00:00Geetha, do you think Reed Hastings stepping down, leaving the board in June, makes any difference for this company?
00:05Could that be any reason why we have such big bad losses for Netflix here at the Open?
00:11I don't think so, Danny.
00:13I mean, I think this succession plan, I mean, if you just look across the media landscape, I mean, this
00:17is one of those succession stories that has really been executed absolutely flawlessly.
00:23You know, he had been planning his succession all along, kind of handed off the reins to Ted Sarandos and
00:29Greg Peters.
00:30And so we knew this was coming.
00:32So I really don't think this has much to do with the share price reaction today.
00:37I think that is all really just a function of a little bit of the disappointment in terms of the
00:42lack of a guidance rate.
00:44Did they give us any reason why they thought that the outlook was going to be so bad?
00:47I did not get a chance to look through this yet because I think that that's one of those things
00:50that is that is this I think it could be or it definitely will be because that could are they
00:55do you feel like there's any sandbagging or anything going on there or that there's real issues?
01:00I don't think there's any issues, Sarah.
01:02I think it's just more a timing situation that we have going on.
01:05So the second quarter guidance was anyway supposed to come in a little bit light.
01:09They had already kind of pointed to this in terms of the expenses.
01:14So content spending this year Netflix has flagged would be pretty high.
01:18It's actually supposed to go up to almost $20 billion.
01:21That's a 10% increase versus historically about a 6% to 7% increase.
01:25So they're really kind of doubling down in terms of content investments.
01:29We're seeing them make this big push into live content, into sports, into different verticals, really, gaming, you know, video
01:36podcasts.
01:36So it's a little bit of an offense defense strategy, I would say.
01:40You know, they definitely want to deepen their competitive mode and they're also preparing, mind you, for a much stronger
01:47paramount and, you know, Warner Brothers discovery.
01:49So they're kind of really taking a look at the lay of the land here.
01:51So we knew going into the quarter that expenses would be elevated.
01:55But I think just the just the level and the magnitude of that of the expense increase in the second
02:03quarter probably was, you know, took investors or caught investors by surprise.
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