Hello, and welcome to the Netflix Q4 2020 earnings interview. I'm Spencer Wang, VP of IR and Corporate Development. Joining me today are Co-CEO, Reed Hastings, Co-CEO and Chief Content Officer, Ted Sarandos, COO and Chief Product Officer, Greg Peters, and CFO, Spencer Neumann. Our interviewer this quarter is Kannan Venkateshwar from Barclays. As a reminder, we'll be making forward-looking statements, and actual results may vary. With that, let me turn it over to Kannan for the first question. Thank you, Spencer, and good afternoon, everyone. Maybe, Spence, we could start off with you. Just given the guidance and the beat during the quarter relative to guidance. Sequentially, the first quarter tends to be higher in net additions than Q4, but your guidance is lower despite the fact that you beat Q4 by a relatively large amount, and it feels like the pull-forward effect is more or less behind us. If you could just help us walk through the thought behind the guidance and the framework that you used for that would be a good place to start. Yeah. Sure, Kannan. Well, great to see you. Happy New Year, obviously delayed. Yeah. Again, in terms of the guide, first off, we guided to 6 million paid net adds for Q1, as you saw. Obviously, that's still a big number, especially when you think about it in context of 2020, which was by far a record year with 37 million paid net adds. I know you mentioned the pull forward. I don't think we're declaring that we're necessarily through that yet. I think there's puts and calls every quarter. One that's still a meaningful factor for us in the guide is thinking through how we kind of grow through that growth from 2020. There's probably still a little bit of that pull-forward dynamic in the early parts of 2021. More broadly, Kannan, it's just so difficult in this time. This is one of the more uniquely challenging times, not just for life, but that's most important, but also, obviously, in terms of trying to just forecast the growth trajectory of the business. There's just so much uncertainty right now. It's more uncertain than we've ever seen. We're trying to forecast through that. At the same time, one thing that's maybe counterbalancing that is that what COVID has done for the house is it's accelerated that big shift from linear to streaming entertainment. The long-term growth trajectory is at least as strong as ever. There's just more short-term noise and uncertainty right now, but still very strong underlying growth metrics, and that's what you're seeing in the Q1 guide. Great. I guess if you just look at the full year in terms of cadence, 2021 obviously has tough comps versus 2020. I think one of the things you guys also indicated was potentially a $4 million-$5 million pull forward into 2020 from a growth perspective. I think there's been a lot of debate about what you actually meant by that $4 million-$5 million. If you could just contextualize the guidance for Q1 more in the context of 2021. You typically do 28 million-30 million subs in a given year. Is that framework more or less intact, or should we read that $4 million-$5 million comment as a pull forward into 2020? Well, look, I'll take this one. Others can jump in as well. Unfortunately, Kannan, we're not going to provide a full year guide. Just as we talked about, there's so much uncertainty in the business. We can provide a number, but I'm not sure it'd be that bankable, right? It's hard enough to project the next 90 days, let alone the next 12 months. What we feel very good about, as I said, is that longer-term growth trajectory. You've seen us, as you pointed out, the historical growth trends. Hopefully, it'll be plus or minus that, but it's a bit impossible to predict. What we do see is that viewing is up in every region of the world. It's kind of returned from those peak COVID levels, but it's up year-over-year in all regions. Retention is better than it was a year ago. Acquisition is strong. The underlying metrics are strong in the business, but I don't want to provide false precision on a 12-month target. Got it. If you could touch on a couple of regions. The one thing that stood out during the quarter, of course, is UCAN, where most of us thought the market was saturated, but you guys keep accelerating growth despite price increases, which is even more impressive. The other region, which until Q3, despite the benefit of COVID, seemed to have slower growth than 2019, despite the market not being saturated. If you could just talk about the underlying trends in some of these markets and what you're seeing, which is driving some of these trends, that might be useful. Do you want me to go, or someone else want to go? I don't know. Sure. Okay. I'll go again, Kannan. I think the story is pretty similar throughout the world. Every country's a little bit different, but what we're seeing in terms of our viewing trends are similar around the world. The types of content that our members are viewing is kind of similar pre-COVID and post-COVID. Obviously, we have more and more variety of content and great experiences that we're offering to our members. The story is pretty similar. As you know, there are certain countries around the world where we're just further along in our content market fit and our maturation, but we're seeing growth everywhere. Even, you pick Latin America as an example, one of our more mature markets. You look over the past few years, and we've been steadily growing about five to six million paid net adds a year. As you mentioned, in the kind of U.S. UCAN market, we're roughly 60% penetrated, and we're still growing. We're still a very small share of even just pay TV penetration in most markets around the world and small share of viewing. We think we've got a lot of headroom in all these markets, and we're just trying to get a little better every day. Got it. Kannan, if you take the U.S. being our most penetrated market, we're still under 10% of television viewing time as Netflix. Again, we've got a lot of subscribers here in the U.S., but we still have a lot more viewing time that we would like to earn with an incredible service and incredible content. Got it. Spencer, maybe one last financial question and we'll get this out of the way and get into the more interesting part of the discussion. Sure. I won't take offense to that last comment. Oh, come on. The one thing obviously which is new in the letter this quarter is the cash flow guidance, and your cash flow guidance is better than what you guys initially indicated, and the buyback guidance. Maybe you could talk about capital allocation and using the cash for buybacks versus potentially other opportunities, and also why use an absolute gross debt number instead of a leverage target, to frame the buyback discussion. It would be helpful to get that context. Yeah, sure. Thanks, Kannan. We're super proud of where we are from a free cash flow perspective, and we talked a bit internally before the calls what was a bigger milestone for us, the passing of 200 million member mark or kind of turning to this next chapter in terms of our free cash flow and the ability to self-fund our growth going forward, and so we think that's a pretty big milestone for us. To the point of our capital allocation approach, the philosophy remains unchanged, which is that we're going to be disciplined stewards of the capital and try to do things that we believe are value maximizing for our shareholders. We have turned this corner where now we can, as we talked about with $8 billion of cash on the balance sheet, projecting to be cash flow about breakeven in 2021, and then positive thereafter. We want to return excess cash to our shareholders. We won't build up a bunch of excess cash. We'll maintain, as we said in the letter and as you mentioned, about $10 billion-$15 billion of gross debt on the balance sheet, and that's really just to maintain familiarity and access to the debt markets should we need it. There's really not a whole lot of science beyond that. Beyond that, as I say, we put a premium on balance sheet flexibility. We're going to continue to invest aggressively into the growth opportunities that we see. That's always going to come first. Beyond that if we have excess cash, we'll return it to shareholders through a share buyback program. Got it. Reed and Ted, if we could just pivot to a question on competition. This question may feel a little bit unfair, to be honest, because in many ways you created the streaming template for others to replicate. Given Disney's recent success and the kind of numbers they are putting up, it almost feels like Netflix is underachieving versus its potential, and has to work a lot harder to get to comparable scale. Are there any reasons why the Disney numbers are not a benchmark for Netflix and why the company can't get there? Underachieving, Kannan. We included a table- Oh yeah, I had to phrase it that way. in the bottom of our earnings, which is the annualized return over 18 years being 40%. If that's underperformance, we'll do more of that. Look, it's super impressive what Disney's done. It's the incredible execution for an incumbent to pivot and taking on an insurgent that's great. It shows that members are interested and willing to pay more for more content because they're hungry for great stories, and Disney does have some great stories, it gets us fired up about increasing our membership, increasing our content budget. It's going to be great for the world that Disney and Netflix are competing show by show, movie by movie and we're very fired up about catching them in family animation, maybe eventually passing them. We'll see. A long way to go just to catch them. Maintaining our lead in general entertainment that's so stimulating, like "Bridgerton," which I don't think you're going to see on Disney anytime soon. Ted, you want to follow up on that? No, I think when you talk about it in competitive terms, you think about Christmas Day 2020, where you have an enormously anticipated film like "Wonder Woman 1984," and "Soul," both debuting on competitive services and us launching what turns out to be one of our biggest launches ever. I do think what Reed said is it does point to people have tremendously big appetites for great entertainment and all different kinds of it, and the fact that they're willing to pay more for more programming I think is very encouraging. We've always said that our goal is we want to make everybody's favorite show, everybody's favorite film. Other people are going to try to do that too, and people will supplement their Netflix subscription to get that content, and which I would think is a super healthy dynamic. Kannan. And if I- Sorry, go ahead, Greg. Okay, yeah, sorry. If I could just add as well, I think there's the membership lens and the number of subscribers, but it's also useful to look at it from a revenue lens, which of course is the fuel that we have to basically create more of that content to get that virtuous cycle flowing more. The only other thing I would add to that, Kannan, not to get too in the weeds on the numbers and not to take anything away at all from what Disney's done because it's been amazing and I'm a happy customer myself. 30% of their, I think, 87 million paid subscribers were Hotstar, which I think we all sort of recognize is a bit of a different service. The 87 million is closer to 60 million and our ARPU is roughly double or actually more than double. We added close to 40 million last year alone. I think when you factor in those dynamics and the fact that we're coming from a higher level of penetration globally, I think we feel very good about the performance. You took the bait. Kannan was trying to get us to chest pound some more. It meant to be provocative. It turned out to be so. I guess, a follow-up, and Greg, I guess, you're going to have a lot to say on this topic, but when you think about Disney coming in or even Discovery or all these new launches that are happening, in some ways, this expands the pie quite a bit for streaming in general, because there are also new distribution models that are being attempted. Telecom companies have started to see this as a new normal, and my guess is this will lead to all kinds of other permutations in the future. When you think about more streaming services coming out over the course of 2021, does that in some way provide an opportunity to try new distribution avenues or accelerated growth, because of the growth in streaming in some ways? Well, I think you're right. We're seeing this big macro shift and certainly, the global pandemic has accelerated that process. Really, I think, the first bit is just even that big impetus to move is to some degree a tailwind for us, because we have more and more consumers who are around the world who are aware of these services. We have more and more intention, more activity out there. We are seeking to be innovative, and constantly pushing the edges around how we can accelerate our growth, how we can improve our distribution footprint, how do we access members more and more. Also, what's really the key engine of our growth is just how do we satisfy those folks that have signed up for us, because that really is the ultimate stimulus. When they have a great experience and they talk widely about how great the service is, how amazing the titles that they're viewing there to their friends, their family, their colleagues, that's really what motivates that next round of subscribers to sign up. We'll keep pushing the edges. We seek to be innovative in that way. We'll come up with as many creative ideas we can to grow. Got it. I guess extending on that topic, you ran a couple of interesting experiments during the quarter. I think Netflix was free in India for a weekend, and in France you have tried the linear format. Could you talk a little bit about the learnings from these experiments, and are these successful enough to expand to other regions? Yeah. StreamFest in India, the primary learning, which was very evident, is that there's a lot of interest amongst consumers in India to try Netflix. We had millions of people that had access for a 48-hour period to the service. Now we go through the more difficult part of actually analyzing how that interest through this specific tactic translates into sustained incremental growth. We're still working through the details of that, and obviously, based on what we see there will inform how we think about how we leverage that tactic again or how do we improve on it, what other places we think it might be leverageable. On to your other point, I'd say Netflix members come to the service seeking to be entertained in a whole variety of ways. Sometimes they're looking for a movie or sometimes a TV show or animation or scripted or unscripted, and sometimes they show up and they're not really sure what they want to watch. We've had the opportunity to try and be innovative and try new mechanisms to sort of help our members in that particular state. There's the linear feed as one example of that. It's still unclear how that's gonna work out, we're still looking at that one. I think an even better example of that is a new feature that we've been testing and we're gonna now roll out globally because it's really working for us, where our members can basically indicate to us that they just wanna skip browsing entirely, click one button, and we'll pick a title for them just to instantly play. That's a great mechanism that's worked quite well for members in that situation. Greg, are we gonna call it "I'm feeling lucky," or are you gonna come up with something better? We're gonna come up with something better than that. Stand by for the specific verbiage you'll see when it rolls out. That's great. Greg, just following up on Asia a little bit more. You mentioned the $4 billion-$5 billion in revenues that Netflix has been able to add over the last few years. As EMEA becomes a bigger region and as your reliance on growth in that region increases, is that $4 billion-$5 billion the right way to think about revenue growth? Because of the ARPU, of course, in that region being much lower, how should we think about that framework for revenue growth going forward? Yeah. We are proud of the sustained $45 billion annual revenue growth which we think is unprecedented in the entertainment industry. Yeah. Certainly our aspirations are to do as well as we can and continue to grow that revenue. To your point, specifically what we're seeing is we have to find ways to improve the accessibility of the Netflix service, and oftentimes that means doing some trade-offs between subscriber growth at different ASPs. Really our framework for all of that and the way we assess the moves that we make and how we expand those moves and when we test how we evaluate those tests is really around that sort of revenue optimization piece. That's always the lens that we get to, and we're gonna use that to continue to try and basically fuel as much revenue growth as we can. Got it. I would just add to that, Kannan, just in this past quarter, the APAC region was the second-largest contributor to growth, you see the kind of revenue acceleration, frankly, that's happening in our business from about a $4 billion increase over the total year two years ago to about $5 billion this year. Even just in our guidance for Q1, it's, I think, 24% year-over-year. On an absolute basis, that revenue's growing. When you think about the APAC region, obviously that region's very different in terms of price sensitivity and the kind of diversity the region has, languages, and so on and so forth. When you approach that particular region, is the present model more or less the steady state of trying a mobile-only kind of a plan and then trying to upgrade people from there? Are there other things you can do, either in terms of pricing or product, to potentially accelerate that? There are 100 things that we can and we need to go do, and we know that it's really not about just one trick or one thing that'll basically make us successful in the region, but it's just constantly looking at all of the ways in which the current product experience doesn't satisfy completely our members, or members to be. You mentioned language, it's a great one, where even simple things like we're improving the ability for our members to tell us what languages they want in terms of the content when they're browsing, and there's sort of these different scenarios. There's a scenario maybe when you're by yourself, and if you're multilingual, that can result in sort of different choices. If you're in a multigenerational household, then all of a sudden that might shift how you think about what titles you want to present and what languages. That's just one small example of places where we know we can improve the product experience and be more effective in satisfying members. It goes on and on from that to the methods of payments that we know we need to expand, and we're constantly working to add more of those and make those more effective. The partnerships we have that make the service more accessible and more immediate, easier for members to find out and sign up. There's tons of things that we're looking at. Got it. Speaking of an area of overachievement instead of underachievement, Ted, 70 movies in a year. Now you guys are the industry in many ways. I think, the top five studios potentially do about 90 movies a year. You guys are doing 70 a year. At what point is this too much? How do you judge that balance? How are you juggling, or how are you evaluating the returns on this investment? It's likely more than 70. That's just what we were able to talk about in that last release and that exciting trailer. You think about how diverse people's taste are. You think about what the appetite to watch a movie is. It isn't just one a week. I think there's plenty of room to grow that. We're doing that, but much larger scale today. Thinking about movie stars like Gal Gadot and Leonardo DiCaprio and Meryl Streep, and filmmakers like Jane Campion and Adam McKay and Zack Snyder, Antoine Fuqua, making films at an enormous scale for Netflix, so that when people have an appetite to watch a movie, they can do it at home, and they can do it on the big screen, or they can do it on their phone. I just think that that evolution will continue to grow and expand well beyond a movie a week, because we're talking about serving a global audience with incredibly diverse taste. That one a week is, in many weeks it's already two or three. Some of them are hugely impactful in the region that they're created for, and some of them become very, very global. Like we saw with #Alive last year from Korea, which became a very big hit for us around the world. Mm-hmm. When you make these titles, you innovated with respect to the kind of financial model on content creation with a cost-plus kind of a structure, relative to the deficit finance models in the past, for content. When you do the kind of output that you're doing and the volumes that you're doing, is there a risk that this leads to lower returns over time? Because there is really no downside in some ways for studios to create this content on a cost-plus basis. Does it make sense at this scale versus when you were essentially doing originals as a startup? I think it does. We're seeing it scale up more than double every year, and it continuing to scale both in the scope of the projects, the ambition of the projects, and the execution of the projects. I do think the financial return, if you think about it relative on a handful of titles that wind up doing an enormous return for the studio versus the hundreds of titles that barely break even, this is a great model for producers to produce in. The fact that we can support it day in and day out at this kind of volume, and make projects that are otherwise pretty difficult to make in some cases, has been really encouraging for filmmakers just to embrace this model. Got it. Given the kind of volumes that you're doing on movies now, also because of COVID, there's been a significant shift in the release patterns for movies, not just at Netflix, but across the industry. Does this in some ways create essentially a new distribution channel for you if day-and-date releases or shorter windows become more acceptable? Does it become possible for you to essentially tap the box office with wider releases on a very short window? Does that become a new revenue stream at some point? Potentially. We've looked at this before. We've never had any issue with movies being in theaters. Our biggest issue has been that you had to commit to this very long window of exclusivity to get access to any theaters. That's been the biggest challenge. If those windows are going to collapse, and we'd have easier access to films, to show our films in theaters, I'd love to have consumers be able to make the choice between seeing it out or seeing it at home, which is becoming the norm during COVID, certainly. We'll see how much that sticks. I think that consumer behavior, human behavior, things change a lot over time. There's a very different experience associated with going out and going to the theater with strangers and seeing a movie, and it's fantastic. It's just not core to our business. Right. Got it. Hopefully with Warner Bros.' sort of COVID move, what we'll see is post-COVID, like the second half of the year. is that people both go to the theaters in significant numbers and watch their films, and they're premiered simultaneously on HBO Max. That will really set a path for simultaneous, is good for the film, helps both online and on streaming, and then also in the theaters. We have to wait to post-COVID to get a clean read of that. Yeah. What you're seeing today though, is exactly what we've been trying to do for a couple of years since we're making these films of this size. I guess the other side of this coin is, given your distribution scale now, if a studio wanted to release a movie on Netflix, this is one of the most efficient channels they can get to. Why is that not an attractive model for Netflix, either in the form of a premium VOD channel or some other distribution model, but why is that not an attractive model for you? We're not saying that it isn't, what we're saying is this one has been the most attractive model. In terms of both for consumers, and for our own business. Kannan, I think you alluded maybe to a different model, sort of a transactional kind of approach. I would say that we really believe that from a consumer orientation, the simplicity of our ad-free, no additional payments, one subscription is really, really powerful and really, really satisfying to consumers around the world. We want to keep emphasizing that. Got it. Ted, what's interesting when you challenge the people to figure out, one of the great things about the subscription model is I think it opens up for consumers to be much more adventurous about what they watch. I think you can throw out a lot of preconceived notions about what works and what doesn't, because those are mostly established by business trends, not by consumer trends. I think what happens is people say, "Hey, I don't watch foreign language television, but I've heard of this show called 'Lupin' and I'm super excited to see it, and it's included in my subscription," might push play. 10 minutes later, all of a sudden they like foreign language television. It's a really incredible evolution. Bong Joon Ho said it so beautifully at the Oscars, that audiences have to get over the one-inch wall to enjoy a whole other world of entertainment. We're seeing that at incredible scale already, by having great stories from anywhere in the world to everywhere in the world on Netflix. That one-inch wall is the subtitles, or you can watch it with dubs, or you can watch it in the original language track. Yeah. I guess when you have this kind of content volume and also the kind of movie slate that you're putting out, it also gives you a lot more pricing power. Instead of watching a movie for $10 or as a family for $30, you essentially pay for Netflix. Your pricing power implicitly goes up in this environment, because of the kind of product. We're increasing value. We're increasing the value proposition for the consumer. Every time we get another 10 minutes of watching on Netflix, you're increasing the value of that subscription. I think by increasing the options, we are also increasing the likeliness that you're going to push play, and when you do push play, you're going to love what you see. Kannan, realistically, out of home entertainment, it's just most consumers think of that differently. Just like you could cook cheaply, but people still go out to dinner. Right. They still go out, and they see that as an experience that's just different. Don't think of that as the direct, or our members don't think of that as the direct comp. What they love is for a low price, they get to watch an unlimited amount and be very experimental, back to what Ted was saying, in their taste. To try "Alice in Borderland," and to try "Lupin." All these things are kind of interconnected, to be able to create a really unique and incredible viewing experience. Okay. I guess when you think about these factors, there are two ways to think about pricing in this environment. One is when you have so much competition, and consumer wallets essentially have to be spread more widely. One way to read the environment is to say that pricing power is limited, but then on the other side of it, your share of total engagement could continue to go up and the pie itself could increase, and you have more product. Which consumers, basically that wallet is coming out of somewhere else instead of television. Which of these two dynamics should we expect to see? In other words, should pricing power accelerate or ARPU growth accelerate in the coming years, at least in the Western markets? I would say our competition set we think of as extremely broad, whether you think about it as share of wallet or share of time and attention, share of entertainment, share of delight. We feel like we have so much more room to grow. Really it's exciting to now see these sort of new dimensions of value creation for our users, like bringing a foreign language show, Lupin, Casa de Papel, shows that are now becoming global hits from countries and in languages that that's never happened before. That's super exciting to see that kind of value creation. That's really just where we stay focused. We're not trying to predict the future in that way, but just stay tightly disciplined on trying to think about what's that next incremental step where we can create more value for our members, engage them, delight them, more great content, more great product experiences. If we think we do that well, then we think our business will grow in turn. Kannan, we've been pretty cautious and will continue to be pretty cautious. Maybe Spencer Wang, can you remember, what's the last three years, what's happened with average revenue per member? What's it moved up from? Yeah. It's moved up from less than $10, so around sort of $9.90 per month, per membership, to, in the last quarter, slightly north of $11. Just bear in mind, Kannan, I think you know this, but we had significant FX headwinds over that course of time, too. We've seen that grow steadily. That's, I think, a helpful framework for you. There was 10%. Yeah, it's about 10% over three years. Yeah. Pretty cautious and it's working well for us to provide incredible value. Yeah. Maybe just another way of stating that, the cautious is just thinking about it. We do think we're an incredible entertainment value, and we want to remain incredible entertainment value. Yeah. I'd draw you back to that Christmas Day releases where we have "Bridgerton." A couple of days before that, we had "Midnight Sky," a couple of days after that we had "Cobra Kai." A couple of days after that we had "Lupin," a couple of days after that, you had "Pieces of a Woman." The numbers are in front of you. The way that people have enjoyed these series and films has been unprecedented. I think the rhythm and the pace of that has been really keeping up. I think that is the definition of consumer value. Got it. Just the recent data points, Kannan, we referenced it in the letter, but we had price increases in the U.S. in the fourth quarter. We announced in the U.K. in December, we've grown nicely through that because I think to this point, we're continuing to increase the variety and value of what we're delivering for our members. Got it. I guess on the pricing front, at a certain level, the elasticity, there's some academic research on this, but essentially elasticity seems to be a function of the price itself. Which means as you go higher and higher, when you start taking price up, potentially maybe the elasticity of demand changes. Is that something that you guys have seen yet? Are we still very far away from that point at which these factors kick in for you? If you could just talk about what you've seen so far as you've taken price up across different regions, in terms of potentially churn or cohort behavior. That might be a useful framework for us. I think rather than that academic perspective, we look at it perhaps more practically and more operationally. Really it's almost reversing it, which is that we are looking for signals and signs from our members that are telling us essentially that we have added more value. You think about engagement with the service and retention and churn characteristics, acquisition. Those are the things that we're really looking for that are key to basically saying, "Okay, we've added more value in the service. Now, it's the right time to go back to those members and ask them to pay a little bit more so that we can reinvest it and keep adding it." It's really that sort of iterative feel our way forward kind of orientation that we have. Got it. Pivoting to a slightly different topic. You guys added Strive Masiyiwa, I hope I'm pronouncing that right, to the board. Africa is not a region we've discussed in the past. Disney started creating a lot of content in the region, and obviously this board appointment is pretty interesting. Is this the next focus? How should we think about this as an opportunity? Well, Strive is a global board member. He's not coming on board to be a marketing consultant for Africa, although he does know it extremely well. He's a voice about how to build large subscription businesses, which he's done. He's enormously sophisticated of dealing with governments, which as we grow, is an increasingly important skill for us to have. Think of him as a great global advocate for us. He also knows Europe very well and the rest of the world reasonably well. I think we've been broadening our global board membership, and it's a continuation of that. Again, Africa has a ton of potential. We're doing more content there. We're growing our membership. Again, that's not Strive's role specifically. Got it. Just looking at the rest of the world, there's been a lot of small transactions. Spencer, this one might be for you, and I'm sure the others will chime in as well, but there have been a couple of streaming services in Southeast Asia, which essentially were acquired by some of the Chinese internet majors. Sony, of course, did the acquisition of Crunchyroll. There's been interesting assets which could have helped you scale potentially faster, but obviously you guys passed on it or did not really show any interest in these assets. Could you help us think through what kind of assets you guys would care about? Is it more like the Millarworld assets or why are these assets not interesting? Sure. To answer the first question, Kannan, with respect to other streaming services, our view is many people subscribe to multiple different services, acquiring another one just for their members doesn't really help us. We want to just stay focused on capturing and earning that subscription from each person organically rather than just doing some sort of M&A deal. That's point one. Point two, in terms of your other question around what are we interested in, it is largely around things that can help us bolster our core business. Which is entertainment and specifically content assets inclusive of things like intellectual property that we can hopefully turn into great TV shows and great movies. Okay. I would just add that historically we've been builders, not buyers. Years ago, I used to try to get the team to wrap their head around the potential scale of the business by saying things like, "Someday we'll be so big we'll have a VP of anime." That someday is now. We're one of the largest producers of anime in the world. You think about those kind of things now and it's like when you look at those assets, they're primarily distribution assets, not really IP assets. We've been taking the approach, like with our unscripted programming, with our anime, with our animated features, with big budget original film, we're building over a couple of years versus acquiring. Kannan, we have time for one more question, please. You got it. Spencer, sorry, Reed, I'll ask you this final question more with respect to the longer-term outlook for the business. Ted, obviously feel free to chime in as well on this one. Is there any regrets you guys have had in terms of things that you guys could have done but did not do? One instance that comes to mind is something like Roku, if it was part of the company instead of being spun out. Also, when you look at the competitive landscape, what do you perceive as the real competition? Is it streaming services, or does it come from outside, from things like Fortnite, which you've mentioned in the past as an engagement driver for consumers? Is that for me? Reed. Ted, did you have anything? I think it was directed to Spencer, so I was going to. Sorry. See how he does on this one. Oh, sorry. I could take a stab at it, then I'll pass it over to Reed or Ted. I'd say, look, as Greg mentioned earlier, we think the competitive set is incredibly large and wide. Look, I think we have a lot of work to do to continue to grow that small share of screening time that we have today to hopefully become more and more valuable to our members. I think the other part of your question was is there anything that we sort of regret. I've only been here five and a half years compared to Greg, Reed, and Ted, who have been here much, much longer. I think my window of regret is probably smaller. I don't think that there's anything that jumps out to mind right now. Spencer's regret is not joining three years earlier. When he could have. That is correct. Absolutely. No, not materially. I think it is fantastic that we've executed. If we had kept Roku inside, it's very unlikely they would've been the success that they have. What Anthony and his team have done has taken enormous energy and focus on their side. It was an enormous test for us just to become a leader in both streaming and then original programming and then global. I think we're happy for their success, but no regrets on that front. Got it. I would think with the hours and hours of joy we're bringing to hundreds of millions of people around the world, and with the return to our shareholders, it's hard to look back with much regret. Here's one for you, Kannan. We regret not buying a global license to "House of Cards" in the first deal. We had to go back and piecemeal at that extraordinary expense. That's a good note to end on, I guess. Agreed. Thank you, Kannan, and thank you to all of our shareholders, and look forward to talking to you in another quarter. Thank you. Thanks all. Thanks, guys. Happy New Year.