Welcome to the Netflix Q1 2017 earnings interview. I'm David Wells, CFO. I'm joined today on the company side by Reed Hastings, our CEO, and Ted Sarandos, our Chief Content Officer. Interviewing us today will be Doug Mitchelson from UBS and Scott Devitt from Stifel Nicolaus. We will be making forward-looking statements. Actual results may vary. Doug, I think you have the first question, over to Doug.
Thanks so much. Actually, first question for you, David, and then one for Reed. David, can you just talk a little bit about the net add results in the quarter versus expectations and any dynamics underlying the second quarter guidance that you want investors to know about?
Well, I think what's written in the letter and what I'll reiterate is that we're not spending too much time understanding any particular quarter. We were with under 100,000 in the U.S., under a couple hundred thousand in the international versus our expectation. We had a particularly back-weighted first quarter, which we don't usually have, that explains some of the sort of net adds guidance versus actuals as well. We have a pretty strong guide for Q1. I think looking at our Q4, which is one of our strongest quarters ever, and a pretty strong Q2 guide, we sort of look across that, like we put in the letter and say, "We're still on a great growth path, and our content is working, and we're pleased with the international growth, and we've got a lot of growth left in the U.S. as well.
Is there anything you would highlight in the second quarter in terms of an easy comparison? Last year, you talked about price increase, buzz in the press having a negative impact on U.S. dynamics, the content slate. Anything you'd highlight driving the result?
The obvious one to talk about, and Ted will talk about in more detail, is the content slate. We talked in the January letter about "House of Cards" pushing into the second quarter. We've got a particularly full slate in Q2, which relative to Q1 is a little heavier, and then that's comping off of last year's Q1. We had a pretty strong Q1 as well, I think that sort of explains some of it on the margin. I think the background trend is just a very strong adoption of internet streaming. Again, if you look across 12 months trend, we've still got a lot of great growth. We're growing well on track in international. We're continuing to growing in the U.S., and quarter to quarter, you'll see some fluctuations, and some of that is explained by the content slate.
Reed, up front, I wanted to turn to you at a high level. I think you mentioned in the letter you're about to cross the 100 million subscriber mark. You're about a decade into this. I think in last quarter's letter, you talked about the next 10 years being tumultuous. I was hoping you'd talk a little bit about what you meant by using that word in particular, and what are the challenges and opportunities as you look out over the next decade and target that next 100 million subscribers?
We're super excited, expecting to cross 100 million this weekend. That's a big accomplishment, but it's really just the beginning. When you look at YouTube having 1 billion active users and 1 billion hours every day, when you look at Facebook's multi-billion numbers, we see that the internet is just a phenomenal opportunity. Of course, we're a paid service, not ad-supported. We're not as deep in international as those companies, but we definitely see a big opportunity around the world to just continue to do what we've been doing, which is make fantastic content, get people really excited about that content, and then we're just continuing to grow.
Great. Thanks.
Just continuing on the role of content, was wondering if you can talk a little bit more about the way that content releases do impact seasonality of the business as well new releases of new shows, of say a Dave Chappelle show relative to, say, a Season 5 of a "House of Cards" and the differing impacts on gross and net subs. Thanks.
Scott, I would just say we've said previously that subsequent seasons of shows that have a big audience that are very popular tend to have more impact on the business than introducing brand new IP. That's why in the second quarter, you're seeing new seasons of some of our most popular and most acclaimed shows like "House of Cards," "Orange Is the New Black," "Unbreakable Kimmy Schmidt," "Bloodline," "Master of None." In the first quarter, it was pretty heavy on new IP, but we were super pleased to have such a big breakout on "13 Reasons Why." It just came on the last day of the quarter. As well as "Santa Clarita Diet," "A Series of Unfortunate Events," "Iron Fist" on first-season shows.
Something like Dave Chappelle comes along, and it's in its own class in terms of excitement for consumers and viewing and excitement around Netflix. We're looking forward to have a third special from David next year.
Scott, you can think of that content as making a little trickier to do the quarterly forecasting. For the first half of this year, we're about eight and a quarter million net adds, which is what we were last year. Again, it moves itself around, it levels out. I wouldn't get too focused on predicting each quarter by the content. We're continuing to learn on that. Mostly, we're just trying to do better and better shows that are more and more popular.
As it relates to the international business, you noted some markets that are doing extremely well outside the U.S. and then other markets that are still progressing. Can you talk about, particularly in some of the larger markets where you feel like you're under-penetrated, where the largest sources of friction are to increasing the subscriber base in those markets?
I would say, and I'll pitch it to Reed afterward, it's not necessarily a source of friction. I mean, we're pretty careful about not talking about specifics by market for competitive reasons, we have said that we experience a wide variety of adoption curves in different markets. We've seen some markets come out of the gate really fast. We've seen some that have grown slowly and then really caught up and seen a great acceleration. I would say each market's different. Each one seems to have a different word-of-mouth adoption pattern. Increasingly, what's new for us is that we're more and more global, and the more that we can release these shows that have wide global appeal, we're getting the benefit of that wide global word of mouth and the network effect of that great scale.
Growing to 100 million and beyond of global subscribers is really going to benefit us in having these shows that travel across multiple markets. I think we're not particularly focused on any one challenge in the larger markets. I think it's about continuing to make payments available, continuing to improve the product, continuing to improve the content in that market, with our global originals being the largest part of that. Reed, I don't know if you want to tack on anything there.
Yes, Scott, as you might remember, first couple of years in Brazil, we were struggling with a number of aspects, in particular getting the right content where our service was getting watched a lot. I think it's pretty parallel to that. Of course, not every market is the same as Brazil. We have to learn market by market. It's nothing that's very concerning to us. It's just to note that in three of the regions, LatAm, Europe, and North America, we've got the formula. We're executing down it. In Asia, Middle East, and Africa, we've still got a bunch of work to do, particularly around getting enough of the right content that people want to view, that we get our viewing hours higher and higher.
Just to follow on to the international topic. There have been several markets where you've launched non-U.S. originals, and was interested in terms of the difficulties or ease with which you're having in finding talent in those markets. Secondly, in those markets at which you're launching originals, the benefit in terms of the halo effect of other markets actually latching onto that content and viewing it that's driving subscribers in those markets as well.
Well, I could tell you about we launched this past quarter "Ingobernable" which is a Spanish-language original starring Kate del Castillo, that had a huge impact on us throughout Latin America, but also outside of Latin America and throughout the Spanish-speaking world. Our ability to get in, learn the production infrastructure, get to know the talent, have the talent get to know us, that's one of those things that gets a nice accelerator as Netflix becomes better and better known around the world. That the top talent in those markets want their shows on Netflix. Nothing is easy, but that is something that we've had a lot of good fortune with, finding the great talent and the great shows locally. It has been having a lot of impact outside of the country of origin.
Thank you.
The international arena is a pretty rich topic, but I want to move back to the U.S. First, Reed, you mentioned consumption. I think investors would love to have an update on consumption, both in the U.S. and overseas. What is the hours per day on average? Is it still growing for both cohorts year-to-year? Anything you're willing to share at this point in time?
Our viewing is very large and growing, but nowhere near as big as YouTube. We've definitely got YouTube envy, and we got a lot of room to go. Some of the new shows, like Ted was talking about, our movie out of Korea, "Okja" has great global potential. We're finding great talent around the world, and that's what drives up the viewing.
I also wanted to hit on the U.S., even though a lot of the growth comes from international, when you think about the U.S., a lot of investors are worried about the maturity and whether that sends a signal that you could ultimately have some issues with penetrations overseas. I think, Reed, it starts with you and the vision for 60 to 90 million subs. Is that still the vision? Ted, as part of that, what do you have to do to execute on getting those subscribers that Reed is looking for? For David on that topic, is there anything you see in the trends? I know you want us to not dig into gross adds and churn on a quarterly basis too much, it's sort of what we do.
Is there anything that you're seeing that suggests there's a maturity wall coming anytime soon for the U.S.? Thanks.
U.S. market is continuing to grow very nicely. I don't see any fixed wall. Of course, every incremental 10 million is a little harder than the last 10 million, our content keeps getting better, those forces offset each other. When you look at the last five years, everyone's worried every quarter about saturation in the U.S., we've just continued to grow. That doesn't mean it's going to be inherently forever. We certainly feel good about the near term as we're expanding and just getting a bigger content budget, more shows, more marketing. All of that feels very good.
A component of that, obviously, is the international appeal of our global original shows, but also finding those sweet spot local original shows that offer some connectivity with the consumers, that for some cases, it'll be the thing that introduces them to Netflix programming, and they fall in love with the broader slate of content.
Finally, Doug, on your last one.
I wouldn't say anything different from Reed. My God, if we can get penetration levels outside the U.S. to be anywhere close to the U.S., you're implying multiple hundreds of millions of global subscribers with the U.S. beyond 50%. I'm not sure I understand that point of the question other than to say that the concern as I hear it voiced is really that we wouldn't be able to get to U.S. levels of penetration outside the U.S., and we've got some markets that are starting to get there. I think we punched through that sort of concern and anxiety, and now we're really at a phase where we're starting to really benefit from the large pipeline that Ted is building and his team are building. We're really starting to have some time in multiple markets that are somewhat new to us, as Reed described in Asia.
A couple of years ago, Doug, there was a bunch of fear about the 30-million sub wall, where AOL had hit that and HBO had hit that. The thing is, everybody watches TV, and nearly everybody has the internet. I don't see anything that's going to stop Netflix from getting to most people in the United States, and then eventually, hopefully, most people around the world. We're just going to focus on the every day of making the service better and better.
The one follow-up to all that is, Ted, are you specifically targeting perhaps older demos? You mentioned international, with the product flow that you're working on?
The key here, Doug, is you've got this many people, an incredible diversity of taste. You have to have programming that really appeals to a broad demographic. Obviously a show like "13 Reasons Why" appeals much younger. "Grace and Frankie," which had a really successful third-season launch, obviously appeals to an older demographic. The key is, people love television. People love to be entertained, and the definition of what that thing is that you're in love with is different for each age, for each country, and having a lot of at-bats increases our chances of having a deep connection with consumers. That's why, in Q2, we're launching a new season of a show, a brand-new stand-up comedy special, documentaries, kids shows every week coming up.
The chance that you're going to connect with somebody and it becomes their favorite show or the reason they have Netflix gets higher and higher as you're able to do that.
Great. Thanks.
Sticking to the U.S. and speaking of genres and different types of content, you talked a little bit about Dave Chappelle. Why the sudden increase in stand-up comedy? What's the price to value that you find that you're getting out of that type of content?
Well, there's always been an interest in stand-up comedy. It was actually back in our early original content days in the Red Envelope Entertainment, that's all we did was produce original stand-up comedy and acquire documentaries and foreign language films. Always had good luck with it, just on a very small scale. The format lends itself really well to what we're doing in that it's uncensored and it's commercial-free, that it allows for a lot of creative freedom. The fan base for these folks is very big. Dave Chappelle, his return to stand-up comedy was a big event in the culture. You could drew series-level and movie-level viewing on some of these stand-up comedy specials, if you pick them right and invest in them properly. These were big-ticket investments, but they're also performing like big-ticket content, so we're thrilled with it so far.
Family and kids content, Ted, you mentioned a little. Talk more about that in terms of the interest in extending deeper there. On that topic as well, faith-based programming or conservative programming, Hollywood does lean a little in one direction. Seems like there's a pocket or opportunity there to serve a very big market.
Yeah, absolutely. We're trying to find the content that people love, that's different for everyone, as I said earlier. The faith-based market is something that we're engaging on the edges, but we're looking to do a lot more. We're also looking for our kids and family programming. The really exciting thing is when you get something that can be viewed by both. That's the kind of phenomenon around "Stranger Things" or "Fuller House," where you have these co-viewing opportunities that are so rare on TV these days, where it's a kids show that parents enjoy watching, and they don't have to cringe when they watch with their kids.
Finally on this topic, the Disney deal, how's that progressing, the interest in renewing that content specifically or content like that? What's your interest in, I believe there's a Paramount deal that's available in the next few years as well. Thanks.
Like I've said before, our interest in Disney is different than an interest in a pay-one output deal from a studio, because Disney has really centered their brand on a couple of really important tentpoles that perform very well on Netflix and obviously perform well around the world. It's been a great relationship and continues to be a great relationship with Disney as a company, producing our Marvel series, as well as being their pay-one partner and several hundred hours of their catalog all the time. It continues to be a great partnership, and they're a great supplier of content that people love. We'll see.
While the Marvel series is global, the Disney pay-one is just U.S. and Canada. It's not a global deal.
Correct.
Thank you.
From my end for Reed, over the past few months, it seems like we've had a number of important executives depart Netflix, Chief Product Officer Neil Hunt, Chief Talent Officer Tawni Cranz, VP Global Television, Cindy Holland. It seems like an unusual number of departures. Usually, you're the one taking other companies' executives. Any comment you want to make around this dynamic?
It is unusual. The last time we had an officer leave Netflix was 2012, so it's quite a while ago. We've got a search on the chief talent officer, insiders and outsiders, then we're fortunate to have Greg Peters take over for Neil Hunt. Greg's been a long-term Netflix veteran, really knows the organization and excited about taking it forward, and that transition will happen in about three months from now. No particular signal that investors should take from this.
This just happened to line up this way.
That's correct.
Thank you. Ted, you mentioned last quarter that it would be a second-half weighted content slate this year. Can you give us more of a sense of why you feel this way? Obviously, 2Q looks pretty big with both House of Cards and Orange Is the New Black. Is the second half going to be even bigger?
Well, we're introducing a lot of new brands in the second half of the year, including some of our more aggressive moves into the movie business. Bright actually will be in the fourth quarter, which is our big Will Smith film that we think will give consumers and everyone who watches this space a better idea of the kind of things we're up to in the movie space, which is those movies that you would see in the theaters, but they're available to you day and date on Netflix, and that they look and feel like movies of that scale.
I'm sure you'd love to expound on this topic in detail for the press. Any thoughts on the writers' strike?
Look, we're keeping an eye on it like everybody else, and like everybody else, our productions would be impacted if it happens. We may be impacted a little bit less because we're not on such a rigid production schedule where we're not producing for the fall and the summer. We're in year-round production. Some of our productions would be held up in the event of a strike, which our fingers are crossed that that won't happen.
The last thing I did want to follow up because I think I let you get away with not giving us an update on the usage trends. Are you guys willing to make any comment on whether usage is still growing and in the U.S. and overseas, and what level it's at?
Correct. We said the viewing is strong, growing, healthy, we haven't given specific numbers.
Okay. I missed that nuance again. Ted, are you willing to give-
We did tell you that our subscribers have spent about a half a billion hours watching Adam Sandler movies since Ridiculous 6 launched.
I'm going to assume that's a good thing. I think that, Ted, for you, is originals as a % of spend and as a % of hours fairly consistent? Is there an inconsistency there? Anything strategically that you're focused on in that dynamic?
No, pretty consistent to the investment and the hours spent watching. That's why we've said before that the investment in original programming has been efficient. That's what we mean relative to what else you'd spend the money on versus the hours of viewing. We're not driving towards a target of a % of original programming versus not. We're just trying to find the great things for people to watch that move our business and grow the subscriber base.
Oh, great. Thanks.
I'm going to try to help Doug get an answer on the viewing question. I think there was a disclosure in January, 250 million hours of movie and TV in a single day in January, and the last prior disclosure to that was 125 million, which seemed to be like a run rate. Just wondering if that 250 million was an outlier or if that is more of a run rate currently.
It's really not the total aggregate viewing as opposed to the median viewing by country is not something internally that's in our metrics stack. We don't even track it that closely. It's not that relevant. What we do track on a country-by-country basis is how median viewing at different lifetime slices is, and we continue to see good things in that, continue to see that grow as we add more content.
Scott, I'd add, just like Reed, these were milestones. They were convenient sort of PR milestones in terms of announcing it. Some of that growth is by launching new territories. Now, we're more focused on growing each individual user within that territory than we are in terms of the big aggregate numbers Reed said.
If we can help you out, I remember that YouTube announced they were 1 billion a day and we went and looked it up and we're a little over 1 billion a week, we've got a long way to go to catch up to YouTube.
Thanks. Downloading is also a fairly new phenomenon within Netflix. Speak a little bit more about that, how it's being adopted within accounts. Also any changes from a technology architecture standpoint that have needed to be done to produce that?
It's pretty small impact. You're not on airplanes or cars that much of your life, it's really nice to have when you use it. At least in Western and more well-off markets where networks are strong and relatively inexpensive, it's a modest feature. I think in Asia it's a little bigger because the networks, you're off of an inexpensive network a lot of the time. Again, as networks get more modern, I think we'll see that downloading, the need for it, will go down and down because basically you want to be able to just click and watch. You don't want to have to think in advance, outside of a couple of narrow scenarios like an airplane.
Has the re-encoding that was discussed at Mobile World Congress, is that now complete?
No. There is no complete when you get to encoding. You just keep getting better and better and better. We're continuing on all of that work so that you can get an incredible picture quality on a very modest data plan on a phone.
Thank you.
I'm going to switch to competition and Amazon specifically. Amazon's gone after a David O. Russell drama series with Robert De Niro producing the next series from Matthew Weiner. These are sort of big tickets, big prices, very talented producers and actors and directors. Reed, when you look at the competitive landscape, anything at all that makes you nervous or that you feel like you have to accommodate? Ted, the fight for talent in Hollywood, any issues with Amazon ramping its originals? David, on the cost side, could this influence the cost of originals higher than you'd like?
At one level, Amazon's an amazing company and doing so many different things. It's really incredible. You think of Jeff Bezos, in addition to all of Amazon, doing The Washington Post and Blue Origin rockets. I will say we do think about all of that and their tremendous track record. On the other hand, they're doing great programming, and they'll continue to do that, but I'm not sure it will really affect us very much because the market is just so vast. Think about it when you watch a show from Netflix and you get addicted to it. You stay up late at night. You really were competing with sleep on the margin. It's a very large pool of time.
A way to see that numerically is that we're a competitor to HBO's, and yet over 10 years, we've grown to $50 million, and they've continued modestly growing. They haven't shrunk. If you think about it as we're not really affecting them, the answer is, well, why? That's because we're like two drops of water in the ocean of both time and spending for people. Amazon can do great work, and it would be very hard for it to directly affect us. It's just home entertainment is not a zero-sum game. Again, HBO's success, despite our tremendous success, is a good way to illustrate that.
I would just add there, 500 cable channels, nearly every one of them have original programming being produced every day. It's great that it's an incredible opportunity for producers to have multiple buyers for their programming and a great opportunity for consumers to have a lot more opportunity to find new shows that they're going to love.
To Ted's point, there's more than just Amazon competing for those shows. Even if the show were lower in cost, we would have more content. We wouldn't make the decision, I don't think, to reduce the content level. We're already growing operating margin. We were able to grow U.S. margin over the last four or five years, and now we're switching to growing global operating margin. We're already delivering that and also growing the content.
I think, sure, I'd love to have shows less expensive, honestly, we're more competing with the quality of the show and trying to push and improve the cinematic quality of that show, which has more of an influence on the cost of that than the individual competition within the market.
Absolutely. Ted, to follow up with your aspect of this, how is your relationship with Hollywood versus a year ago? How would you describe it? Does this dynamic come into play where at some point there'll be a backlash from Hollywood? We always talk about the media companies ultimately looking at Netflix as a competitor, competing online video platform versus them supplying you with content and making a lot of money off of it. Have you seen a change in that dynamic at all with any of the studios?
This is probably the most dynamic time of change in the history of the television industry, and how everybody navigates it feels really important, obviously. On top of being a competitor for projects and a competitor for attention, we're an enormous customer of all the studios who license us their content, sell us their content, who produce original content for us. I think the constant evolution of the relationship is finding the balance between being a great supplier and a competitor. The networks and the studios have navigated those waters since the beginning of television.
They have. Hollywood goes through fits and starts and cycles, and right now we've got writers agitating for more money. The talent's getting a greater share. You've got a lot of cable networks that aren't licensing syndicated content like they used to. There's definitely a lot of change taking place and a lot of folks in Hollywood trying to figure out how exactly to wrestle with you. I guess, to your point, as you said, things are fine right now.
Yeah. We're 10 years in. Those fits and starts have started on day one and continue today.
Well, Ted, I think you would also say that one of the fundamental changes
Right
is the globalization of TV. I think that is playing through Hollywood. I think it's playing through each one of the talent sections of Hollywood in terms of trying to understand what the value of content that's now applicable to double the audience globally, say.
Correct. Who do you compete with today when in the U.S. we've had incredible success with our Spanish language original, "Ingobernable ," but also with our Portuguese language original from Brazil, "3%". The pool of people who are competing for the attention of viewers, and ultimately the attention of buyers, has never been bigger.
Great. Thanks.
Speaking of studios, it seems like your initiatives with Netflix Studios-produced original content seem to be quite unique relative to others. There was some recent media attention, and Ted, I think you were quoted as suggesting spending several billion dollars in terms of allowing talent to be home when they actually create content. Could you speak a little bit more about that, how you think that differentiates yourselves relative to competitors?
Yeah, look, think about it as an extension of our talent-friendly commitments, but also in terms of our commitment to quality. What we have found in our own business is that if we create a great working environment for an employee, they do the best work of their life. I think in the case of production, a lot of that comes off in the performance, which comes off in the screen. So we want to invest in our talent the way we invest in our talent inside of Netflix and create the best shows on television. One way of doing that is not having people travel all around to chase a tax credit. In that article that I had referred to this, it was suggesting that perhaps the state of California could be more effective in investing in infrastructure versus incenting individual productions.
If you give people a great place to work, they're going to come work in your state.
There's also, I believe, some job postings, at least Netflix Studios and the cloud, and it's been discussed also in terms of differentiating and infusing technology into the studio to create content in different ways. Can you expand on that a bit?
It goes along the same lines, which is giving people tools, right? Giving people the best tools to work with. When you're producing for Netflix, the Netflix Studio, you have the most state-of-the-art tools at your disposal to create content and not get stuck in old technology. We're trying to innovate on things that matter to consumers, but also things that matter to creators.
I don't know that this is connected to Studio or not, but does the current infrastructure that you have in place, does it allow you to do live and near live productions?
We'd have to invest in technology to do it. There's nothing that would prevent it from happening. Our desire is to continue to double down on our consumer proposition of on-demand. I think it is that kind of freedom that the consumer receives from Netflix of watching what they want whenever they want. It is part of the value proposition, and live is back to the old paradigm of appointment television.
Thank you.
Can we shift to sort of on that Amazon topic and the international topic combined? I guess, Ted, for you, Amazon building out local content pretty aggressively, particularly India, Japan. India, there's talk of them starting up a studio. You've, I think for the last couple of years, really espoused this Hollywood strategy of Hollywood content is global in nature, and that can drive subscriptions globally. You're also building out a studio here in the United States to pursue that more aggressively. Does it make sense for you to more aggressively build out local studios overseas, and what capacity does the company have to even do that at this point?
Well, we're definitely already building our production capabilities outside of the United States today. We're today filming local shows in 13 different countries, including India, including Japan. We are doing it simultaneously. We think it's going to be the combination of the big global interest original programming complemented with a growing number of local language original series in each country. We're operating all over the world, we're producing all over the world, because that's where our customers are.
Ted, maybe you can just talk a little as an example in those of "Terrace House," of "Death Note," of "Sacred Games" to illustrate that.
Well, the various versions of it obviously would be something like producing something that would be more on the quality level that you're used to seeing from Hollywood in India, a new series that we're producing coming up called "Sacred Games." In Japan, we have a show called "Terrace House." It's incredibly popular, more in the unscripted mode, and it's more consistent with the things you see every day on television in Japan. A movie, "Death Note" that we're producing today, is an epic piece of Japanese manga and anime that we're remaking and reimagining that storyline for the world with more of a Western spin. The different takes on content from around the world opens up the world to a world of storytellers, and that's what's really exciting about doing it.
Doug, I think it's worth noting too that from our perspective, this isn't a change. What you're seeing is the fulfillment of pipeline that's been building for two and a half years, and the fact that we're operating in more territories. I think, Ted, you would say this has been in plans and works for a while. This isn't really a change from-
Absolutely.
what we've been talking about in the past.
Yeah, we're deep in production in Spain, Italy, Germany for shows that will launch this year. We're going to continue to grow in that. Ingobernable was our second major series from Mexico. We'll have four from Brazil. We're continuing to grow it out and grow up that capability domestically, internationally.
Do you think 20% local, 80% sort of Hollywood U.S. content is the ratio that still looks good to you today, or do you think that 20%'s rising as the international markets-
I'd say that's the right picture globally, Doug. Not to say that certain countries won't be some variant of that, but I'm not seeing a reversal of it in any territory.
The second topic I want to discuss was mobile, and I think Neil Hunt, before he retired, talked about that since you've launched the rest of world mobile usage of Netflix has really soared, and that there's a lot that you're thinking about in terms of customizing content for mobile or even operationally. Any more details on mobile that any of the three of you are willing to share?
Well, first, Neil's still with us for the next couple of months.
That's right.
Second is, they're very experimental, just trying to figure out aspect ratios. If you think of, there were movies originally that were very widescreen when they showed on televisions that were 4:3, a technology developed pan and scan to be able to make that picture look a little better on a 4:3 screen. We're just experimenting with variations of that, of trying to figure out how to zoom in to be able to basically have faces be larger. It's super experimental. It's a neat idea about how to adapt to the future.
What we do know too is that the next 100 million subscribers are going to be far more likely to be watching content on mobile than the first 100 million. Whether or not they want to watch anything differently, we're going to find out.
Let's get one question more from each of you guys.
Why don't I take the next one? Because Scott and I agree that he would get the last. I'll say for fun, Reed, how much longer to get the next 100 million subscribers if it took 10 years to get the first 100?
Well, it took more than 10, depending on how you count the streaming. Shorter than the first 10, for sure.
Scott?
Reed, for you, if you were to liken your current global dominance in global streaming to any army in the history of the globe, what would that be today?
You know, I got an invitation to go visit Albania. You may see some summer photographs from me with members of the Albanian army. Remember that's all in fun and that Jeff Bewkes has been a great partner for us. We do kid him, and he deserves it. He really has been a great partner, and we think they will continue to be under AT&T for that matter. Again, that comes back to the non-zero sum nature of entertainment. The more we can all do great content, the better many different providers, including HBO, including Netflix, will prosper. It's up to us just to figure out how to provide the best entertainment possible. Thank you, everyone.
Thanks.
Thank you.
Thank you.