Moving over to you Ted you announced the acquisition of the volatile during company.
Carter as well can you talk about your vision.
We're going to.
Yes, I think the Dulles characters that were created over the years I have had incredibly enduring staying power for kids and parents.
They've done really well in feature film and I think we had an interesting take when we entered into our commercial relationship with the storytelling with El storytelling company.
To make a.
Very kind of feature.
Future quality animated series based on these characters and books.
And through that process.
Went through the organization.
Our live action film television teams, our film series teams and everybody going through thing and there was enough.
Interest and desire to create in this universe, we thought it would make sense for it to be up to all reside here at Netflix creating stories for the world from this universe with these really richly developed characters that have done great like from James and the giant Peach.
BFG and of course, Willy Wonka and all the characters are coming from that.
We're doing an origin story series on the weather.
From Willy Wonka.
And we've had so much creator of interest.
From all of our overall partners.
I wanted to tell stories in this world that we thought it was a great partnership to move forward on and bring it inside of Netflix and see if we couldnt preserve these great stories for the future.
And I think by the way will tell it will create value in our game and our game World certainly can continue.
Obviously world and our consumer products group is just just begin their teeth into it now.
Ted maybe more broadly what have been sort of your key.
<unk> learning developing the kids content vertical over the last.
Five years or so what does it take to really succeed with this audience.
It's still a long term out a long time out.
Investment it feels like it's been we've been at this a long time, but the production cycles on these feature films by way of example, it could be three to five years.
So that's the learn is we're up we're pretty impatient lot. So were trying to run it as best as we can.
This one part of the business that it's going to take a little bit longer to prove itself out or not but I have found is though that we've got some of the greatest storytellers on the planet, making their next projects at Netflix and we're really excited to see how they're coming together.
What I believe is that you don't need necessarily this enormous machine to create brand loyalty around characters and film we've had great success on without any of the machine without any new machine, just being able to be a very important part of kids viewing life. So I think we've got a pretty focused on like we do everything else on.
How good is the storytelling how good is the execution upgraded the production value.
Are we advancing the art animation or the animation world continue to attract the best and brightest.
Those things I think we're on the right track for and I think it's going to take a couple more years to really.
Play itself out.
Yeah.
Well, yes.
Well definitely have an audience for your dollar content in my household.
Alright.
A couple of you mentioned consumer products, you recently launched an ecommerce site as well as our partnership with Walmart.
Can you talk about how it developed your plans are for consumer products and what are you trying to.
To achieve over the long term I believe that the consumer products is really a great way to enhance the relationship with content in pounds. So you can read in.
That's our our modeling for us right now.
Yes.
If youre logins per day, when you show up in that track that youre going to be.
Can you talk a bit about it.
So the ability to do that I think is real.
We have it in our wheelhouse to be able to do it and to grow at Big I don't think even a huge success against the revenue and margins of the core business that it will look like it will make much difference in terms of the.
Core for US is that it gets very very big.
Enhance.
Hence as the Hawk ability.
Zeitgeist moments around our content and give fans a way to express that tandem in a way that amplifies it attracts more fans.
Great. Thanks.
Switching gears to margin always.
Topic.
And as you invest in gaining and some of these other initiatives that we've been talking about on this call.
How comfortable are you doing that within kind of the 300 basis point margin improvement per year, particularly revenue growth sort of slows below the 20% level.
Sure.
Sure well as you pointed out were our revenue growth remains healthy it is but it is at a right around at that point, so with our guidance, we're guiding to roughly just a tick under 20%, 19% revenue growth for the year still very healthy revenue growth I mean, that's on a base of roughly $30 billion of revenue. So.
So if we can sustain.
Anything around those levels.
That's pretty rare air that scale in and so we'll work hard to do that and it comes down to what I said before ultimately.
We control that is yes.
Dust control it has to make our service better and better every day through this amazing variety and quality of content.
Better discovery of that content and connecting with our fans around the world. So that's that's what we're focused on if we can do that and.
And we can kind of manage our business in a prudent scrappy way.
We're committed to doing so over the next few years at least we're committed to making those tradeoffs growing healthy strategically investing in the business and growing.
And our margins at that roughly three percentage points per year on average on a kind of.
On a multiyear basis.
And longer term when you think about what it takes to fulfill the content needs.
Everyone you want to reach every day of the week do you look at your current.
Current kind of $17 billion of cash spend and say well, it's easy to imagine that being two <unk> or three ex that level to achieve what we want to achieve.
I remember.
They're used to throw out an estimate that there's something like $100 billion being spent globally per year.
To produce content and then share that number is higher now but is that sort of the context, you think about and do you feel like youre still relatively early or fairly far along.
I can jump in.
Well.
I'll take it go ahead.
Yeah.
No.
Okay, we will find ways to spend more on content.
So no the short of it is that we.
We think we're still early days and when we talk even in the letter about the secular growth here is this transition from linear to streaming entertainment even in our most of it.
Most to kind.
Mature markets like the U S, which we show in the letter we're at between 6% of <unk>.
TV share in terms of screen time and so.
In categories, we've talked about gaming, we're literally just getting started so who knows where that's going to take US animation. We talked about were just a few years into.
Our long cycle. These non English language series and films around the World, where we're now producing.
And roughly 45 countries around the world to be more than 50 next year, but again still early days. So we think we have a super long runway here to address those.
Upwards of 1 billion.
Pay TV households.
Households, broadband households, every measure it around the world So.
We look at is are we continuing to grow in a healthy way driving acquisition retention more viewing delivering more joy to our members.
I don't think Theres, a precise number there and any other than that we have the ability we believe to grow across all of those content categories for.
For the foreseeable future some more than others right in terms of pace of growth. So some of those are just earlier in higher growth, but we are growing and growth across all of those content categories and we don't we don't see a ceiling.
For the foreseeable future.
And since I have throughout that number maybe I guess.
Just add one minor comment which is look I think we.
We feel very confident about the next couple of years, given just the trajectory of the business I think we're just going to feel our way along and monitor all of those things that's been talked about right, which is engagement and intention and things of that nature to sort of judge the appropriate level of spend.
Morning.
Read when I said two extra three axes.
Thank you Harold.
Really entertain the world.
If we even ex China, if we're able to pull that off.
That would be the place that the whole world goes to for most of their entertainment.
Then youre definitely thinking too small now it'll take a couple of decades to get there it's not overnight, but in the long term we got.
Got to be able to monetize it so we got to be able to have the revenue growth or margins, but it would be incredibly satisfying if we could build up.
<unk> much bigger content budgets that we have usually deployed for our members as well.
All of those categories.
Maybe we have time for two last questions. Please.
Great.
Greg I'll I'll switch it over to you for a second.
It's a it's a blessing and occurred Netflix has grown so fast that I imagine the company has not been able to sort out who's got it dies and cross the Ts along the way. So I'm curious as you look around the company's operations.
What are sort of the biggest areas of optimization that you see.
And maybe more specifically.
On the studio Watkins started taking a tech company approach to studio operations unlock overtime, and what's kind of the magnitude of gains to be had.
Well as you know, it's still a work in progress.
Progress, but I'd say, we're constantly work in progress because we constantly aspire to be better and better and one of the things I love about working here is is that.
Unseasonable appetite for improvement and one of the areas one of the biggest dimensions that we're seeing which is I think really apropos to sort of what we've been talking about in this call is how we go from being.
<unk> really a U S company that has international relations International operations to really have a truly global company and we can see.
The opportunity there whether it's <unk>.
Seeing content like squid game or loop Pan our cognitive appel.
And we really wanted to do that more and more and more and so we're working through how do we as a company.
We have set ourselves up to operate even more effectively in that context and do even more of what you are seeing with those titles. So that's a big dimension of growth for US and then on the studio side. We're really excited about how do we leverage some of the what we have is DNA in the company around tech.
And things like that to try and figure out is there a way to better serve our creators and our creative partners give them a bigger palette of bigger envelope.
To work from and I think one of the exciting areas around this is again.
That sort of platform. If you will of creation that sort of a set of tools and capabilities.
<unk> abilities, if we can do that well, we can sort of give that to everybody all of our creative partners around the world and give them a sort of a bigger place to stand from Intel their story and that's pretty exciting.
Great.
Last question for everyone.
What is your favorite.
Sure.
Joe or movie on Netflix other than it's got game.
I was going to go with it made.
Plus the incredible character drama.
So well put together to the investor audience I'll bet that its EBIT more pleasing it's good kit.
Hi.
I'm going to go with.
Chestnut man latest Danish series, so atmospheric and since I haven't been to the American a longtime I felt like I was there by watching.
I can go well.
Got it and that's great.
I love the <unk>.
Enjoying made but I'm not all the way through.
<unk>.
I'll stop there.
Okay reached all my Thunder on made but I would say that the final season like the deep about is not disappointing I can't wait for the second batch to hit so I wish I could talk about it with everybody.
It's really it's really about that.
The excitement of a big budget feature and every hour of that show so it.
Really incredible.
For me I've got two episodes left of Squib game, but I would say the other one is sex education season, three was with my favorite reason one as well.
Dan do you want to pick it at home.
I wanted to say first of all.
Thanks for doing this today we've had.
But I think.
Tremendous quarter delivering on films and television shows that people really love and love to talk about and if we keep doing that well that's what fuels. Our growth. We are focused on delivering value every time one of our members tries to figure out what they want to watch next every time they figure out how.
They want to spend for to entertain themselves, we want to be in that equation and we do that I think if we focus on that the way we have for films, where we have for series and then we will for games that we're going to be.
Delivering hours and hours and hours of entertainment and hours and hours of Joy for our members and we're midway through October.
Tober and in Q4 is still to come whereas our biggest film that we've ever made star-studded crowd pleasing movies like red notice and harder they fall and don't look up returning seasons of our most popular shows like the witcher.
Like I said, the propel you Emily in Paris, Cobra Kai and it's.
Just in Q.
Four.
So if we keep doing what we're doing and you keep coming back we're going to keep you entertained and thanks for visiting with us.