The Story Of The Guy Who Decides What Netflix Produces
How Ted Sarandos went from college dropout to the most powerful guy in Hollywood.
Phoenix. The late 1970s.
A boy grows up in an entertainment obsessed family. Spends countless hours watching movies and TV shows with his parents, siblings, and friends.
His father prefers to watch shows at home because when he goes to a movie theater he has to go two hours without smoking.
On Sunday nights, the family gathers at Grandma’s house to watch a local channel that reruns all five episodes of the Mary Hartman Mary Hartman show that had aired earlier that week back-to-back.
It’s binge watching before there was such a thing.
His parents buy a new device just after it’s released to the world — a VHS player.
Now in high school, the boy wanders in to Arizona Video Cassettes West, the second video rental store ever to open in the state of Arizona. It happens to be near his house.
He becomes a regular at the store and talks the store’s owner into hiring him.
He works there through the remainder of high school and sticks with the job as he goes on to community college.
The store’s not busy — not many people even own VCRs at this point, let alone rent videos. So he has a lot of spare time on the job.
He spends nine hours a day watching videos in the store —sees everything they have in stock.
And he starts to notice things. To analyze which are good and which are not. He chats with customers and notices trends regarding which movies they like or not.
He pays attention as word of mouth develops and spreads the popularity of certain titles. He learns to predict which movies will be popular and which won’t.
He starts to see all this information as data points.
As the video rental business grows, the store expands and he grows with it. He drops out of college and manages eight stores in what becomes a growing video store chain.
He learns to negotiate contracts, make deals, hire and fire employees, and work with distributors to acquire titles he thinks his customers will enjoy.
It’s as if he’s going to business school and film school at the same time.
In 1988, he’s hired to run West Coast sales for one of the largest video distribution companies in the United States.
The guy who hires him says he would never hire somebody that didn’t have a college degree — not realizing the young man he just hired was a college dropout.
Years go by and the man sees his career flourish in the video rental industry.
Then, in 1999, he’s approached by a former computer scientist who offers him a job at a fledgling video distribution company.
But that company has a different idea about how to distribute videos. It’s an idea inspired partially by a project the computer scientist was assigned in college.
The computer scientist had been challenged to determine the most efficient way to move a large amount of data to a large amount of people around the world.
After crunching the numbers, the computer scientist suggested the most cost-efficient way at the moment to do so was to put the data on discs and just mail them to people.
Years later, the computer scientist wondered if the same could be done with movies, which were essentially large amounts of data.
The computer scientist’s name was Reed Hastings and the company he formed to explore that idea was Netflix.
And now Hastings believed he had found the right man to choose the content his company would offer.
That man was Ted Sarandos.
Sarandos, who had spent a lifetime consuming entertainment, studying how people consumed it, using data to predict which content would succeed, and even binge watching, would now have the opportunity to become Chief Content Officer at Netflix.
He took the job, has guided the rise of Netflix ever since, and changed the entertainment industry forever.
Not bad for a kid who dropped out of college to work in a video store.
To hear more about Ted Sarandos, check out his great interview on the Industry Standard podcast.
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