In the paragraph, Spencer Wang introduces the Netflix Q4 2023 Earnings Interview and announces changes to the format. He then asks Ted Sarandos about the decision to acquire WWE Raw rights. Sarandos explains that the partnership is a perfect fit for Netflix's sports business and will provide 52 weeks of live programming. He also mentions the multigenerational fan base of WWE and the potential for global growth. The deal is expected to benefit both companies and contribute to Netflix's growing ad business.

The speakers, Spencer Wang and Ted Sarandos, are discussing a recent deal with the WWE. They are excited about the deal and see it as fitting into their existing plans to spend $17 billion a year on programming. They also mention the potential for creating shoulder programming around the WWE, similar to their successful approach with Formula One. The deal is long-term and they are enthusiastic about getting into sports entertainment.

The paragraph discusses the future growth of Netflix, specifically focusing on its ARM (average revenue per member). The company expects healthy double-digit growth in 2024, driven by continued member growth and the full year impact of their 2023 net adds. They also mention their pricing philosophy and the potential impact of their ads business, although it will not be a primary driver in 2024.

Netflix is focused on continually improving their service in order to drive subscriber and revenue growth. They believe that their paid sharing product, which is integrated into everything they do, will help sustain healthy revenue growth. However, they also recognize the importance of organic growth and have seen positive results from recent price changes and better-than-expected churn rates. They are constantly iterating and improving their product to increase the value for their members and ultimately drive revenue.

The company's model focuses on improving their core offerings, such as films and series, live events, and games, to provide more value to their members. This, combined with their paid sharing and ads work, creates a more effective engine for revenue growth. EMEA saw particular success in the last quarter due to a strong slate of content and improved value translation. The company's primary focus is on revenue growth, which saw a 13% FX neutral growth in EMEA in Q4.

In terms of the paid sharing benefits, the company has reached a point where it is a standard part of their services. They plan to continue improving their value translation engine and targeting new cohorts in the future. When it comes to advertising, their main focus is on increasing scale, as they have seen significant growth in recent quarters.

The company's MAUs are currently at 23 million and are expected to continue growing. The target number of MAUs varies by market, but the company sees potential for growth in all markets. The company plans to make their ads plan more attractive and engage with partner channels to drive growth. Their second priority is to improve technical advertising features and go-to-market capabilities, such as targeting and ad relevance. They also plan to launch more ads products and build better relationships with advertisers. The company is optimistic about the long-term revenue potential in the advertising space, which is a $180 billion opportunity. They believe they are well positioned to capture a portion of the ad spend that shifts from linear to streaming. There is also a question about launching an ads plan in other countries, and the company is considering it.

Greg Peters, Chief Operating Officer of Netflix, believes that the company has a lot of work to do in order to reach the level of maturity and impact in the countries where they currently operate. While he doesn't rule out expanding into other countries in the future, he notes that the majority of global ad spend is already in the countries where they operate. Netflix is already working with Microsoft to develop technology for their ads, and they have plans to continue investing in their own ad tech and sales infrastructure. Despite this investment, they expect the margins on their ad business to remain high.

Greg Peters, Chief Operating Officer of Netflix, discusses the upcoming changes to T-Mobile's subscriber benefit, Netflix on Us, which will convert to Netflix's ad tier unless subscribers upgrade to an ad-free tier. Peters explains that leveraging partner channels is an important part of their subscriber growth strategy and that the change will open up new opportunities for bundling the ad plan with lower-priced partner offerings. He also mentions the challenges of filling the increased inventory but sees it as a positive problem to have. The conversation then shifts to questions about content, with Ted Sarandos, Co-CEO and Chief Content Officer, answering a question from Jason Helfstein of Oppenheimer.

Netflix's mix of content spending will not significantly change, with a healthy balance between original and licensed titles. While licensed titles may offer more value for the programming spend, original series are still a key focus for the company. Netflix's original movies have been attracting large audiences, such as Leave the World Behind and Society of the Snow, and have been successful despite recent management departures and Hollywood's willingness to license post-theatrical movies. Fans care more about the quality of the movie than its budget or release window.

Ted Sarandos, the Chief Content Officer of Netflix, discusses the success of their original films and their strategy of a blend of first window, second window, and deep catalog content. He also mentions their ability to help make TV shows popular and generate joy for their members. Sarandos believes that Netflix can add unique value to studios' IP and is happy that studios are more open to licensing their content to Netflix.

Ted Sarandos and Spencer Wang discuss the success of Netflix's animated film Leo, which has resonated with audiences and led to repeat viewings. They also mention the success of other animated feature films on Netflix and the potential for more original IP in this space. They then address questions about engagement trends, which have been steady and increasing globally and domestically, and how paid sharing has impacted this.

The speaker discusses the growth of their gaming portfolio, specifically the success of Grand Theft Auto Trilogy. They are pleased with the engagement and download numbers, and have tripled game engagement over the past year. They see gaming as a huge opportunity and believe it can be a strong component in delivering entertainment value to subscribers.

The speaker is discussing the size of investment in a new initiative and the success they have seen so far. They mention wanting to prove they can effectively translate the investment into member value before increasing it. They also mention that their games investment is small compared to their overall content budget. In response to a question about offering popular games like Grand Theft Auto on Netflix, the speaker says that licensing existing games with exclusivity will continue to be a key part of their strategy. They have learned that recognizable games, especially those based on well-known IP, are working best for them.

Netflix plans to continue bringing popular titles to its members through licensing deals and exclusive content. They have recently implemented price increases in the US, UK, and France and will resume their standard approach to price changes in other countries. The company will assess when they have delivered enough value to justify a price increase and use the additional revenue to invest in more content for their members. This is seen as a return to "business as usual" for the company.

The speaker, Greg Peters, is responding to a question about Netflix's competition and their decision not to make ads the default option for their members. He explains that they want to attract members to the ad tier based on its benefits, such as more streams and lower price. He also mentions the size of the market and how Netflix plans to compete by playing to their strengths, such as having an engaged audience that watches popular content. Another question is asked about competition.

Eric Sheridan from Goldman Sachs asks how the current competitive landscape and content will impact Netflix's content spending in 2024 and beyond. Ted Sarandos and Spencer Neumann both agree that competition for top programming will remain fierce, and Netflix will continue to invest in content at a healthy rate. They believe that their strategy of reinvesting in the business and gradually increasing content spending has been successful and will continue to drive growth and profitability in the future. They also mention the recent announcement of a partnership with WWE as an example of their disciplined approach to content spending.

Ted Sarandos, Spencer Neumann, and Spencer Wang discuss the potential for new areas of growth for Netflix, but Ted emphasizes that there is still a lot of room for growth in their core business of movies, television, and now games. He believes that they should focus on improving their current offerings rather than searching for new opportunities. They also touch on the topic of capital allocation and M&A views for the next 12 months.

Netflix's CFO Spencer Neumann stated that the company does not speculate on potential M&A activity, but their historical bias is to build instead of buy. They hold a modest amount of debt and fully fund their business and new initiatives, such as investments in ads, live content, and games. Neumann also mentioned that they will look at selective accelerators for organic growth, but are not interested in big linear assets. In terms of capital allocation, Netflix aims to hold about two months of revenue in cash and return excess cash to shareholders through buybacks. They currently have over $7 billion in cash and expect strong cash flow in 2024.

The key priorities for Netflix in 2024 are to continue to grow their subscriber base and increase the amount of entertainment consumed by their members. This will be achieved by improving their content offerings, including films, series, games, and live events. The company sees a lot of potential for growth in their core business and aims to win over more households and increase the amount of time spent watching their content.

The company is focused on improving its revenue and operating margin by growing its ads business and optimizing pricing. The co-CEOs are excited about upcoming shows and movies, such as Griselda, Avatar: The Last Airbender, and Beverly Hills Cop 4, and thank the teams at Netflix for making it possible.

The speaker thanks Ted, Greg, and Spence for taking questions from analysts during their first live streamed video format. They also thank the audience for tuning in and look forward to their feedback to improve future streams. The speaker ends by thanking everyone again and saying they will see them next quarter.

This summary was generated with AI and may contain some inaccuracies.