- 31 minutes ago
Netflix spent two decades transforming how entertainment is distributed. Its next challenge is helping shape how entertainment is experienced. As audiences become more fragmented, technology more embedded, and AI more present across the creative process, the definition of an entertainment platform is expanding rapidly. In this fireside chat, Chief Product and Technology Officer Elizabeth Stone offers a behind-the-scenes look at how Netflix is navigating that transition, from personalization and live programming to the role of AI in both product development and creative workflows. A rare glimpse into how one of the world's most influential entertainment platforms is preparing for its next chapter.
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00:00Get ready to welcome the Chief Product and Technology Officer of Netflix, Elizabeth Stone, in conversation with Stephen Levy, Editor
00:11-in-Chief of Wired.
00:13Please welcome them to the stage.
00:35Okay.
00:40Great to be here.
00:41Yeah, I know, I know.
00:42We got the music.
00:43I'm like taking in the whole room.
00:45Yeah, okay.
00:47Energy is palpable.
00:49I could feel it in the building, and now we're front and center.
00:52Okay, well, Elizabeth, before you joined Netflix, and I think it was 16 years ago, and this will be very
01:04familiar to you,
01:05the CEO of a company called Time Warner, Jeff Bukes, said that Netflix's ambitions was like the Albanian army trying
01:17to take over Hollywood.
01:21And guess what?
01:23Where's Time Warner now?
01:26So it's great to talk to you about this amazing company, which, you know, came out of sending DVDs by
01:35mail.
01:37I remember talking to your co-founder, Reed Hastings, when he was doing that, what his plan was,
01:44and there's been different eras of Netflix.
01:48You know, there was the sending out the DVDs and the red envelopes.
01:51Then they went digital, and then they started doing original programming.
01:58What do you say this era is in Netflix?
02:02What's the focus of what Netflix wants to do now?
02:07Yeah.
02:08I mean, it's hard to build on a history where Netflix has continually disrupted and defied all odds,
02:16but I will say we've got a great ambition to do it again, which is to shape the future of
02:22entertainment.
02:24And that includes being able to bring together a much wider array of types of entertainment,
02:31because entertainment is no longer one thing.
02:34It's beyond film and series.
02:36It's games.
02:38It's live content.
02:39It's creator-driven content.
02:41And so the next era of Netflix will be one that shapes not only the breadth of content programming in
02:48one service,
02:49but a product and technology experience that makes that feel perfectly seamless and cohesive for consumers around the world.
02:57Wow.
02:58So let's, like, deconstruct some of this.
03:01Yeah.
03:01So how do you do that?
03:03So do you feel that in the past, it's just been, you know, like one form of entertainment,
03:08like watching TV shows and movies, and now you're moving to other kinds of formats?
03:14That's right.
03:15That's right.
03:16So we've already introduced live content, which is something we've been building towards for the last three years,
03:22with a lot of exciting content, originally in the United States, so including sports content like Tyson Paul, Fight, NFL,
03:30more recently the World Baseball Classic, which is the largest title ever for Netflix in Japan.
03:37And we've built on that, in addition, by introducing games.
03:42So we have both mobile-based and cloud or TV-based games.
03:47And then earlier this year, introduced podcasts, which is yet another type of creator-driven content.
03:54And so at this point, if you log into Netflix, which hopefully all of you do regularly, you will see
04:00that array of opportunities,
04:02where sometimes you're sitting with your family on the couch and you want to watch Lupin and be immersed by
04:08that.
04:09Other times you want to be actually participating.
04:12That could be live voting.
04:14That can be games.
04:15Other times you want to hear something that's timely and of the culture,
04:18where you'll listen to the latest Bill Simmons podcast.
04:21We want to be able to draw the thread between all of those in the offering.
04:26Well, isn't there a danger of people saying, well, what is Netflix?
04:29You know, it had this identity that, you know, as a subscriber, you know, I would say, okay, this is
04:37what I use Netflix for.
04:41But then if it becomes everything, maybe it loses that focus.
04:46I don't think of it that way.
04:47I think Netflix has had a great reputation of being a must-have entertainment service.
04:55And we want to continue to build on that and be that as consumer expectations shift.
05:01I think consumers would not say that entertainment is one thing.
05:04And so if they're not thinking of it that way anymore, Netflix should not be thinking of it that way
05:08anymore.
05:09But the experience you described might be one where it feels disjointed or somehow fragmented,
05:18and we're doing completely the opposite, which is making it make sense.
05:22So to have an example, like I mentioned, I could watch the Bill Simmons podcast.
05:27I could then watch Quarterback, which is one of our documentary series.
05:31I could watch an NFL game, and then I could play the FIFA World Cup game.
05:36And that actually, I think, is a very logical connection that consumers will see,
05:41especially if we make the product as strong as it needs to be.
05:45I don't know.
05:46Maybe I'm just cheap.
05:47But if I were running Netflix, I would think, well, the least cost-effective thing I would ever want
05:54is like NFL games, which are the most expensive content possible, right?
06:00And not only that, when I get an NFL game, everyone complains because they say,
06:06oh, my God, I have to get Netflix to watch this NFL game?
06:09So I don't necessarily know it promotes goodwill.
06:13You're spending a fortune.
06:15The NFL makes you pay a premium to buy that.
06:19But tell me, as a data scientist, which you are, how are you saying, this is great,
06:25this is really working for us?
06:27Because we program for what audiences want.
06:30And there are absolutely parts of the Netflix audience who love sports,
06:36who think about, I want to have that all in one place.
06:39And so we're excited that, to use as one example, two years ago,
06:44going from the Tyson-Paul fight to the NFL games to weekly WWE, worldwide wrestling,
06:52that that actually appealed to a very important audience for Netflix.
06:56And it gives that audience and those members a reason to stay.
07:00So for them, we're adding a lot of value to the subscription,
07:03and it actually really supplements or complements a lot of the other of the offering we have.
07:09So in podcasts, I can get my podcasts anywhere, right?
07:15And podcasters, you know, generally resist the idea of saying,
07:19I'm going to tie myself to one platform.
07:22They like, you know, the most popular ones like to be available,
07:26even if they have, you know, some kind of deal with, you know, one place or another.
07:32You know, they'll like to be available there.
07:36How do you see that as a premium of, you know,
07:38people don't think of Netflix as a place necessarily to go for podcasts.
07:42You know, what's that effort been like?
07:46Well, for the podcast that we've launched so far,
07:49it's a combination of both exclusive and non-exclusive.
07:53So there are some exclusive podcasts on Netflix, which are a draw in themselves.
07:57Many of the largest, of course, so a great recent example is we're going to have Jay Shetty on Netflix.
08:03And that does attract a very large global audience.
08:07The appeal of why come to Netflix is that Netflix also has a lot of other content that you're interested
08:13in.
08:14So now it's on one service where I could think about my Monday morning commute,
08:18where I want to listen to Jay Shetty and satisfy what I want on a Friday evening with my family.
08:24And in a world with lots of choices and often a lot of fragmentation and entertainment,
08:29it is appealing for consumers to have that in one place.
08:32We have both the exclusive, the non-exclusive to try to make that happen,
08:36but it's how we pull that together into a must-have package that makes it attractive.
08:41So when you say, you know, they do it on a commute, like people like to listen to an audio
08:46and...
08:47And they watch the video.
08:49Yeah.
08:50Yeah.
08:50So increasingly podcasts are video-driven, which many probably know.
08:54And the thing that we find about a new example of content like podcasts is it's relevant in a different
09:01moment for consumers
09:03than much of the rest of our offering.
09:06So if you think about film and series are often living room in front of the TV, evening or primetime.
09:13Podcasts, similar to games, similar to other things we're expanding into, are much more mobile forward.
09:18They can be mourning.
09:19They can be killing moments throughout the day.
09:23And so those are moments that we don't want to have to lose because they're a place where we could
09:27actually deliver well for consumers
09:29and actually make it feel like I'm spending time, not killing time, getting high-quality content.
09:35You know, I want to pick almost something you said a minute ago about the NFL and saying you want
09:40more games.
09:40You know, I extract from this that you mean you want more NFL games that maybe in the next round
09:48of bidding,
09:48you know, you could be the provider, you know, of many NFL games.
09:55That's a possibility.
09:57So we already did announce a deal to expand the number of games that we have.
10:01One of the things that will be interesting about that expansion is the extent to which NFL is excited about
10:08Netflix
10:09because we have such global reach.
10:11And so we give a partner like the NFL access to a much more international audience.
10:16So an example of that would be the exhibition game in Australia that we now have for the upcoming year.
10:21So, yes, we're open to that.
10:23But I think it matters, similar to my point earlier, about how do we program in a way that is
10:28very satisfying for our audiences,
10:29which doesn't always mean we need all of something.
10:32We need the right types of things at the right cadence.
10:37Gaming is a big part of what you do.
10:40It's a very big push.
10:42You did a reset at some point.
10:44You were working on games for a few years and then done what was called a reset.
10:48What were the lessons you learned from the initial effort that now you're addressing, you know, in a different way
10:54for games?
10:55The focus for us now on games is really homing in on where we think we can offer something differentiated.
11:03There are a lot of game choices out there.
11:05So what Netflix brings to a consumer or a member needs to be something that has unique value.
11:11So if you look at our strategy now, I think two great examples of that are first, the playground mobile
11:17game that we introduced earlier this year,
11:20which is a safe space for kids to have multiple games included as part of your subscription.
11:25It's a mobile game with something that many other games don't offer, which is that safe space for kids often
11:31built on, in some cases, IP that is Netflix owned.
11:35The other great example of our strategy on games is the focus on cloud and TV, where Netflix already has
11:42a great strength in TV-based entertainment.
11:44And to build on that, especially in those moments where it's family fun for a party night and you want
11:50to play something like Boggle,
11:51which I am not particularly good at, but many people enjoy it, or you think about something like the new
11:56FIFA game, which is now available on TV.
11:59So both of those are examples where we think that there's an unmet need in the market for consumers, where
12:04we think we have an advantage in what we can offer.
12:06You know, I've been a Netflix subscriber for many, many years.
12:10If I wasn't, like, writing about the field, I would have almost no idea that Netflix has, like, a lot
12:17of games.
12:17You know, I mean, is that just me, or is it a challenge to surface that or get people to
12:24try it?
12:25We do surface the games on both TV and mobile.
12:29Part of the reason that it feels like there's less awareness is we have waited until we felt like we
12:34had a strength of catalog or slate from a game's perspective to make it more prominent,
12:40which is one of the challenges that the product team has to think about how to strike the right balance
12:45in promotion and merchandising on the homepage.
12:48Now that we have strength in the offering, like that Playground app or our party games, they are much more
12:55prominent in terms of promotion.
12:57But we're delicate in how we do that because we know that games are not relevant for everyone at every
13:02moment.
13:03And so this is where the strength of personalization comes into play, too.
13:06Yeah, good.
13:07I'm glad you opened the door to personalization there.
13:09So maybe I'm not seeing it because you know so much about me.
13:13You know that I'm not going to be playing these party games.
13:15Is that why I'm not seeing that?
13:17It could possibly be, but hopefully we can change your mind if we make a good enough game.
13:21You have to leave some door open for that.
13:24When you do personalization, I know it's a very big part of the recommendations for sure, but are you only
13:31using my behavior on Netflix?
13:33Are you drawing from other sources of information about me?
13:37We're only using your behavior, what you've watched, what you've liked.
13:41So how do we know you liked it?
13:43You finished a film.
13:44You finished a series.
13:45You gave it a thumbs up or even better, a double thumbs up.
13:49So there's an incredible amount of knowledge that shapes the recommendations for you just based on your past viewing behavior.
13:59The other thing we have is a deep understanding of our content offering.
14:02So we can marry your preferences with our understanding of our catalog to hopefully have the right title at the
14:09right moment for you.
14:10Right.
14:11Well, Netflix has been doing that for a long time.
14:13But, you know, with recent advances of AI, are you like in a super knowledgeable point now?
14:20Do you know, are you able to, you know, are your recommendations the last couple of years been much more
14:25effective by applying, you know, advances in AI?
14:30The short answer is yes.
14:32As the technology improves and our use of it advances, we're able to improve recommendations and personalization.
14:38As you pointed out, machine learning and AI are not new to Netflix.
14:42That's something that we've been using for decades to help with recommendations.
14:45So over the past couple of years, it's the step function advancement, of course, in generative AI, which we're able
14:52to integrate in even richer member content understanding.
14:56And we've already seen benefits from that in terms of the quality of the recommendations for members.
15:01It must be more challenging as you added more and more content, isn't it?
15:06It is, of course.
15:07It's both the volume of content, the depth of it, the breadth of it.
15:12So I think one of the challenges that we'll be facing is, especially as we continue to expand beyond film
15:18and series, knowing, of course, the live event is timely.
15:22It's about watching in that moment with community games.
15:25We have to strike at the right moment when you're in the mood to play a party game or lean
15:29back and watch a great film.
15:31So that personalization problem becomes more challenging.
15:34It has always been one of our strengths.
15:36So I believe it's going to continue to be a strength.
15:38So speaking of big content, about a year ago, you made a deal for a massive content deal for TF1.
15:47You know, the French channel here, a lot of people are probably interested in it.
15:51You announced that it was going to happen in the summer of 2026, which happens next week.
15:57Yeah, here we are.
15:58I think it was a year ago exactly today that we announced that deal.
16:02So we have been hard at work in that partnership with TF1, extremely excited about what the experience is going
16:08to be for French members.
16:10So we are fully integrating TF1's content, their live content, their linear channels, their video on demand, and it's coming
16:18soon.
16:20Are you going to be doing the same thing in other countries?
16:23Hope so.
16:24So the intent is, of course, TF1 is the first partner.
16:28It's a great example of our expansion into new and innovative ways to bring more value to our members.
16:35So some of that can come from partnerships like TF1.
16:39Some of it can come from podcast deals that we do and so on.
16:42So let me ask you a couple of questions about how you assess success on Netflix.
16:49Now you're going to have this TF1 deal indicates much more content.
16:55So it's a question of like, you know, there's this giant iceberg of content and people only kind of get
17:01the thing on the top there.
17:04That changes it.
17:05On the other hand, sometimes you'll spend $200 million to make a movie and, you know, the gray man or
17:12something like that.
17:13And when Hollywood studio makes a movie, it's easy to see how that's successful.
17:21You've got the box office, you know, maybe they'll sell it to, you know, Netflix and other places.
17:27You see how much money they're making.
17:30Netflix, it's really obscure whether something's a success.
17:34Can you tell us, you know, how you assess success and why, you know, you feel that some investments, you
17:43know, can major movies or a big commitment to a TV series make sense for you?
17:50Sure.
17:51So even in your initial imagery of the iceberg and maybe there's only the tip of it that you see,
17:57no company before has programmed with the ambition that Netflix has.
18:02So we have more than 300 million members, which translates to programming for almost a billion people around the globe.
18:09So if you think about that variety of tastes and preferences and needs across different times of the day or
18:16different moods or moments, that requires a huge breadth of content.
18:21So instead of thinking of it as the iceberg, I would think of it as we really do want to
18:26program for that large of an audience and to do it in a compelling enough way that members return over
18:32and over again because they know they're going to find something they love.
18:35Which is how we would measure success, which is how often is a Netflix member coming to the service, finding
18:42something, watching it, and hopefully giving it that double thumbs up to show that they love it.
18:47And that makes all of the content investments we make extremely worthwhile because that means we're delivering more value to
18:52that subscription offering.
18:55Well, sometimes people's favorite series might be canceled, and people feel gobsmacked.
19:01I don't know why this happened.
19:02It was successful.
19:03But you're assuring us that you really made that decision.
19:07It was a smart decision to leave these people adrift.
19:09They don't see what happened to their characters.
19:13Oh, that's tough.
19:14You know, I have some of my own favorites that have been canceled over time.
19:18You couldn't pull any strings?
19:20I tried.
19:21Maybe get a private showing.
19:22I tried.
19:22Yeah, my favorite title is actually Unchained, based on the Tour de France right here.
19:27So that's going to be my longtime favorite after the first three seasons.
19:32The way I would think about it is that every dollar has an opportunity cost to it.
19:38We want to program in a way that really satisfies audiences around the world.
19:43But we have to make tough choices in order to do that well.
19:47We have enormous reach.
19:48We have enormous viewing on Netflix.
19:50And so we make decisions based on where do we think we're actually going to satisfy an audience need.
19:55And some titles, while deeply loved, don't satisfy that recurring audience need or as broadly as makes sense for the
20:02business.
20:03I get that it's disappointing, though, of course.
20:05So, obviously, providing that content is, like, the biggest expense for Netflix.
20:12And that charge just gets passed on to consumers.
20:17A lot of other streaming services sort of are tied to other things.
20:23You know, Amazon Prime gives it to people.
20:27They just get it because they want Amazon to deliver packages.
20:32Apple TV is part of a bundle for Apple stuff and cloud and things like that.
20:39Netflix, you just pay for Netflix.
20:41That's a discrete choice.
20:43And the price keeps going up.
20:47Are you...
20:48When does that stop?
20:50When do customers say, you know what?
20:52I'm spending, you know, $22 a month, you know, in the U.S., for Netflix?
20:58Wow.
20:58A year ago, a couple years ago, I was only spending $12.
21:01When does that stop?
21:03I think Netflix is incredible value for money.
21:06I really believe that.
21:08And all the content we've talked about here in this conversation that we're adding of new film, new series, new
21:13games, new live,
21:15is a constant addition of value to what we're offering.
21:18So, I would disagree with the premise that it feels like it's a stretch.
21:22Of course you would.
21:23And I would say, since we've introduced our ads plan, if I take France as an example, given where we're
21:29sitting today,
21:31that's €8.99 for the ads plan with an incredible catalog of content around it.
21:37So, I think that's a great comparison.
21:39And we're going to continue to invest so it makes sense for consumers.
21:42Yeah, when you introduced ads, I felt like, uh-oh.
21:45You can choose an on-ads plan.
21:47You know, you let them in the door.
21:51Yeah, we believe in choice, though.
21:53Only limited ads, right?
21:54You know, we'll see.
21:56It's another place where we hope to innovate, which is we think we can do a better version of advertising
22:02that's more relevant for consumers who choose that plan and also more creative in what the experience is.
22:09We talked about AI.
22:10Is there a red line for Netflix is saying we're not buying any AI-generated content that, you know, in
22:20our massive catalog,
22:22we're not going to include, you know, stuff that people whip up by AI?
22:28So, our position, and I feel very strongly about it, is we provide tools for creators to bring their visions
22:35to life.
22:36There are going to be some creators or filmmakers who say, I want nothing to do with AI.
22:41That's fine.
22:42We work closely with them.
22:43There's other filmmakers and creators we work with who are excited to experiment,
22:48who think that there's parts of what they imagine in a story that would not be possible without using technology,
22:53and we would support that so we have the full range.
22:57But we really deeply feel like that's then a creator choice,
23:01and we want to make sure we're providing the tools to support that.
23:04So, we might see, you know, if it's a reasonable director doing, you know,
23:09can I generate a movie, we'll see that.
23:11If a creator chooses to do that, we would absolutely want to partner with them.
23:15You know, Reed Hastings once said that Netflix's competition is sleep.
23:22But your competition, really the leader in video is YouTube, you know, by the numbers there.
23:30They're getting into podcasts.
23:32They're getting into live.
23:33They're doing a lot of things in those formats that you say that.
23:38Inside of Netflix, are you looking at YouTube and saying, how do we beat them?
23:44No, not specifically.
23:45We're trying to say, how do we become the best entertainment choice for consumers?
23:50We've always had competition.
23:52It's taken different flavors over the years.
23:55I hope we always have competition.
23:56It makes us do better work.
23:58It makes us fight to get that time, which, of course, is limited,
24:01and there's lots of choices.
24:03I think it makes us develop better content.
24:05It makes the team think about how do we do even better from a product and technology perspective.
24:12It is part of the reason that we're broadening our offerings so that we can make sure we are competitive
24:17with all the choices out there.
24:18But it's not consuming.
24:20I think it's more pushes us to continue to have larger ambition and to innovate.
24:24One final question before we go.
24:29Is the feeling at Netflix about the Paramount deal regret that you didn't wind up with it or a sigh
24:38of relief?
24:40I don't think there's an easy answer to that question.
24:43I came out of that particular period of time impressed by our discipline on multiple fronts,
24:51including how focused we stayed on Netflix members and moving the Netflix business forward.
24:57Similar to the question about competition, we're relentless in focusing on what we're delivering.
25:02So I'm glad we came through that without losing a beat of that focus.
25:06Hey, thanks so much.
25:08This was great.
25:08Thanks for having me.
25:09Nice to chat.
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