Netflix’s Six-Point Crisis Playbook

Ted Sarandos
Photo: Michael Kovac/Getty Images
Matthew Belloni
May 30, 2022

In the weeks since the Great Netflix Correction, Ted Sarandos has taken it on the chin from the business media that fawned over Netflix for a decade. Still, it’s a bit surprising that he so quickly ran to Maureen Dowd for his more than 4,500 word quasi-mea culpa. Maybe it helped? I surveyed a bunch of savvy media experts and got wildly different responses. 

“Smart choice,” one veteran texted me. “Better for him to be on his front foot,” said another. “Was time to stop taking shit,” said yet another. “He covers a lot of territory here,” one said, meaning that when Ted is asked in the months ahead about Dave Chappelle or the advertising pivot or even the fate of lieutenants Scott Stuber and Bela Bajaria, he can now point to this piece, which sort of backs them (“I would say we are always reaching for the highest performance,” co-C.E.O. Reed Hastings says, “but our content is not why the current slowdown is happening”) while leaving room for personnel changes if needed.

But I keep thinking about the transparent strategy at play here, and the sentiment from other savvy observers was that this was all a bit much, and way too soon, especially during what should be a heads-down, focus-on-the-content moment for an embattled company. And the fact that Sarandos is even discussing in The New York Times whether he can pass his own ridiculous “Keeper Test” is already a loss. This piece, to me, is a fascinating window on the Netflix psyche: An overcompensation by innovative executives that are not used to bad press, care very deeply about their positioning among peers (and the elites that read the Times), and seem to be relying on a crisis P.R. handbook:

1. Place this with Dowd, a respected Pulitzer-winner at the Paper of Record, but an industry outsider, writing not for the news or business sections but for the humanizing Sunday Styles, who will ask good questions yet won’t quote Netflix’s more fiery critics or push Ted on the tougher issues.

2. Recruit five separate Netflix talents to say nice things. Jason Bateman, Guillermo Del Toro, Maggie Gyllenhaal, Jerry Seinfeld and Shonda Rhimes? Good lord.

3. Preach humility and contrition, but stay the course and do not apologize for the spending strategy or the company’s 70 percent market cap contraction. Instead, position Netflix as a victim of its own disruption and huge growth: “We could have been much more questioning of the success and saying, ‘Are you sure?’”

4. Make sure there’s the usual Barry Diller quote trashing legacy studios and elevating Netflix and Sarandos as the second coming: “If there is still a Hollywood, he is it.” 

5. Double-down on defending the anti-trans jokes from Dave Chappelle and now Ricky Gervais, weaving it into a larger message about your commitment to free speech and progressive politics amid the narrative that Netflix is now “anti-woke”: “It used to be a very liberal issue, so it’s an interesting time that we live in.”

6. Most important, include as strong an endorsement as possible from the company’s founder, without telegraphing to shareholders that changes won’t be made if they demand them. Cue Hastings: “Ted has passed the Keeper Tests for the last 22 years.” The big picture, he said, is that Netflix “is continuing to have some of the most popular shows in America and around the world. We can always pick it up and, you know, we want to do that.”

Because I was curious, I asked media analyst Michael Nathanson, a Netflix bear, what he would have liked to ask Sarandos in that interview. His response: “I’d ask him why do they think their movie strategy is a good use of capital? I’d ask them if making all titles available to binge makes sense? Or will that change? Are they fighting in too many countries? What is happening with their library content, how is that spending over the years working out in terms of repeat viewing?”