Netflix Streaming Success Not Just From Top Shows: Analyst
- by Wayne Friedman , December 18, 2023
Premium streaming financial success requires a lot of different kind of TV/movie content -- not just a top-ten list or the most-viewed shows, according to one media-company focused stock-market research analyst.
Looking at Netflix, the dominant and consistently profitable premium streamer, MoffettNathanson Research says “63% [two-thirds] of viewership was driven by titles neither in the top 100 nor in the bottom 10,000.”
This analysis comes in response to Netflix's six-month research release last week, in which it said 99% of all viewing came from 18,000 titles, with nearly 100 billion hours viewed.
MoffettNathanson adds that 10 titles drove 8% of all viewership in the first half of 2023, and 100 titles drove 33%. “But we were more struck with the relative diffuseness of the rest of the platform... This more or less confirms what we saw in Nielsen’s U.S.-specific data: Streaming requires a lot of content.”
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MoffettNathanson went on to calculate that in the first half of 2023, a total of 93.46 million total hours were viewed -- from 242 million global subscribers. That means the average Netflix subscriber is watching about 2.1 hours of programming per day.
All this helps streamers conquer the dreaded problem of "churn" -- the process where subscribers depart a streamer platform, perhaps signing back on later on when their favorite TV shows start up again.
“While the average American household may have once watched TV eight hours a day, capturing more than two hours of every subscribing household’s day is likely enough value delivered to minimize churn.”
Very interesting Wayne.
There is another way ti interpret that data.
For example the 1-10 Titles racked up 7,1 billion hours. That means that the average 1-10 Title racks up 710 million hours. Very impressive. Here is the table of the average hours per Title Band.
* The 1-10 Titles average 710 million hours
* The 11-100 Titles average 253.3 million hours
* The 101-500 Titles average 11.9 million hours
* The 501-15,019 Titles average 0.4 million hours
Now the ranking for average hours per individual titles are:
* 1-10 Title's average hours - 72.8%
* 11-100 Title's average hours - 26.0%
* 101-500 Title's average hours - 1.2%
* 501 - 15,019 Title's average hours - 0.0%
Same data viewed in a different way. Quite different stories.
Wayne, if the average Netflix "subscriber" is viewing 2.1 hours of Netflix content per day---as stated by the analyst---that implies that Netflix, somehow, knows who in each household is watching whenever its content is on-screen. But that can't be. In reality, all that Netflix knows is that a device was activated and that one of its shows---or movies---was played on that screen for a certain number of minutes. If an average viewer-per-set figure was applied---say about 1.2 - 1.4 viewers-per-set---which is slightly higher than the linear TV norm---and an average Netflix home had 2.7-2.8 residents---also slightly above the norm----then the average resident in a Netflix home watched only 45-50% of the time---or about one hour of Netflix content per day--- not 2.1 hours. Once again, this seems like a case of confusing set usage with viewing. You can't have the latter withour the former---but except for single resident households, the two metrics do not have a one for one relationship.