Netflix Co-CEO Ted Sarandos Wants More Fans Wearing ‘Stranger Things’ T-Shirts

Netflix's consumer products and experiences business is growing. Could that mean a theme park in the future?

Ted Sarandos speaks with hands clasped in front of a Netflix sign.
Ted Sarandos said Netflix is continuing to grow its consumer products business. Getty Images for Netflix

Netflix (NFLX)’s subscription service is its main money-maker, but it also has ambitions to build out its consumer products business, Netflix co-CEO Ted Sarandos said in a conference call after the company reported earnings yesterday (April 18).

“We are really looking for those opportunities to help fans connect with their favorite shows, their favorite films, their favorite talent by wearing the shirt or carrying the notebook and other ways that people really like to express their fandom,” he said. The intention is to “build fandom in a way that can drive revenue,” but also strengthen its core subscription business, he said.

Netflix sells merchandise for hit shows like Outer Banks and Wednesday. It also hosts live Bridgerton and Stranger Things experiences, where consumers engage with performers in an immersive show based on the storylines of popular series. The company’s subscriber total exceeds those of its competitors, including Disney (DIS)+ and HBO Max, but it lacks the consumer products and experiences that other streaming platforms offer.

Disney has a cruise line and 12 theme parks around the world that draw consumers into its business. Warner Bros. Discovery (WBD), which owns HBO Max, has capitalized on its Harry Potter intellectual property to produce a Broadway show, a video game and the Wizarding World of Harry Potter theme park, which it partnered with Universal Resorts to create.

Netflix wants its own Star Wars and Harry Potter franchises

Fandom is what drives Netflix’s consumer products business, Sarandos said. But the company only began creating original content in 2012. It doesn’t have the decade-spanning fandoms—like Harry Potter, Disney’s Star Wars and Disney’s Marvel—that its competitors do.

“Disney will always be able to monetize a subscriber better,” said Paul Hardart, director of the entertainment, media and technology program at New York University’s business school. When Disney produces popular content, it can continue to sell it through amusement rides, themed restaurants and other experiences. But there is still opportunity for Netflix, he said. “Netflix is remarkable at innovating,” he said.

Netflix appears to be expanding its franchises through acquisitions, similar to how Disney purchased Pixar, Marvel and Lucasfilm, maker of Star Wars. In 2021, Netflix bought the Roald Dahl Story Company, known for Matilda and Charlie and the Chocolate Factory. Last year, the streaming platform released a musical based on Matilda, and it is developing two series based on Charlie and the Chocolate Factory. Netflix also bought the rights to create two sequels to Knives Out after the first movie resonated with murder mystery fans.

The company is thinking long-term, said Hardart. Right now, products and experiences are ancillary to Netflix’s main business and the company will stay focused on building and retaining subscribers. But once it has stable and recurrent revenue, a Netflix theme park isn’t out of the question, he said.

“I guarantee you some eager-eyed employee in the Netflix building has business proposals for a theme park and Broadway show,” he said. Netflix’s live, traveling Bridgerton and Stranger Things pop-up shows are the first iteration of a theme park, he said. The company already has a relationship with 233 million paying subscribers and the data on where they are located, so it could likely build a park successfully, he said.

The obstacle it will face, he said, is keeping the attention of consumers as it competes with social media, sports and video games.

Netflix Co-CEO Ted Sarandos Wants More Fans Wearing ‘Stranger Things’ T-Shirts