Okay, thank you all for joining us. Again, I'm John Hodulik from the Media and Telecom team, and very happy to introduce our next and final speaker of the day, co-CEO Ted Sarandos from Netflix. Ted, thanks for being here. Excellent. Thanks for having me. It's like a holiday tradition. Absolutely. At UBS, yeah. Absolutely. So before we get going, Ted brought along a quick video that we're going to watch, and then we'll get into the Q&A. Here we go. Awesome. The Netflix Effect. We did it in the morning. We got everybody pumped up. Yeah, exactly. So that was a great selection of content. So why don't we dig into the content side? Sitting here at the end of this year, you guys had a great year in 2024. What are you excited about for 2025? 2024 is not even over yet. That's true. So we've got to thank you. We have had a great run this year, and we're going to end the year launching the return of our biggest show in our history, maybe the biggest show in television history, with Squid Game 2, which is following a day of NFL football for the first time on Netflix on Christmas Day. So we've got a really good way to go out with a bang for the rest of this for 2024. And in 2025, we have an embarrassment of riches. I mean, it's probably the most strong slate of programming we've had since we started doing original programming. I say that because it's unimpacted by COVID delays, unimpacted by strike and all those other things, and returning our biggest brand. So including another season of Squid Game in 2025, Stranger Things, Wednesday, which is our biggest hit from around the world, incredibly global as well. Stranger Things season four was a top five show in Japan, which is very hard for Western programming to work that way. And then we've got the returning seasons of all of our shows, Ginny & Georgia, Emily in Paris, our biggest show from 2023, The Night Agent, comes back in the year. We've got an incredible slate of movies that complement that, which would be our new Knives Out movie called Wake Up Dead Man, of Guillermo del Toro's Frankenstein, which is a total reimagination of the Frankenstein story from the master of horror storytelling, Guillermo del Toro, Back in Action. Cameron Diaz returned to the big screen with Jamie Foxx, The Electric State from the Russo Brothers. So we've got an enormous slate of programming all throughout 2025. And we'll be launching WWE live every Monday night starting in January. So we're excited. Great. So obviously, a ton of different genres, a ton of different content in different local markets. Can you talk about the sort of balance of your spending? Are there verticals where you're increasing spending and areas where you're decreasing? And what about sort of spending on sort of English language versus international? So that gets balanced out. And the one thing that's been interesting, when we started doing this, there was a strange phenomenon, which I think was mostly a business remnant, that most of the TV watching around the world was U.S. content dubbed and subtitled around the world. And we started developing our original programming years ago and doing things kind of like big premium TV shows in the local markets. I think we're better today than ever before at things that really resonate with the local market. So we spent many years focusing the team, don't try to make global content from anywhere. There's no such thing really as global storytelling in a way. Sometimes it's so good, it's mostly because it's so authentic and real. And so if you try to manufacture a global story, you really aren't serving the local audience or the global audience. So you're really making something for nobody. So in general, all of our successes that we've seen globally from our local content is because of the local authenticity. Korea, as an example, Squid Game, there's nothing watered down or Korea-light about Squid Game. It's a very straight-up Korean horror story that the world fell in love with. And so they're ready for more. I think on top of doing those kind of scripted stories, the thing that was kind of in the early goings for us is local language unscripted programming, which is quite popular outside of the United States in some markets where the majority of television watching is in kind of competition shows, game shows, talk shows, and other forms of unscripted that we're really pushing hard into. Had incredible success this year out of Korea with Culinary Class Wars and Physical: 100, which kind of creates almost a new genre of unscripted television in Korea. And those shows have been so successful around the world that we'll be launching spinoff brands or formats of that show all over the world on Netflix. Do you try to balance your spending for where you see the most opportunity for subscriber growth? Like if you're underpenetrated in Asia-Pac, do you think, okay, we got to make sure we've got sort of the four quadrants of content? Yeah, it's very much just working on what if we're underpenetrated somewhere, why? So is it a financial problem? Is it a content and programming problem? Is it a technology problem? Or some mix of all those things. So the main thing is you've got to have an audience that is hungry for entertainment, that you can have a product that's presented to them that fits with their economic reality, and then programming that they can't live without. So as long as we can do all those things well, and it's in different parts of the world are all in different stages of that, since it's hard to believe that we're under 10% of total television time, even in our most mature markets. So our percentage of total viewing has got a ton of runway to grow. With that, I think our fandom and our membership and our revenue and our profits all grow accordingly. Yeah, I think we're all sort of U.S.-centric here, and we see that Nielsen Gauge and see it at under 10%. But that's the case everywhere in all your major markets. Yes, correct. So what would lead you to sort of move ahead more meaningfully in terms of content spend or pull back? I mean, what are the things that the dials sort of that you're looking that sort of guide that spend? The thing that drives more content spend is more revenue. So basically, we find that we've had a really effective virtuous cycle of if we add enough value to the member, every once in a while we can come to them and ask for a little more to fund the next cycle, the next cycle of content improvement. That, to me, is the thing that will grow that: more members, more revenue, more content spend. Today, I think we've done really well at how we spend the money. Our goal is to spend the next $1 billion better than anyone else can spend the next $1 billion. I mean that by finding the things that matter most to viewers and fans, the things that they really love. So I talk about our North Star, the thing that we focus every employee at Netflix on. And we just had our company meeting with 14,000 people to tell them that everyone's goal is that we've got to make the programming better and better and better. And when I mean that, I don't mean win more awards and get good reviews. That's nice too. But what I mean is to make the programming that people really love and talk about that generates that Netflix Effect that we were just talking about. The flywheel that we talk about, it's not as obvious as seeing something play out in a theme park, but it is every bit as real and tangible. And you see that in consumer sales. You see that in what people are posting about. You see that in events that we can fill up. I think you can see that in things like the big live events like we didn't even have the ability to do just a few years ago that we are doing regularly today. It becomes the center of conversation. That's why for us, that is as core as anything we do is we got to make content that people love about, love it. We have to make it so great that they want to talk about it, which kind of creates a FOMO effect around the world. If you do it really, really well, you get richly rewarded from fans. The Netflix Effect is, I think, a sort of relatively new issue. There are a number of ways you're already doing it, but do we think we're in sort of the early days of monetizing that, of whether it's through events or, like you said, consumer products, or what are the ways that you see this evolving over time? The main way we monetize it is in deepened fandom for the product itself so that when the next season's coming, you can only see it on Netflix. And so for me, that's the main monetization model is to make it more valuable through a sale of a T-shirt or you go to the West End right now, we have a stage show that is the origin story of the Upside Down called The First Shadow. It's a very successful show. It's been sold out for nearly a year. It's coming to Broadway for folks who live in New York. And you'll see what I mean about that when you see that. Now, there's monetization there, but really the value of that is this kind of generational love of the brand of Stranger Things. And that's how that really gets played. We look back at the Netflix Effect on things that sometimes we have nothing to do with the monetization of, but definitely the deep fandom has paid off. In the case of Queen's Gambit, where the 100-year-old company that makes chessboards in Spain was going bankrupt and their business went off the charts. Now, we didn't get any of that money, but Netflix and Queen's Gambit is only on Netflix. So the ability to see this thing that drove the passion for chess all the way back to Netflix is that's how you really monetize. Makes sense. So maybe let's turn to sports. I should say too, along those lines, is this year we're going to be launching two Netflix Houses, which is kind of a maturing of our traveling event strategy, which is we've done over 70 traveling events like the Stranger Things and Upside Down experiences and these kind of things that travel city to city around the world, and this is our launch of Netflix Houses, a 100,000 sq ft experience that is immersive retail, food, and ticketed events that all happen underneath one roof that we're kind of experimenting with this year, so we're really excited about that. Where are those? Dallas and King of Prussia. Okay. The King of Prussia Mall, probably. Yes, very close. Very close. Yeah. So let's pivot to sports. First, give us your take on the Jake Paul, Mike Tyson fight. How'd that go for you? Off the charts. I told the team afterwards because we have the most brilliant engineers on the planet, and I will tell you, they beat themselves up for every little glitch that happened that night, but the truth of it is, at the end of that thing, that's all that was left was imagination and what's next. In such excitement, off the charts. Now, we hate to disappoint a member for one second, so yes, there was some of that, but the real thing is we had an enormous live audience, 108 million people watching live. You'd have to go back to the 1980s to get a live audience that big that wasn't a Super Bowl. It's really phenomenal. It's a Super Bowl-like audience that we were able to draw for this fight. This is a combination of our content team recognizing that this was going to be a thing, our marketing and publicity teams and our social media teams and everybody making it a thing that you were not going to miss no matter where you were in the world, and then the tech teams that were able to deliver it, and they really made a show of it. I got to tell you, it was some combination of sports and circus, which was that people really needed to see, but I hear all these great stories of people, if someone went to their kid's high school football game on Friday night and everyone in the stands is watching the fight on their phones instead of their kid playing football. So there was all that kind of thing that was going on that really required expertise across every function that we have that all just fired on every cylinder. So it's just the must-seeness of it was phenomenal. And then the delivery of it was also, I mean, I think if you think about the number of devices on that night, we were stressing our own technology. We were pushing every ISP in the world right to the limits of their own capacity. We were stressing the limits of the internet itself that night. So we had a control room up in Silicon Valley that was re-engineering the entire internet to keep it up during this fight because of the unprecedented demand that was happening. So the largest streaming event in history, I'd say one of the largest live audience in almost 50 years or 40 years. People really had an incredible time. People loved it and talked about it in every way. The underlying thing that gets lost in there too is this was a five-and-a-half-hour streaming event. The first undercard fight had about 30 million people watching it. The Taylor-Serrano fight, though, was the most viewed professional women's sporting event in history. About almost 50 million people watching that fight going into it. About 74 million around the world, 50 million in the U.S., about 74 million around the world watching that fight. That is a lot. A lot of records were set that night for a company that we basically broke down during the Love Is Blind reunion about a year and a half before that. That's a lot of positive trajectory in a very short amount of time. So does it increase your interest in live events or maybe combat sports in particular? And then what I find fascinating about the whole thing is you guys created this event. It wasn't like, I mean, we'll get to NFL, but it wasn't like, okay, you released the NFL thing. You guys sort of invented this, put it together, and it became, like you said, the biggest live event in streaming history. I mean, I say even the production that you saw on television, the way it was put together was all, again, our teams doing that, which we're really thrilled with, and think about it, what we're really interested in is big live events. These are big live events that happen to be sports. Like Christmas Day football is a big live event within the football season. This boxing event, it's a boxing event, but it's a big live event, but it could be the Tom Brady roast, which is a comedy event, or when Chris Rock decides to finally tell his story on what happened at the Oscars, it was Selective Outrage and it was live on Netflix, so to me, it's like we're really excited about the opportunity to get people very excited about coming together and watching something and talking about it. I think those moments are rare and very, very valuable. That's why we're kind of leaning into it. I don't think a season of league sports, the economic challenges aside, every one of those nights is not necessarily an event. Really, I want to focus the live complexity and the live excitement on things that are truly events. Can your number of live events sort of ramp from here? Like if you have your crystal ball, like we look out three to five years, do you see Netflix doing a lot more live events and not just ones that are based in the U.S., but sort of take that globally and do ones that are important for different regions? Right now, our focus is on doing them from the U.S. and there big events in that way because the technology is still building. We want to make it so turnkey that we could do local for local streaming as well. But right now, it's really focused on big scale events. But we'd like to do, we're going to do more frequently. WWE is going to be live every Monday night, so starting in January. We have John Mulaney, which is going to be a live show that's going to also run next year. But we also think that there's plenty of others to do that will be upcoming. Makes sense. And then NFL football, keep in mind, I think that day, not only have two great games, we have the Beyoncé halftime show. And it's going to feel like you're watching, like it is Christmas Day. So we'll be aware that it is Christmas Day, the show and the broadcast itself and all the entertainment that's wrapped around it will all be very special and very unique and I think bigger than the game itself. Got it. So what does the NFL games and WWE starting in January, what does it do to your ad business? Obviously, with sports, especially given the natural breaks in the game, sort of comes advertising. So do you expect it to sort of kick your advertising business into a new gear? Yeah. Look, I think there's a lot of demand. I mean, both games are sold out, so we're really excited about that. And I feel like there is an emotional and somewhat irrational attraction to live for advertisers. It makes sense really because I do think people remember the events that they watch versus kind of the day-to-day what they're paying attention, what they're watching and paying attention to. And so there's an outsized desire to be there. And there's a built-in scarcity with sports that drives CPMs and advertiser interest. So I think when you can have something that is, by the way, we severely undersold that fight. If we knew the audience was going to be that big, we probably would have done a lot more selling on that fight. But I do think that our ability to monetize those events is very high. So just finishing up on sports, what type of additional sports properties would make sense for you? And I think in the past you've talked about getting, obviously, you have global reach. So sports that resonate globally, but just any thoughts? Look, I think what every sports league wants is their audience to be more global and younger. They want to ensure the longevity of the sport by introducing new generations to the sport itself. And remember, there's so many distractions now in people's lives that the fact that they follow sports the way they do or a sport the way they do is something that you're constantly being challenged by every other thing that's trying to pull on your attention from gaming to social media and everything else, movies and TV, everything. So for them to be able to reach a younger audience and to reach a global audience, it's of interest to every league. They understand what our business is and our model is, and they are very excited to kind of create more bespoke products. They don't have to come from within their leagues necessarily, but it's a nice one. I think NFL Christmas Day is a good example of that. And so I don't, but I don't know there's any one that we're saying that we wanted to get that one. But something that's special, something that's unique and eventizable, we can make an event of it and it can be global and the audience will be much broader than they get achieved anywhere else. I kind of feel that WWE fits that mold a bit, right? Global, younger, but also big events, right? Yeah. I mean, honestly, that is a big event every week, and the idea that people, all these years that WWE has been on television, very successful, good example about the kind of X factor that is Netflix. We did a press day to kind of introduce the press to the sport because the press didn't pay much attention to the sport until it got to Netflix, so basically we had a huge attendance of reporters from all over the world who were learning what this game is about, so to me, I think that's the first step of the X factor that is Netflix for that sport, and people will see that applied. And what excited us about WWE at the beginning, it's the inverse of Formula One, which is it was very well distributed in the U.S. and very little known outside of the U.S., whereas when we got into before Drive to Survive, Formula One was barely watched in the U.S. And now obviously it's incredible, live events and ratings have gone up manyfold. So I feel like we have the ability to do that with WWE. Blow it up outside of the U.S. We get a bigger audience for it in the U.S. and blow it up outside of the U.S. Yeah. Outside of sports. We also like it because for a sport, it also has a 40-person writer room, so it's much closer to our core wheelhouse of creating and storytelling. Makes sense. So maybe we'll talk about engagement. So outside of sports, what are the opportunities you think to the biggest sort of pockets of engagement that you can tap into that maybe you haven't penetrated yet and to drive engagement? What kind of content or what areas do you think that you need to invest more into driving engagement? Yeah. Look, we said before, I think the mix of local to global programming, I think gets much more intense. We've got right now in Latin America, we launched Senna from Brazil that is going to be a very big hit for us in Brazil, obviously, but it'll be watched by Formula One fans around the world. It'll certainly play pan-regionally in Latin America. We also have One Hundred Years of Solitude, which is an enormous book out of Colombia that had a very big global following. We were very excited about that. So our ability to do event programming this way from everywhere in the world for anywhere in the world, that continues to be a big focus of the business, and then focusing on event films and event series, so I talked about all this in 2025. We've got all of these returning shows. And in some cases, it's their finale. So we've got the finale of Stranger Things. It'll be the finale of Squid Game in 2025. And I look at those things, well, it begs the question, well, what do you got coming up then if you're going to come back? And we've got incredible stuff coming up, like The Four Seasons, which is Tina Fey and Steve Carell based on the movie, but it's a series based on that film. And we've got Kate Hudson and this really fun show called Running Point. That's a comedy set in the world of NBA basketball. And we have a Zero Day with Robert De Niro. So we've got a big slate on its heels. And the idea is we want our people to understand that what we do on Netflix is a different level of ambition than typical television or typical premium television. So when you see these things that come across like The Electric State and making a Russo Brothers movie for Netflix is the same ambition as making a global tentpole film. We want them to use all the storytelling skills that they have. We give them the resources they need to do that. And we give them the most important part, which is the gigantic audience reach. We have 600 million watchers of Netflix. And they're typically watching about. We got 200 billion hours of watching last year. So the idea that we can bring when people are ready to watch, that they are ready to watch on Netflix and that we can deliver that audience for them. Gotcha. Let's talk a little bit about subscriber growth. With the 2025 guide, you suggested about that more than half of the 11%-13% revenue growth that you would see next year would come from subscriber growth, suggesting another very healthy year of subscriber growth. I think that was a major concern coming out of password sharing. People are thinking, okay, maybe it would slow down. You guys aren't going to divulge the subscriber growth every quarter. Where's the next layer of sort of subscriber growth coming from? Maybe from a regional or demographic scale. Look, we're at 280 million at our last announcement. And we've got, which gets a little less than half of the total addressable market. If you use the kind of television as kind of the total addressable market. So we've got plenty of room to grow members around the world. So we did 16% growth in member base in the US and EMEA and 19% in APAC and almost 10% in Latin America. And so I think that, again, we're seeing that kind of uniform growth, which tells us that we're doing a lot of things right in a lot of places. And we just have to keep doing more of it. Right. Maybe on the. Back to that 10% number, you think about where that's coming from. It's like even though we've got plenty of room to grow the member base itself and plenty of room to grow engagement of the member base itself. And then on the heels of that, the monetization of it. Exactly. And we'll get to that. From a pricing standpoint, with the paid sharing initiative fully rolled out, how should we think about the cadence of price increases going forward? Similarly, which is the underlying philosophy, we have to prove value first. So when engagement is happening and we're adding a lot of value to our members with sometimes live events, but just kind of in the day in, day out, two hours a day they're spending with us, how much do they value that? So you start seeing it in your ability to come back and ask for more. You can't do that if we don't do those things right. That's why I'm saying that those 14,000 people who work for Netflix are in service of doing that right all the time. Do these live events, are we going to see them, I should probably do the math myself, but move the needle from an engagement standpoint, like the fight and then the football games? You're going to get tens of millions of viewers on the. Yeah, it's tough to tell because there's so much watching. So a couple of hours of streaming in a year of 200 billion hours is tough to see. But again, all hours are not created equal. So those are quite valuable hours. Right. Maybe shifting to advertising, which has been a big topic of discussion, of course, for Netflix. You recently announced you have 70 million monthly active users on the ad tier. Is the size of the audience at this point still the biggest barrier to scaling the advertising business? I had to tell you, when we got into this, the thing I was most concerned about was that piece, which was we've counterpositioned against advertising almost since the existence of our brand. I had no concern that we'd build technology to do a really great job of audience matching. That's all we do every day. But I think that part of it was how we were going to position it with our members in a way that would say, this is an opportunity for those people who want a lower price and don't mind advertising to have another choice to another entry point into Netflix. I think that to me is like at 70 million. We've grown about 35% quarter on quarter in terms of the growth of that MAU, which gives us the ability to get to critical mass, which we think we will in 2025 in all of our ad markets to where we can then be relevant to advertisers. So growing that, I've been so proud of the team and their ability to grow that addressable audience and grow supply. And now that we've done that, then we've got to continue to move into monetizing it better. Yeah. And you're putting together the other pieces of the puzzle as well. So how will the new programmatic deals and adding tech in-house help drive the business on that? So we launched our own tech in Canada this past quarter, and we're going to roll that out in all the ad markets in 2025. We've got incredible partnerships with Trade Desk and Google to kind of work up all those things. And again, this is multiple things that we're doing at the same time, developing our own tech, building our own ad team, better integration with others, with programmatic sellers. So those things are, we have said this over and over again that we're crawl, walk, run in this, but we're crawling faster. But we're in the crawl. Yeah. And I do think, like I said, getting that building supply and then capitalizing on the demand. That's the key. That's where we're running. And to do that, it goes all the way back to that first one again. You got to have programming that people care about and advertisers want to be next to. The real value in this is I want my brand associated with that thing that people love and keep talking about. I think you guys said that the business will scale in 2025, but maybe 2026, 2027. I mean, is that the sort of time frame when we could maybe move from the crawl stage to the walk stage? I don't know if you've laid it out yet, but can we get to the walk? I think the ad stage is, it's a meaningful revenue contributor. It'd be kind of in that post-2025 stage. Yeah. Gotcha. And how large of a business over time do you expect the ad-supported business to be? Maybe over, say, a five-year period. That's the big question. I mean, again, I think we've got to continue to grow both businesses. So basically, it's up to the consumer if they want the service without ads and they pay X, or if they want it with ads, they pay Y. And we want to be able to monetize those in a way that is generally growing the business in total. So that to me, it's how big that's going to be. It could be a small percentage, a larger percentage. The North Star is growing total revenue. A couple more on advertising. Do you expect the product, obviously you have great demographics, mix of live events, highest quality content in the industry. Do you expect that over time that you'll command, and you may be now the highest CPMs in the industry, maybe within CTV, but also as we look at sort of broadcast and cable, how do you expect CPMs to evolve over time? Yeah. Look, I think the core is the scarcity that comes from being really great at the storytelling piece. Yesterday, we were the most nominated at the Golden Globes across film and television. So to me, there's an opportunity there. If you want to see the best stuff on TV, you got to have Netflix. And then if you want to be part of that, for advertisers want to be there too. So I do think that there's no reason to believe we couldn't be at the high end of the premium CPMs with our programming. You talked about the launch of the ad server in Canada. Any early reads there or any sort of new data points you could share? Or is it ready for prime time to roll out to the rest of the world? Nothing really to share, but just no material problems either. That's what most of the world says, but that's what we're looking at is trying to roll this out problem-free, and it's been pretty problem-free. Great. One question that we get in terms of the ad business is the sort of amount of investment required. So not just on a technology standpoint, but you have to hire Salesforce to sell ads. Obviously, you've got your programmatic partners. But is that a sort of meaningful number as we look into sort of 2025 and 2026? I know you've got the guidance out there for sort of 100 basis points in margin, but does the sort of spend on building the ad business change that equation? Look, that's included. So when we did the 2025 guide, that includes investing in live games and ads, which I think are all meaningful investments into kind of the future growth in the business. And we think it's kind of the right trade-off with the current margin guidance we've given, which is expanding margin by one percentage point on a pretty oversized 2024. Massive 2024. Yeah. I mean, massively up. There's a lot of people that think that you guys gave guidance for 2024 and you sort of massively beat it, that the same dynamic could play again in 2025, and I think some of the drivers were like FX and other issues, but I guess you're not going to change the 100 basis points. Okay. Maybe turn to the competition. How do you see the competitive landscape evolving now that streaming has sort of begun to mature? And I guess this is a question that'll lead us to sort of the industry itself, but what do you think sort of the next steps are in the streaming landscape? I think we're at a very unique and special time in the business where we're growing. The sector is growing. Everything that we do in terms of the business, in terms of film and television, games and ad-supported watching is a growing industry, and our competitors are circling the wagons a little bit and cutting a lot, so when I look at this, I like where we're at right now. I like where we sit for 2024, 2025, and the foreseeable future from there because all of those competitive dynamics are out there. It's going to be a competitive marketplace because it's a big business, and we've never expected it not to be very competitive. But what's interesting, and we've got old media players who are kind of trying to figure out their migration from linear still and who are cutting their way to profitability in a way that is making their products, I don't think, more competitive, that's for sure. And then we have kind of the tech players who are trying to, we're juggling what the motivation is for what they're doing and how good can they get at it. So Amazon and Apple, they have plenty of money and plenty of patience. So they'll still be out there. And we've got, so it's a very competitive landscape, not just among those kind of consistent players, but also just for time and attention. YouTube and TikTok and everyone else is kind of, they're all trying to get the same thing, which is entertainment attention. And eventually, how do you monetize it? And we so far have been quite good at doing that against both traditional media and tech competitors and new forms of entertainment as well, which has actually been additive to our business. If you saw in the Netflix [sizzle] video, how much of that was fans trying to express their fandom, which actually works as a promotional tool for us. So you have like 400-500 million people doing Wednesday TikTok dances, which does nothing but make Wednesday bigger. So yes, they did spend a few seconds watching it on TikTok, but it was actually made Wednesday a much bigger show. So I think about trying to figure out how do you not just compete with folks, but then eventually co-opt their spaces to make your spaces better and bigger. Right. And a lot of people now, a big theme of the event here the last couple of days has been just the changes from the new administration. And there's a lot of belief both on the telecom side, but on the media side, that it could usher in another sort of wave of consolidation in the media space. And how do you think of that? Would that be good or bad for Netflix sort of at a high level? And then also, is there an opportunity for Netflix to, I mean, obviously most of the growth has been organic. I mean, but is it something? We're a better builder than buyers. I mean, historically, we've been buyers of IP here and there in small pockets, but not big company, but better builders, I think, and I don't know that the consolidation changes the competitive landscape that much because it's the same programming basically that we're competing with every day in different models or different revenue models for other folks, which tend to be, when companies get together, they're not to do that to charge more. They're likely doing it to try to charge a little less, which I think continues the economic stress as long as they're still navigating their legacy media businesses. Right. And another sort of way. To answer your question differently, I've done all the kind of what about one plus one equals five in that landscape, and I can't find one of those scenarios. I don't think. Right. Got it. Another way that some of the DTC, which is a very fragmented market, and you see it in the Nielsen Gauge data, have looked to compete in the absence of sort of structural consolidation is bundling, DTC bundling. And it seemed like that was a theme of the conference here the last couple of days. I mean, how does that change the competitive landscape? Does a Warner Bros., Disney+ bundle or others that are being discussed, does that make it more or less competitive for you guys? I think for all those guys, it's a churn tool for them. And we have really, really, really low churn. So for us, I don't think we need to have a more exotic offer. We just have to continue to entertain. Right. Makes sense. Getting back to the margin issues, again, not going to ask for a change in guidance, but you have had a nice, outsized cadence in 2024, more improvement, and another 100 basis points expected in 2025. How should we expect sort of the cadence? And you guys pulled back from the guidance for sort of the steady state improvement, but what should we think of sort of the margins going forward, because I think a lot of the value creation you've seen is just that massive increase in margins over the last 10 years. Just how do you think of long-term sort of margin? It is on the long, that is the long-term trajectory, which is to continue to grow top line at healthy rates and expand margin. So it's on the long, it's on the plan, medium and long-term. Right. But you're not going to give us a target number here. Okay. All right. Just a couple other topics. We had Doug Shapiro in here last session talking about AI. How do you guys think of AI in terms of how it affects your business, how it affects just the business of Hollywood in general? I wish I had saw that session. I think it's interesting because there's tools, I think, that are going to help all kinds of creative endeavors. There's some really tangible ones in pre and post-production today that really produce interesting results, things that are kind of really very task-oriented that they could do faster. What I've not seen yet is how AI is going to make things better, and to me, I would say it's way more valuable. I would take a 10% better over 50% cheaper all day, so if the tool can actually help make things better at some point, that's great, but for the most part, I think the way it will make things better is it'll strengthen creators to do their jobs better. Kind of like an engineer today, because it'd be very tough to get a job if you don't know how to use Code Assist, which is basically an AI for, so I look at that as different. Every kind of creative endeavor will be aided in some form by some kind of AI tool. But I think the idea that it becomes more than a creator's tool and becomes the creative tool, that's pretty unlikely, I think. I think about all the different iterations of production innovation, like even digital cameras, that was an enormous leap forward. I think about things like CG animation over hand-drawn animation, which today animation employs way more people than it used to. Back when it used to be a very laborious hand-drawn thing. So, to me, it's like the business can get better and bigger as long as it actually creates a new aesthetic or a new form of storytelling that people really love. And to me, that's the goal. First and foremost, there's a lot of tools that we use throughout the business. I think AI will play a big role in improving choosing the things that you're going to pick to watch. We've been using machine learning for years to do just that. And this will accelerate and improve the results of that. That's fantastic. You're talking about discovery in the UI. Discovery in the UI. Like right now, we've got this, we keep adding more content and more choice for our fans, which they love. But along the way, you've got to make sure the UI makes it possible for people to find all this new great stuff. So we're in the middle right now rolling out kind of our first redesign of our UI in 10 years. It's called Eclipse. And we've seen really great results from it already, which helps aid discovery, gives more real-time predictions and real-time suggestions for members. And the take rates and the success rates of those hits are growing. So we're really excited about that. Has that been rolled out or is that in the process? It seems like the UI is really hard. I mean, whether it's Disney or Warner Bros. or it seems like all the digital companies that we talk to are spending a lot of money to try to get where you are, and you're investing to sort of get to the next level. I think most of them discounted how important it was at the beginning and paid a price for that. I do think that that's very. It's really important to basically harness the internet to do things that retail couldn't do. Being able to, but personalization was the key to it. I always think that the core to our brand is that people always think like, what is their content brand and what is it trying to be? I think the core to the Netflix brand has always been personalization. So it's been in our DNA from the beginning. So the better and better we are at personalization, the better we are at serving our members. So it was very core for us. So just two more questions for me. Video games. Where are you in that process? It's an initiative you started up a couple of years ago. How has that played out? And is it where you want to be? And is it having the impact on engagement and churn that you hope to? Yeah, it's early. It's very early, and right now, there's a lot of friction points in how people play the games, but at the end of the day, if you make the game that people really want to play, they get over all the early friction points and play the games and love it, so we've had some good positive signals on things like the Grand Theft Auto or Oxenfree, our own original game that people really, really loved, and right now, we're about to launch Squid Game, and it's launching right alongside of the show, so it's a great synergy for fans, and it plays into something where I think our long-term vision for the value that games can add to members is, A, it's a $140 billion business that people are spending on gaming today. So if we can be a relevant part of that gaming time with those members, they'll apply that value to the subscription. The other part of that is that we've got fandom that we can really feed. So imagine you're a hardcore Squid Game fan and you can't wait for the next season of Squid Game. And you've already watched all these episodes. And you've gone back and you watched them again. Now you can go in and play the game and put yourself in the show, more or less. And so that kind of sense of agency that gaming and user-generated video has kind of created for young people, they can find that in our show. And a Netflix show can be different than a show anywhere else in the world because of this element of it being alive between seasons or between sequels of movies. Your ability to customize or your ability to introduce a new plot line or a new character or to test out characters with super fans. I just think that in general, it's going to play a really interwoven and integral part of our storytelling model because people will value it more than they would have without it. So should we expect a Wednesday video game and maybe a Bridgerton? I mean, do we expect a Bridgerton? Right now, you can play Virgin River Christmas and you can play Too Hot to Handle and Love Is Blind. All these games, there are many of these games that are tied to the IP that people, and in fact, even it's very small numbers still, so you squint to look at it, but there are people who played the Too Hot to Handle game that then went back and watched the show that had never watched the show. So it was a super positive sign from a pretty small base of users, and the fact that certain games actually play better in certain countries than others, so for some reason, the folks in France really loved that game, and it drove watching of Too Hot to Handle in France in a big way, so we're super excited about the potential for it all. Still very early days. We have a new head of our game division, Alain, who's really kind of reconceptualizing and rethinking through a bunch of things right now. So it's in the typical way that when we do new things, we iterate and try to get it right. And sometimes we take several passes at it and we're in that mode now. Got it. Sounds good. All right, last question. We talked a lot about content. We saw the video. What is the one piece of content that you are most excited for in 2025? What do you think has the biggest potential to blow up next year? This is my least favorite question. It's like, which one of your kids do you really love the most? I would look at it and say, like I said, I think 2025 is a crazy embarrassment of riches. I think the finale of Stranger Things is so good. It leans into the very emotional connection people have. Remember, we grew up with these kids. I've known Millie since she was 11 years old. To see this cast and this step, it's an incredibly emotional experience. If you haven't watched one through the previous seasons in a while, you might want to catch up. It does exactly what you want a finale to do. That, I think, is going to be very hard to beat. Squid Game is the biggest show in our history. It's going to be having its finale also in 2025. Then you also have Wednesday, which is its first time back. So some combination of those three. And we're really excited. From an artistic standpoint, I'm super excited about Guillermo del Toro's Frankenstein. What he did with Pinocchio, to me, was like take this classic story and reinvent it in a way that only he could, rewarded with the Academy Award for Best Animated Feature for that. And I think that fans of Guillermo, fans of horror, fans of Frankenstein and the classic monsters are going to be blown away. Jacob Elordi plays the monster Frankenstein. Oscar Isaac playing Dr. Frankenstein and this playing him the way that you can imagine like a rock star scientist would have been played. It's just really incredible. We got to look at the first cut of it a couple of days ago. It's a lot of really great stuff coming. Sounds like it's going to be an exciting year. It's going to be a big year. Thanks for being here. Appreciate it. Thank you.