Getting The Numbers On Netflix

Netflix has been a disruptive, revolutionary force in many ways, but what’s particularly interested me from a PR perspective is how it’s refused to play the old “bragging rights” game.  You know how that works: The networks deploy an army of in-house publicists to brag about their ratings, which are dutifully reported in the TV columns the next day.

To this end, we get press releases about how Show X won the week among women aged 18-24 or that Show Y finished first among the elusive male 25-34 demographic.   
None of this matters in a concrete way because networks make money on ad dollars, most of which are based on commercial ratings.  Shows don’t get a bonus for their ranking on a top 25 list.  Nevertheless, disputes over who “won” a time slot — even by a tenth of a rating point — can become bitter, with occasional calls to Nielsen to umpire disputes between networks.  This makes you wonder whether it’s business or ego driving the publicity apparatus.



Netflix, by contrast, has long disdained bragging rights.  Its executives don’t seem to care who knows how big their shows are.  They have nothing to gain by boasting about the size of their accomplishments.   They make their money by selling subscriptions, not through advertising, and have no interest in reporting numbers for individual shows.
From a PR perspective, the networks are probably glad Netflix doesn’t publicize viewing numbers, because many original Netflix shows would knock traditional television programming further down in the rankings.  

On the other hand, the networks would dearly love to know how popular their own catalogue of TV series is when leased to Netflix for streaming.  After all, 80% of Netflix viewing is leased content (old TV shows and movies). Content owners would have a stronger negotiating position if they knew how many people were actually streaming their IP backlist.  

Now Nielsen has begun to measure Netflix — right in the nick of time, too.  In a presentation last December to the media conference organizer Advertising Seminars International, Nielsen’s Brian Fuhrer reported that nearly two-thirds of all U.S. homes are capable of streaming, and that among those homes, 53% have access to Netflix, 31% have access to Amazon Prime and 13% have access to Hulu.  Within homes capable of streaming, 11% of viewing is streamed content, or subscription video on demand (SVOD).  

Clearly streaming is a major source of television viewing, not just among cord-cutters.  This would explain the declining viewership of traditional television.  And the impact would be even more obvious if video on devices was included in metrics, which is not the case now.

Nielsen has actually had the capability of measuring Netflix for years.  All it’s doing is measuring audio signatures, which is a core function of the people meter.  However, none of the networks wanted to risk retaliation from Netflix and jeopardize a revenue stream by being the first to sign up for a new SVOD-measurement service.   This meant the launch of the service had to wait until a critical mass of Netflix partners had signed up, at which point they all held hands and jumped in the pool together.

Data from the new Nielsen service confirms what we always suspected and provided a few surprises as well.  It’s completely expected that Netflix is the major source of streaming, with 43% of all streamed viewing.  But it’s a little unexpected that YouTube is second, with 12% of streamed viewing.

Nor is it a surprise that 25%  of all teen viewing is streamed, although the fact that a fifth of all viewing by 25- to 34-year-olds is streamed has to be alarming to the traditional networks, since this is a key ad demographic.   And among specific shows, it’s interesting that two-thirds of the audience for the bleak “Bojack Horseman” is male; by contrast, women constitute two-thirds of the audience for the single-mom sitcom “Fuller House.”

Nielsen’s data also confirms that bingeing is a real thing that can have an impact on the rest of the TV universe.  A massive hit like “Stranger Things” can dominate the living room TV during its premiere week and land four to five episodes in the top-20 list.  Old-timers can remember when “Roots” swept the airwaves for eight consecutive nights in 1977.  No show will ever draw audiences like that again, but hits like “Stranger Things” can clearly disrupt the rankings these days.

The Nielsen data seems to indicate that the “over the top” future predicted by media prophets has finally arrived.  Will we see the collapse of media empires?  One thing for sure is that all this great new content will have to come from somewhere.  The media world survived and even thrived after the introduction of cable; my guess is that most of the same players will still be standing 10 years from now, even with a larger mix of distribution systems.

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