Netflix: Down for the Count?

Netflix has traditionally been tight-lipped about its viewership, refusing to share data and blasting third-party services that seek to estimate how popular Netflix programs really are.

But last year, when the subscription streaming pioneer — and longtime champ — found out it would soon be getting some high-profile competition, there all of a sudden came a break in this reticence. Netflix began dishing out some pretty impressive (if ambiguous) numbers, beginning in January 2019 when the service, in its fourth-quarter 2018 earnings report, claimed its original movie Bird Box, with Sandra Bullock, reached 80 million member households in its first four weeks of availability.

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Since then, we’ve received a steady parade of boastful viewership claims from Netflix, particularly as the November launch dates for Apple TV+ and Disney+ drew closer.

Now, Netflix is changing the rules to present itself in an even more favorable light. In a Jan. 21 letter to shareholders, the steaming service announced that it has changed the way it counts views — from 70% of a movie or TV show’s length to two minutes.

Two minutes — 120 seconds.

Netflix’s rationale: Two minutes is “long enough to indicate the choice was intentional.”

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From the letter: “Given that we now have titles with widely varying lengths – from short episodes (e.g. ‘Special’ at around 15 minutes) to long films (e.g. The Highwaymen at 132 minutes), we believe that reporting households viewing a title based on 70% of a single episode of a series or of an entire film, which we have been doing, makes less sense. We are now reporting on households (accounts) that chose to watch a given title. Our new methodology is similar to the BBC iPlayer in their rankings based on ‘requests’ for the title; ‘most popular’ articles on the New York Times, which include those who opened the articles; and YouTube view counts. This way, short and long titles are treated equally, leveling the playing field for all types of our content including interactive content, which has no fixed length. The new metric is about 35% higher on average than the prior metric. For example, 45 million member households chose to watch Our Planet under the new metric vs. 33 million under the prior metric.”

Huh?

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As one observer put it, “It’s laughable and essentially discredits Netflix’s viewership data. That an official viewer is now based on a minimum of 120 seconds is ridiculous. Netflix is feeling the competitive heat – and parading viewership of original programming has become a marketing tool.”

Our studio friends should take note. With the transactional business under fire and now accounting for just 37% of consumer home entertainment spending, maybe it’s time the studios changed the metrics, as well.

Why bother with good, solid data, like how much consumers spent to buy or rent a movie or TV show, either digitally or on disc?

They should move to a liberally defined “viewership” model as well. Count how many different people watch a DVD, Blu-ray Disc, digital copy or stream that’s brought into the home – mom, dad, sis, Junior. So what if they only watch a minute or two – that counts! So do trailers.

All of a sudden, that single movie purchase mushrooms into 14 or 15 views, maybe more.

And just think of the headlines that would generate: “Parasite Sets New Home Entertainment Record, with 20 Million Views on Day One.”

Once again, Netflix, you’re on the eve of disruption.

See the complete letter here

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