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Why Netflix continues to not care about ratings

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Netflix's Ted Sarandos on expanding the company's programming plans

Ted Sarandos, chief content officer for Netflix, at the July 11 premiere of <em>Stranger Things</em> in Los Angeles.
Ted Sarandos, chief content officer for Netflix, at the July 11 premiere of Stranger Things in Los Angeles.
Jason LaVeris/FilmMagic/Getty Images

In an unsurprising turn of events, Ted Sarandos, Netflix's chief content officer, started his annual press event at the summer Television Critics Association (TCA) Press Tour by talking about how useless ratings are to the streaming service.

It's a contentious topic for Netflix executives, who have been asked time and time again by members of the media why they won't release viewership statistics. Sarandos pointed out an earlier report from Nielsen, the biggest ratings firm in the United States, which indicated that Orange is the New Black's fourth-season premiere garnered 6.7 million viewers during its debut weekend last month. While those numbers are great, Sarandos said they weren't official, and argued that another ratings company actually measured a higher figure.

"Ratings and reporting on ratings are an important part of the industry," Sarandos conceded. "But the focus of ratings has no importance to us."

Netflix, like a premium network such as HBO, is subscriber-based. Unlike traditional broadcast networks, Netflix doesn't have to worry about securing advertisers in order to continue creating original programming and hiring top talent.

"There are too many mediocre, safe shows on your television"

It's because of that reason, Sarandos said, that Netflix's goal isn't to worry about how many people are watching its shows. Instead, the company focuses on on how much conversation a series is generating, along with the critical reaction and the show's place in modern popular culture.

"You're seeing a global network being built in real time," Sarandos said. "We're much more interested in creating conversation surrounding our shows than anything else, and bringing that type of original programming to subscribers."

According to Sarandos, Netflix's business plan is wholly focused on two things: making more original content and striking bigger licensing deals with other studios. Subscribers, and the growth of its subscriber base, are the most important thing when it comes to business decisions at Netflix. Despite a lack of growth in the company's second quarter this year — something that Sarandos said had to do with launching the service in more territories than ever before — Netflix is looking into new ways to continue adding new members.

"If you subscribe to Netflix and you tell your friend, they'll subscribe to Netflix," Sarandos said. "If we don't make good programming, and you don't recommend it, people don't join or they leave."

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Sarandos said he knows that it will cost Netflix a pretty penny in order to make the best programming and attract the biggest names in the industry. Or, rather, a lot of pretty pennies. At the beginning of the year, Sarandos said Netflix was investing $6 billion in original programing for 2016 alone. When asked about that figure during his press conference, Sarandos said it wasn't enough.

"It'll go up," he said. "I don't have exact numbers, but it'll be more than $6 billion."

Sarandos used his time on stage to address some of the new series coming to Netflix next year that the company was spending that money on, including a new Jason Bateman/Laura Linney project called Ozark, and a gory-looking horror series. He also touched upon one of the biggest franchises Netflix has: Marvel. While Sarandos doesn't expect five seasons of Marvel programming in 2017, he said it's something the companies are trying to work toward.

"We've got Iron Fist and then The Defenders and then Punisher," Sarandos said. "Once those are in, we'll be doing second and third seasons of the other properties. But it's a lot of programming to get in 12 months."

For now, Sarandos said is happy focusing on trying to create as many original programs as he can, and not making the type of television that he feels is contributing to the feeling of so-called peak TV.

"There are too many mediocre, safe shows on your television," Sarandos said. "We're not looking to contribute to that."