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Netflix is the biggest paid subscription streaming service in the world. But two years ago, its dominance was in question after it reported its first subscriber decline in over a decade. So the company did something radical: it cracked down on password sharing. The man behind the move? Well, he’s now one of the most powerful people in Hollywood.

Meet Greg Peters, the co-CEO of Netflix. Bloomberg’s Lucas Shaw recently sat down with Peters for his first major print profile. He tells host  David Gura about Peters’ bold plan to transform Netflix and the way all of us watch everything from TV shows to sports.

Read more: Netflix Had a Password-Sharing Problem. Greg Peters Fixed ItListen to the Big Take podcast every week day and subscribe to our daily newsletter

Here is a lightly edited transcript of the conversation:

David Gura: Netflix is the largest paid streaming service in the world. But it’s so much more: 

Lucas Shaw: When you think of sort of traditional film and television, Netflix is the biggest TV network. It is the most productive movie studio.

Gura: Lucas Shaw reports on the business of entertainment for Bloomberg, and he’s covered Netflix closely for years, as the company has grown from a DVD-by-mail service into a streaming juggernaut. 

Shaw: It's been making original programming for about 10 years, and in that 10-year span, it has morphed from sort of, like, this small, cuddly company into the most powerful force in Hollywood.

Gura: Today, Netflix is the envy of other paid subscription services – along with many TV networks and movie studios. 

But back in 2022, there were a lot of questions about Netflix’s future – coming out of the pandemic when streaming use skyrocketed, then plateaued.

The company had the worst six-month stretch in its history, and it lost around $200 billion in market value. 

But Netflix defied its critics, and engineered a turn around. 

And Lucas says there’s one person who’s led the way through the company’s rebound:

Shaw: He's one of the most important and powerful people in the media entertainment business, and someone that I think nobody knows anything about.

Gura: Greg Peters is Netflix’s co-CEO – an executive hand-picked by Reed Hastings. He’s the company’s billionaire co-founder, who stepped aside last year. Well, now, Peters runs Netflix alongside Ted Sarandos.

And together, they’ve put Netflix on track to generate $10 billion in profit this year. 

Gura: On today’s episode, “Who is Greg Peters?” And what’s his vision – for Netflix, and how we’ll watch, well, everything? 

I’m David Gura, and this is “The Big Take,” from Bloomberg News. 

Gura: Bloomberg’s Lucas Shaw recently sat down with Greg Peters for his first print profile since he became Netflix’s co-CEO last year.

Gura:  Can you describe what it was like to meet him, uh, and sort of how you thought about the scenes or the situations in which you'd want to show him, uh, in this role?

Shaw: Well, I only had so much control over that, right? Netflix is a very controlling company. You know, normally if you profile someone, you want to spend a lot of time with them. You want to see them in multiple settings. But you know I knew I wanted something that was sort of more of a corporate event to see him interacting with peers, and so that ended up being going to this thing they have called “New Employee College,” which is like new hire orientation. And he gave sort of a, basically a pep talk to this room of people.

Gura: The orientation happened at an art deco theater, in Hollywood, and Peters started that pep talk by tracing Netflix’s history – a history he helped shape. 

Shaw:  If you look at the biggest initiatives for the company over the last few years, he has been the person leading those.

Gura: Peters is not exactly your average tech guy. He's a bit of a Renaissance man. He speaks six languages, and plays the didgeridoo. After college at Yale, where he studied physics and astronomy, he got a job as an engineer at an online wine retailer, where he developed a taste for the finest barolos before the dot-com bubble burst in 2001.

Over the next few years, Peters bounced around – from tech company to tech company, and in 2008 he got a call from Netflix.

Shaw: They were looking for someone who could help get the service distributed on a lot more devices. Because Netflix started off only being available on your computer. You know, I watched it on my laptop in college that year. And Greg had a resume that was in many ways perfect for that, because he was navigating this relationship between representing software and negotiating with consumer electronics companies.

Gura: Peters was part of the team that convinced the TV manufacturer Vizio to put a Netflix button on its remotes. And that convinced Netflix co-founder Reed Hastings that Peters had potential. 

Shaw: Reed takes a liking to him. He sees someone with broad interests. He sees someone who is sort of multifaceted because he, he understands the technical side very well and can do things that other people explain to me that I would struggle in, in explaining and so I think that became attractive to someone like Reed.

Gura: Hastings tapped Peters to oversee Netflix’s expansion in Japan, and then, Peters became the company’s chief product officer. 

And in that role Peters started looking into something that had become a problem for the company: password sharing.

Shaw: Netflix started to study it. They tried to examine both ways to identify who was sharing, and then how you would stop them from doing so.

Gura: There are a lot of ways people share Netflix. Like a family of four using the same account under one roof. But then, there’s the twenty-something who’s moved away from home and lets his two friends and his ex-girlfriend use his mom’s account. Peters and his team studied all those scenarios.

Shaw: There's a lot of studying of building the algorithm to determine who is sort of unfairly sharing. And then how do you communicate that without pissing people off. 

Gura: After rooting out the moochers, Netflix started to think about how it could launch a broader crackdown in 2022. But Lucas says there was this divide, within the company, about how to proceed.

Shaw: They have a big disagreement basically about what the best approach is. Reed Hastings on one side, Greg Peters and most of his, most of the executive team on the other side.

Gura: Hastings – Netflix’s co-founder – thought Netflix should charge by physical location – for example if you are lucky enough to have two houses, you’d need two Netflix accounts. 

Peters thought that violated Netflix’s core promise – that if you paid for the service, you should be able to take it with you.

Peters advocated for a model based on individual users – you could access Netflix wherever you wanted, but you’d have to pay to add new users to your account. 

Shaw: So, they test both models in Latin America, in sort of two distinct tests, and, and Greg's instinct proves to be correct. 

Gura: By this point Hastings had been thinking for a while about his next chapter. The fact that Peters’ approach worked – that it led to more sign ups, fewer cancellations and less online outrage – was the last in a string of successes that convinced Hastings Peters could lead Netflix. 

Shaw: He was, as Reed Hastings described, like kind of the battlefield general and so there’s a reason that after they had settled on how to crack down on password sharing, Reed Hastings decides “now is my time I can leave and I trust Greg to succeed me.”

Gura: In January 2023, Netflix announced Hastings would transition to a role as executive chairman. Peters became co-CEO alongside Ted Sarandos.

Shaw: Now you've got this structure where you've got Greg Peters seen as sort of the tech Silicon Valley guy – in many ways the heir to Reid Hastings – working alongside Ted Sarandos, who's the Hollywood guy running this, this massive company.

Gura: Netflix is now thriving. It’s adding subscribers and advertisers even as other streaming services struggle. Which is something Lucas saw Peters brag about, when he was on stage at that new employee orientation: 

Shaw: Greg is basically saying, you know, all these traditional media companies with cable networks, they are screwed. their cable networks are shrinking, and that's depriving them of resources. And their streaming services don't make any money. And so these aren't sort of real threats to us. And the companies that have the money to compete with us, the Apples and Amazons of the world, they don't really care about entertainment. Like Amazon has been at it for almost as long as Netflix and Netflix has probably released more hit shows this year than Amazon has released in its entirety. And I think he wants to say it's ours to win, but he feels that Netflix has always been more effective when it has seen itself as the underdog. Um, and so he, he sort of ends this by saying it's ours to lose

Gura: “It’s ours to lose.”  Coming up after the break: Greg Peters’s strategy to win. 

Gura: Lucas Shaw oversees media and entertainment coverage for Bloomberg, and writes a weekly newsletter called “Screentime,” about the business of pop culture.  Which means he knows a lot about the competitive landscape Netflix is in. Lucas says one part of co-CEO Greg Peters’ plan for Netflix is pretty simple. It’s to focus on what the company is good at: 

Shaw: I think that they want to continue to be the best and most popular streaming service in the world without getting distracted by a lot of other potential initiatives. But there is a recognition that they need to evolve the business and have sort of multiple levers for growth.

Gura: Peters isn’t pushing Netflix to expand into movie theaters, or build theme parks, like some other media companies.  

But Lucas says Netflix is entering a new phase – one where making more money from its current model is as important as adding new subscribers. 

And the company has identified three ways to do that: to sell ads, to make video games and to raise prices. 

When it comes to the first one – advertising – Netflix has a pretty straightforward strategy:

Shaw: If you can get people to spend more time watching Netflix, you can sell more ads and make more money.

Gura: And one way to get subscribers to spend more time on Netflix is live programming. 

The company announced last week it’s acquired the rights to stream two NFL games on Christmas Day: the Chiefs versus the Steelers, and the Ravens versus the Texans. Netflix also acquired the rights to air professional wrestling, and there are plans in the works for awards shows and more comedy specials. 

Shaw: I would anticipate you'll see just more and more live programming and get to the point where they have, you know, something live almost every day.

Gura: Are there signs that that strategy branching into live events is working for them?

Shaw: It's really too soon to tell because their early live programming didn't matter, didn't move the needle. The Chris Rock live comedy special, it did fine, right? But it's still a live comedy special. There's only so much you can get from that. They had a “Love is Blind” reunion that was a technical failure. They had like this Mark Twain prize. Who cares? They had a celebrity golf match with golfers and F1 drivers sort of more of a stunt test. These are all I think Netflix trying to figure out the — what could work and not spend too much money because live sports is, can be prohibitively expensive. I see all of these as what works and how should we do it?

Gura: Then there’s Netflix’s ambitions in the world of gaming. 

Shaw: They have a very nascent investment in video games, which is also something that Greg is in charge of. They don't make any money from it yet. And it's still really unclear if that's working.

Gura: So, there’s advertising and gaming, and then everyone’s favorite: charging more money.

Gura: We've seen the price increases, and I wonder, are we at the end of that?

Shaw: No. 

Gura: How do they think about how much more they can raise prices and maintain audience or continue to build audience?

Shaw: Well, their argument is always we feel comfortable raising prices if we are giving you more that you like and care about, right? Because if you think about the start of Netflix and it was very affordable and because they had so many licensing deals with so many other studios, it was in many ways a replacement for cable at a fraction of the cost of cable. It's still a fraction of the cost of cable. We can argue over whether it has as much, right? They're not getting as nearly as much license from others, but they make a ton. If you really wanted to just watch Netflix, you wouldn't get all the news and sports, but you could replace all the entertainment programming anywhere on just Netflix. So I think as they invest more, you know, they bring in wrestling, they bring in football, they bring in gaming. As they add more of these elements, they feel comfortable raising prices, but it's a tricky balance.

Gura: So, what are the odds Greg Peters will succeed? Lucas says that, from everything he’s heard about him, and what he saw as he reported on him, Peters is not someone people tend to bet against. 

Shaw: There were stories of, you know, a company off. off sites where they would play sort of fun, silly, like Family Feud type games. And he would take it very seriously and you would know that if you were on his side you were going to win. Actually, I had one of these awkward moments you have when you're profiling someone where I was like, you know, I talked to someone who said that you would play Family Feud and Jeopardy and these games and that you would cheat. And he both categorically denied ever cheating while saying, you know, if you're going to do something, you might as well do it to win, which I thought was very telling.  You know, I drew a comparison to how you might sometimes, like, you don't want to spoil your kids by making them think that they could always win and losing on purpose. And he did clarify that he has routinely lost on purpose to his children. Uh, but I think when facing other adults, Greg Peters does not like to lose.

Gura: You can sign up to Lucas’s “Screentime” newsletter at bloomberg.com

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