Good afternoon, welcome to the Netflix Q2 2018 earnings interview. I'm Spencer Wang, VP of IR and Corporate Development. Joining me today are CEO Reed Hastings, CFO David Wells, Chief Content Officer Ted Sarandos, and Chief Product Officer Greg Peters. Our interviewer this quarter is Todd Juenger from Bernstein. As a reminder, we will be making forward-looking statements, and actual results may vary. With that, over to you, Todd, for your first question.
All right. Thanks, Spencer. Let's start with the obvious. For the first time in, I think, five quarters, net additions came in below your own forecast, both in the U.S. and internationally. Whoever wants to, maybe you could help us walk through where was the source of that shortfall and what do you attribute it to?
David, do you want to hit that?
Yeah, sure, Todd. In general, I would say acquisition, which is up year-on-year, but wasn't up as much as we thought it was going to be. It was pretty broad across multiple markets. It wasn't any one area of the world. As you pointed out, after four consecutive quarters of under forecasting the business, we over forecasted the business. We strive for accuracy. We clearly didn't pad the number. We think based on the rolling 12 months of growth that we've had compared to the prior rolling 12 months of growth, the U.S. up slightly, internationally up significantly, that the background and underlying characteristics of the business haven't changed. Our total addressable market is intact and hasn't really changed based on those 90 days of actuals.
In general, we think that the conversion and growth to internet-enabled entertainment is intact. People are loving it. People are adopting Netflix around the world increasingly more in our newer markets as well. I think we're still on track for a strong growth year this year, and maybe it's going to come in a little bit differently than we expected and others expected.
All right.
Todd, you notice probably that paid net adds are up compared to a year ago and forecast to be up a year-over-year basis in Q3. The fundamentals have never been stronger. Our viewing is setting year-over-year records, the shows that we have coming. We're feeling very strong about the business.
Terrific. I'll stay on this for just a couple more follow-ups, and then we'll move on to broader things. I just wonder, over the course of the winter, there were some well-publicized, essentially global pricing increases. I wonder if you think that had any impact on either retention or gross adds relative to your forecast.
We don't think so, Todd. If anything, all of 2017, we sort of had rolling increases in various different parts of the world. We were able to grow continually through that, and we continue to. I don't think that is contributing to this trend.
Todd, we've seen this movie of Q2 shortfall before, about two years ago in 2016. We never did find the explanation of that other than there's some lumpiness in the business and continued to perform after that.
Great. Let me hit on Q3 really fast or else I wouldn't be doing my job. You are kind enough always to give us a forecast for that, it just stood out to me that, I think it's slightly below net adds from a year ago. I only had a quick chance to I don't know if that's on paid or total or both.
It's on total, Todd. As Reed pointed out, paid net adds are actually up year-on-year. Again, we try not to focus too narrowly on a couple 100,000, or on any one particular quarter. If you kind of look at Q2 and Q3, it's essentially kind of flat with last year. Last year we had about 5 million global net adds in Q1, 5 million in Q2, 5 million in Q3, and then 8 million in Q4. Years prior, we've always had very strong growth in sort of Q1 and Q4 relative to Q2, Q3, and we think that pattern is going to happen again this year. Again, we tend to focus on 12-month rolling over 12-month rolling, not on any particular quarter because as Reed points out, we've seen this movie before.
We've been through these cycles of growth. We think the sort of background fact of people adopting internet entertainment, including increasingly more international adoption, is going to drive really strong year-on-year growth in international with U.S. hanging out in that $4 million-$5 million net additions band that it has been for the last four or five years.
All right. One final sort of segue on to bigger things. Has the results or any learnings from this quarter caused you guys to change at all your internal forecasts longer term for either sub growth or revenue growth or free cash flow?
No. As Reed indicated, David, I'll take it again. Others can chime in. The business fundamentals, the on track for 10% operating margin, we indicated we do have support exchange headwinds that kind of push us towards the bottom end of that range. Everything else is sort of tracking according to our target and plan. Again, we feel pretty good about it. Obviously, when you have sort of a million net adds, we are going to manage within the band of marketing spend and other things to protect that operating margin growth in the short term. Long term, nothing's really changed.
All right. Don't worry, Greg and Ted, I've got plenty for you. Moving to the other elephant that was already in the room, just check in a bit on the competitive landscape. Obviously, a lot going on between Disney and Comcast and Fox and Sky. Need to check in and hear what you're thinking in terms of what impact on Netflix, however that result turns out. Is any particular result better or worse for your own competitive fortunes?
There's a lot of new and strengthening competition with Disney entering the market, HBO getting additional funding, the different French broadcasters coming together. That's all normal and expected. It is what it is. We're not going to be able to change it. Our focus is on doing the best content we've ever done, having the best user interface, the best recommendations, the best marketing, all the things that we've been doing for many years in the past and will keep doing for many years in the future.
The other thing I would add to that, Todd, is the market for entertainment is so big that there can be multiple firms that are successful. You've heard us talk in the past about how we've been able to grow dramatically in the U.S., and HBO and other networks have also similarly been able to grow at the same time. It's a very large market.
Our programming, we've always been focused on keeping people entertained and satisfied on an absolute basis, not relative to any competitor. Really by keeping an eye on our members and our consumers, we're better served than hyper-focusing on competition.
One of the most frequent investor questions related to this topic is access to licensed content, particularly from Disney and Fox. Let me start with a very specific one. There is a wide variance in degree of opinion on how much content on Netflix comes from off-network licensing of Disney and Fox content. Care to narrow that down for investors any, and give us some sense of just both from an availability perspective and maybe from a viewership perspective, how much is there?
No, I don't want to narrow it down any more than it is, but I would tell you that it has been a number that's been on the decline for several years. You should think about it, the way we've looked at this long term is that our competitors will want that content on their own services. That was a bet we made a long time ago when we got into original programming, and every year since then, we've been doing less and less off-net business with Disney and Fox, and our bet is that long term, they'll want all their content on their service. In the short to medium term, we're still licensing content off-net from them, and they're also producing original content for us, like "Ratched" from Fox or the Marvel series from Disney.
Right. I know you've answered this question, Ted, I think the last two or three quarters consecutively, but I got to ask it again. Any reason to expect those types of original shows that you get from Disney and Fox to change given the new information from what they're doing?
No, those shows are for us to cancel. We're super happy with the performance of them so far. The "Ratched" and some other Fox original titles are still upcoming.
Speaking of your own originals, I want to touch on a couple of relatively newer areas of focus for you and just check in to see how's it going. One is unscripted. You talked about this last quarter, it's been a recent elevated higher priority for you guys. How's that going? What's your experience been? Is it being enjoyed by your members as much as you thought?
Yeah. We're super excited about the variety of the shows and how they're landing with consumers. Similarly, we thought a long time ago that the unscripted networks are also going to want to keep their own content for their own services. We started investing in our own unscripted programming and have had some really great out-of-the-box hits with "Nailed It!" and "Fastest Car" and "Queer Eye" that are doing great with our watchers relative to building an audience. You saw "Queer Eye" did quite well at the Emmys in the nominations announced last week. We're really excited with the progress and the speed to market we've been able to do our unscripted shows at really high quality.
On the original movie side, another not quite so new area of focus, but still more recent. What's your assessment of your progress versus where you'd hope to be on that front?
We're moving as quick as we can and still delivering movies that people want to watch. You saw in the letter, we talked a little bit about the results of our romantic comedy, "Kissing Booth." There was much made in the press this summer about our romantic comedies have all been pretty successful, Set It Up just after "Kissing Booth." These are movies that are not really being made in the market much, and we're moving into those. We're also doing a lot of the big event films with A-list directors, and these are long lead production times, and we're really excited with the way they've been delivering in terms of viewership, and we think that we'll see similar trends that we saw in television, but it'll take another year or so as we get into it.
One final one I wanted to check in on, which will allow us to move forward here, was what I'll call non-English language, for lack of a better word. It seems like you're making more stuff in other places of the world. It seems like that's having success all around the globe. I just wonder if you could confirm that and talk about your own assessment of the returns you're getting on those sorts of program investments.
Yeah. Similarly, fast ramp-up and early success. We've been producing shows that are incredibly relevant in their home territories, and the nice windfall is they get viewed all over the world. We saw that recently with "Reign" and "Dark." Certainly in India, we saw great success recently with "Sacred Games" that really excite the market. These are places where our global originals play well, too. It's really, I think, accelerating the brand perception of Netflix as not just an out-of-towner, but someone who's producing content that you care about in every part of the world. Upcoming this year, we have new seasons of "Chicas del Cable" from Spain and "Club de Cuervos" from Mexico. We have a new show from Spain called "Elite" coming out in Q3, "Ghoul" in India coming out in August.
These are shows that are produced at a level that are really high, that consumers get really excited about, and it helps them get really excited about Netflix if they're not quite sure who we are yet.
Now that we've moved on outside of U.S. or the English Western world, could I check in just a little bit, just specifically on Asia, and carve out India for a second, because I'm going to come to India specifically later. Just to Asia as a huge reason, generally, I think we've talked in the past how the content tastes there are a little different. The business model, you were hoping to find the exact right formula. How is your growth going in Asia? Generally, what is driving it? Is it at a similar pace, at the same stage to other markets in the world? Any deeper info you can give us on that part of the world? Anybody.
Reed, why don't you take it?
Sure. I'd say, Todd, we're starting to turn the corner in many of the nations where our viewing is climbing up as we're continuing to improve the programming. When we get high viewing in every other market, that has brought in an era of fast growth. We've seen that. It's very country by country. I'll include India in the description and say we're really pleased with the progress and tracking we're making since we launched two and a half years ago, and we just have a lot of work and a lot of opportunity ahead.
Todd, the only annotation I would say is, look, it's still early. We launched with a very sort of a [stem] model approach, and we've augmented that, right? We're adding payment methods. We're adding more content. We are working on all the playbook that has been successful for us in other markets in the world, and you see that through increased investment. That sort of last wave of expansion for Netflix is still relatively early, and that's affecting our growth numbers. It's affecting our levels of investment as well, where other markets are sort of growing in profit. That actually those markets collectively are growing in loss. We have more growth in the profitable markets than we do in the loss markets, and that's what's growing the overall margin.
Yeah. We've been really thrilled with our original production of anime that's being viewed quite pan-regionally throughout Asia and of course, in Japan. Our scripted series and our unscripted series, like "Busted!" from Korea or "Terrace House" from Japan, are viewed throughout the region, and are building brands bigger and bigger. Thank you for sort of carving out India separately, only because for a number of reasons, right? It's such a place with huge potential. I think numerous executives have been quoted into various places recently talking about the potential there. You've got some new original shows there. Specifically in India, if you could dive a little deeper into where you are on the growth curve there, how you see the path to success, and how big that could be for you in the next many years.
Well, Todd, we're way behind YouTube, Hotstar. Those are really the leaders on the Internet. There's so much TV viewing that linear TV that could be Internet viewing. The advantages are tremendous in India for Internet viewing because you don't get the ad load that you see that's so high in all of the other platforms. Netflix is having great success getting established, getting a reputation going. With this triplet of "Lust Stories," "Sacred Games," and "Ghoul," we're really getting some nice momentum in our India growth. Now, we're still, as David said, a niche product. We've got a long way to go to expand languages and many other aspects to be able to cover, be a broad Indian product. In terms of our beachhead, I'm very pleased with what we've been doing.
Greg, there seems like there's some maybe seemingly obvious particulars about the Indian market from a product perspective that might be peculiar. How much of that is just from the infrastructure that exists and the affordability in the marketplace? Is that true, and if so, what have you got up your sleeve to try and make Netflix easy for everybody in India to enjoy?
There are definitely a few specific things that we're doing there that get to payments and how signup has to happen. We just rolled out some improvements on the signup flow on TVs, so make that easier for non-members to become members in that dimension. Actually, a lot of the work that we do that helps our members in India is actually applicable in some sense globally as well, whether that's more efficient encodes to make the viewing process higher quality, start faster. That obviously is great for our members in India, but it's great for members around the world. Downloads is another great example where we rolled out downloads for when you don't have great connectivity or you don't want to use the data in your data cap.
Now we've just actually rolled out the next iteration of that Smart Downloads so we can make that process even more fun and easy by having episodes that you watched automatically delete and get replaced by new episodes whenever you come back on a Wi-Fi network. It's a mix of both India-specific and just globally relevant.
Yeah. In there you talked about payments and just that whole stream. It's a question that comes up a lot with me, with investors, is just the thought about the affordability of the product relative to relative incomes. That comes up a lot in India. I'm going to broaden the question to just various places in the emerging world. How much room do you guys feel you have there in India and other places? Do you sense you're reaching a limit in any sense in terms of the utility of the product compared to alternatives and customers' ability to pay that would affect retail ARPUs anytime over the near horizon?
I would say we're far from reaching a limit in terms of the addressable market, given the pricing structures we have right now. We got a lot of room to grow in a reasonably affluent part of the society in India and other markets around the world. Much more runway. Having said that, we're constantly testing our pricing models, what pricing strategies work best for our members around the world and trying to find what features, what tiers we can add to make that both a revenue positive but also a consumer-friendly and consumer fair kind of approach.
Todd, just to build off that a little bit. We're talking about India a little bit as homogenous, but breaking this apart, Reed has mentioned it, Greg Peters mentioned it. We may have an issue where there's three or four different sort of growth patterns within India in terms of different demographics, different segmented groups as we address 1 segment and then we start addressing another and so forth. Each one has a specific set of challenges with it, and we're in the early days of that first segment. Expect more from us in terms of getting into segments 2, 3, and 4.
I do think that the price point is mostly relevant to the value proposition. Are Indian consumers finding a lot to watch on Netflix and having a great time doing it? If they are, that price point becomes more of a value proposition than a premium proposition.
Yeah, just picking up on that. One statistic that you guys sometimes mention and sometimes don't, I don't think I saw it in the press release, was the notion of engagement as one good perhaps indicator of value received by your members. Any comments on where engagement, I guess, defined as hours streamed, hours streamed per member, sort of stood this quarter? Is it still growing in line with content growth?
It is indeed still growing, Todd. On a year-over-year basis, our viewing hours, we mostly measure it by median view hours, is growing. We're super excited about that. We're still a small fraction of every society's overall viewing. I think there's still room to go there.
Got it. One more on pricing, just because I know you're always testing, we all know that, one of your tests got picked up in the press. We actually stumbled across it. This idea of an ultra plan seems to be a test for HDR viewing that you're experimenting with. Just any thoughts you want to share on the theory behind that and the marketplace acceptance you think might exist for that type of a plan?
Well, I'd say more generally rather than speaking specifically to any results, because that's still very much in progress. We want to test at both ends of the spectrum here and try and figure out ways to add more value for those members who might see that as being good value while we're testing and some more accessibility, how we create a way to access Netflix for a broader group of people. A test that's still in progress and no results to discuss at this point.
Fair enough. Another way that you've been going to market increasingly, it seems, is with these partner deals. Maybe there's a better internal word for them. They were mentioned again in the press in the shareholder letter. Would love to check in on a couple things on that. First of all, is anybody willing to tell us roughly how important these are to your net add growth, to your overall subscriber base? Any sense of proportionality there other than what you said in the letter, which is basically a supplemental channel, but the majority are still direct.
I think I'd reiterate that the vast majority of our acquisition still comes by a consumer signing up directly with us. We're fairly new when it comes to these partner bundles. We're excited and optimistic about it. I think that that will grow as a percentage of our acquisition. What we're really excited about is it actually allows us to sort of more efficiently address different consumer segments. Take the U.S., for example, a market we've been relatively well penetrated in. By doing a deal like with Comcast, it allows us to put the application on the set-top box where consumers that might be less early adopters, sort of more late adopters, are already watching traditional television. By being included in a bundle, we get to remove a separate purchase decision. We get to eliminate the sign-up flow.
It just makes it super simple and easy for consumers to sign up via that mechanism.
Todd, just to be consistent with what we've said in prior quarters, it is a growing element of our acquisition. As Greg said, as we penetrate into demographics and established markets that may not be on the early part of that S-curve of adoption, and also our newer emerging markets where partnerships may allow us to do things like partner billing and tap into consumer trust, that's a little bit earlier in the cycle than if we establish that ourselves.
Is there any feedback you're in a position to share from the partners themselves in terms of how these programs are working for them? Not to single out. T-Mobile comes to mind just because they've been at it in the States the longest. Any place in the world, could you characterize their feedback to you?
Yeah, I think it's something that's very important to us because obviously we want a sustainable model around this where it's valuable to the partners, perceived as valuable by them and supporting their business so that they want to continue to invest in it and expand it. In market by market, it's different, but it's either a differentiation strategy where our partner is seeking to position themselves slightly differently. Oftentimes, it's just actually a way of them communicating to the consumer the value that they're investing in their network or the quality of service and like that, and having Netflix and the amazing content that we have
Having a really high-quality experience with that is a great way of just telling that story to their customers and their customers to be.
It creates a great narrative that they're a good video source, because when you're talking about Netflix, it becomes the symbol of a great data system, right?
Especially when you think about, we try and be super innovative on the video quality and audio quality and all those things that you unlock by having a great network and a great service.
Todd, we've been doing partnerships with other partners for many, many years. We've had many multi-year relationships with many of our different partners. As Greg said, we want these to be sustainable. Because we've had these for many years, I think you can extrapolate from that they're successful for both parties.
Todd, it's not a radical thing. MVPDs bundling another network. That's pretty well-trod territory on their side.
One of the things that these partnerships give to you is also some more sort of marketing investment, which is done on your behalf by them. Coming into the year, one of the themes that I interpreted from you guys was a little bit relative increase in the emphasis of your own marketing investment behind your content and your service. Just checking in, how's that going? Are you seeing the returns that you hoped for? Any specifics there? Can you maybe help give us some examples of specific types of marketing programs and how you measure the investment of that? Where are you spending these incremental dollars?
A couple of-
You go ahead.
We're very pleased with the growth and our ability to invest. A lot of it is behind title brands and seeing how do we help title brands really maximize their potential within the overall system. We're doing lots of tests, trying different methods in different countries, learning what's the most efficient ways to build demand for a title. There's tremendous amounts of learning going on there. We're also doing acquisition marketing and learning on that side. David, did you want to add to that?
No, I think that's great. Just to remind, Todd, that it's been a while. We've been out of the sort of, we spend this much on marketing, we grow this much directly in a quarter. Only a fraction of our spend is oriented around direct acquisition. What Reed is saying is the majority of the marketing spend, call it 80%, 85%, is oriented around building title brands. We've got good evidence that we can do that. We're just parsing through what the most efficient mechanism is to market those titles and also, where the right amount of spend is as well as we grow our content library.
What we see a lot is that the channels themselves vary around the content itself too. Learning more about how to get more and more refined about which channels for which content get the best results is the things that we're learning right now.
Were you pleased with the Emmy nomination campaigns?
I was thrilled. I was thrilled we took the record, obviously, for the most. The thing I was most proud of is we had 40 different shows nominated. To kind of give you an idea of the kind of different variety of things that we're doing, scripted, unscripted, comedy, drama, talk shows, everything across the board. Everyone was represented. Those 40 shows were the very happy people last week. Millions of fans around the world too.
Well, here comes the world's most inelegant segue, but being respectful to your shareholders, the single most popular question I got in prep for this, so I'm going to share it with you out of duty to that. I'm sorry, was revolving net neutrality. I guess we have a new administration, relatively, or not that new, but between that and some of the.
Around the world.
Where do we stand on that?
Net neutrality has won as a consumer expectation. Some countries have net neutrality laws, other countries don't. Broadly around the world, consumers have the expectation, and ISPs are delivering it. I would say the net neutrality advocates have won the day in terms of those expectations. We don't see any changes of that in the U.S. or other countries. It's quite a positive outcome for changing cultural expectations in a positive way.
Okay, flipping back inelegantly to my more core line of questioning. Speaking of big investments, Ted, I didn't give you a chance yet. You've got some big new partners in terms of your producers on overall deals. It caught the attention of investors, obviously. Your Ryan Murphys and your Shonda Rhimes and your Jenji Kohan, not to leave out anybody.
Jason Sudeikis recently.
Can you help us think through, are there more of those to come? That's one question. More deals like that, more people like that. Sort of secondly, and related, what's the timeline? Has development started from any of these resources, and how long before we see the output of their work on starts to show up on Netflix?
Well, it's a great question. You should think about it's a pretty rare creator who has an ownable sensibility, who produces a lot of content, prolific and successful. People like Shonda and Ryan and Jenji and Jason, they have a brand, and they care about the brand, and they want to create in that brand, and they want to create a lot. We could give them an infrastructure to do that at Netflix because we have a great history of finding, connecting an audience for all those different shows. That's not true of all creators, but it has been with the shows that we're doing so far, and we will probably do more. It is a pretty rare breed of creator. Then we just physically moved Shonda into her new home here at Netflix, and we're thrilled.
She has a couple of shows percolating now that we can't announce yet, but we're really thrilled with the direction she's going. Ryan's finishing up his work at Fox, then he'll be full steam ahead. Remember, his last two shows at Fox are going to be our first two shows, actually, with "The Politician" and "Nurse Ratched." We're in the Ryan Murphy business in a big way. Then Jenji, going from "Weeds" to "Orange Is the New Black" to "GLOW" was exactly what I'm talking about being prolific and successful. We're really thrilled.
All right. Moving, David, to your very specific world in a popular question I received. You answer this every quarter, just regarding your continued use of debt to finance your current free cash flow deficits, especially in an era of rising rate or current environment of rising rates. Just need to check in and make sure we understand your logic and your continued ability or plan to finance the company and the future deficits for the next few years that way.
Yeah. We continue to see debt as the most optimal choice, the most cost-effective use of capital or, sorry, source of capital for the company. Obviously, we'd love to get to that point where we're organically in self-funding content, and we do see a point where we can get there, but until we do, we see debt as the right choice in terms of cost of capital.
Another popular question, I'm getting through as many as I can before Spencer tells me time is up. Here was another one, and probably for either Ted or Reed. You guys get this a lot. Investors still want to know your desire or appetite for sports type of content rights, for news-oriented type of content rights, or for other expansions of your platform to either get into audio or gaming or selling other people's products. Any of those sorts of new genres or potential expansion theories, where are you on those?
No change in our long-term views that have been, as you've referred to, expressed over and over. We have such an opportunity in movies and TV shows of many types around the world, that it's consuming every bit of energy and excitement that we have.
Got it. Let me, if I can, move to what I think might be sort of the seminal question, two questions for long-term Netflix shareholders, which is really, okay, you got about 130 million global members now. How long is it gonna take you to get the next 130 million? If you double your members, are you gonna need to double your spend in content and marketing to attract and retain them?
It's kind of hypothetical to think about the P&L structure. We'll learn as we go. We've been very attentive to all the key factors, which is we want to invest enough on content to make our subscribers incredibly happy because that's how we grow. It's a really smart investment for us on the content side. We want to invest in product and marketing to make the whole service better, to make the shows be more aware. We also want to steadily increase operating margin over the next several years. As an example, we've got some adjustments to make because of foreign exchange rates. We'll make those adjustments, and we'll grow into that. Think of us as continuing every year to figure out how we make certain adjustments to keep the operating margins growing, the subscriber base and revenue growing.
That's been the basic way we've been operating over the last several years. It's more of the same. In terms of the dartboard, as several years out on when we double, the answer is not soon enough. We're always pushing hard to figure out how can we get even more growth. We're awfully pleased with what we've got too.
Todd, I think we have time for one more question.
All right. I guess I'll use that to sort of just expound on the big dartboard I just asked and maybe start with Greg and then anyone else who wants to comment. When you think about the product itself, which is the underpinning of the belief you have in the growth, what's on your short-term and long-term list of things that you think your members most desire would move the needle most from a product perspective, from a content perspective, from an overall pricing and value perspective, and therefore drives your agenda, I guess, each of you, over the rest of this year and into the coming decade?
It's a long list. We want to make really almost everything better about the product, but I'll just sort of highlight one that's fun and happening right now. We talked about sort of improvements in the mobile UI and Smart Downloads, but I don't want to leave out TV. With all of this amazing content that we have bringing out, we've been working really hard over the last several months and quarters even, testing and researching how do we make that TV experience faster, more fun, easier to find the stories that our members will love. We're actually going to roll some improvements out to that experience and make that better starting tomorrow. Starting this week, you'll see those, and that's what we expect to be a long line of incremental improvements that make that experience even greater for finding the stories that you love.
I'd say in the short term, I've got the great pleasure of trying to make people very happy. In the short term, we've got new seasons coming up the second half of this year of "Orange Is the New Black," "Ozark," "Iron Fist," "Daredevil," "Narcos," the finale of "House of Cards," the follow-up series for "Making a Murderer." We have some brand new IP coming up with new shows like "Insatiable," "Maniac" with Emma Stone and Jonah Hill, "Disenchantment" from Matt Groening, the creator of "The Simpsons," doing an animated comedy for us. A new show from Greg Berlanti's company, "The Chilling Adventures of Sabrina," spin-off of "Riverdale," that's been hugely popular for us. That all ramps up to bigger and better feature films too, for our fans around the world.
Starting with "The Christmas Chronicles" from Chris Columbus later this year and "Bird Box" from Sandra Bullock, with the great Susanne Bier directing. That will lead us into next year where you'll have movies from Martin Scorsese and Alfonso Cuarón and all these fantastic directors, the opportunities are just limitless.
For me, I'll let Reed have the honor of going wrapping us up, I would say we've got 130 million members and the prospect of adding whatever that is, 100 million more, the next 130 million. All of those folks enjoy connectedness. As we grow to enjoy more stories that are sourced from wherever in the world, I think the ability for all those folks or a great portion of those folks to enjoy and see a story and discuss that story in the same moment is great. Netflix being an enabler of that will continue to do that, I look forward to the 8 billion of content growing from here. We think we can grow operating margin, we're also going to grow content spend, which will enable more of that content.
Todd, for me, it's about connecting the world and sharing the stories all around the world. I think we've got so much more we can do with that as we learn the various arts of dubbing and style, I think that will make a really profound contribution to the world, in addition to just entertaining everyone, which is very joyful to work on. With that, let me thank everyone for participating in the call, look forward to spending time with you guys, investors, over the quarter. Thank you very much.