Netflix’s Content Chief Just Perfectly Summarized How the TV Industry’s Been Broken Since Birth

70 years of viewing 'at the mercy of others'

Netflix execs had a lot to say at the streaming giant's CES keynote today, but amid all the flashy trailers and big global news, one compelling tidbit was largely overlooked.

CEO Reed Hastings was clearly the star of the show, where he announced Netflix's sudden surge into more than 130 new countries today. But also on stage was chief content officer Ted Sarandos, who talked not only about Netflix's popular programming but also about the company's role as a consumer advocate of sorts.

Here's how Sarandos beautifully summarized the profits-first, viewers-second mentality that has frequently driven decision making in Hollywood and across the entertainment and broadcast industries:

"Over the last 70 years, consumers have been at the mercy of others when it comes to television. The shows and movies they want to watch are subject to business models that they do not understand and they do not care about. All they know is frustration.

"That's the insight Netflix is built on, whether it's an unfair late fee for a DVD, a discriminatory patchwork of global content availability or technologies that confound common sense and human happiness, our job as business people and as innovators is to make it easy for people to find the entertainment that they love."

While Netflix users often suffer (whether they know it or not) from content restrictions in their countries, the service has largely tried to sidestep the issue of Byzantine third-party licensing restrictions by creating its own original programming with unlimited geographic usage.

For example, the network's quick expansion into Cuba—where almost no U.S. content is licensed for viewing—last February was made possible thanks to Netflix's large stock of original shows and movies, which it could make available to Cuban viewers on Day 1.

Another positive aspect of Netflix's 24-hour-access model, according to Sarandos, is that it doesn't have to spend a small fortune promoting major shows in hopes that viewers will tune in at the right time:

"That means we can spend less on marketing and still generate higher viewership, even from smaller, quirkier, less traditionally commercial material that would traditionally have a tough time finding a meaningful audience. That means we can take more risk.

"To make a baseball analogy, linear TV only scores with home runs. We score with home runs, too, but we also score with singles and doubles and triples." 

Hastings described today as the birth of Netflix as "a global TV network," a term that's somewhat ironic when you think that to become global, the company has had to do away with almost everything that has defined TV since its inception.