Netflix’s Ted Sarandos calls on rivals to release ‘transparent’ data
It’s good to be king.
Ted Sarandos, co-CEO of Netflix, has an industry-leading paid subscriber base of nearly 280 million worldwide. This week, Sarandos spoke at the Fast Company Innovation Festival in New York and on Thursday previewed Netflix’s latest massive data dump – the semi-annual “Engagement Report” showing views and total watch hours for 99% of the content on the platform.
In total, Netflix customers streamed 94 billion hours of programming in the first half of 2024. That’s just a hair above the 93 billion a year earlier, but it’s still an increase. “I don’t think we can be more transparent than this,” Sarandos said at the conference. “I hope the other people in the company will follow suit.”
Well, no joke. Sarandos would like to see Prime Video, Hulu, Disney+, Max or any other streamer release numbers that reveal virtually all of their users’ viewing figures – because it would expose just how big the gap is between Netflix and anyone else.
Please note that Netflix’s semi-annual ‘Engagement Report’, which was first released for the second half of 2023, and the Top 10 lists are based on self-reported data that has not been verified by a third party. But independent Nielsen data (although it only covers the US) regularly shows that Netflix’s share of total TV viewing is at least twice that of its next closest rival, Amazon’s Prime Video.
Here is Nielsen’s estimate for August 2024, projected from the TV household measurement panels (including internet-connected TVs). Even with a 39% increase in NBCU’s Peacock share, Netflix remained the subscription video leader by a significant margin thanks to the 2024 Paris Olympics:
Other streamers, such as Warner Bros. Discovery’s Max and Disney’s Hulu, have taken over the most-watched lists, like Netflix. But no one else is likely to cause a massive viewing gap like Netflix has; there is simply no benefit. Until now, Netflix rivals have selectively released viewership figures to tout the performance of popular titles (for example, Amazon’s claim that the “Fallout” series attracted 65 million viewers in its first 16 days on Prime Video).
In the meantime, remember that Sarandos was against releasing such detailed data before he was in favor of it. When we discussed Netflix’s Q3 2023 earnings last October, he said this: “When we started creating original programming, our creators felt like they were pretty trapped in this kind of world of nightly ratings and weekend box office draws that defined their successes and failures.” But, he added, Netflix was “leading in terms of viewing data in the Top 10 and expected the industry to become “increasingly transparent.”
Two months later, Sarandos happily announced Netflix’s first major data drop, which included licensed titles for the first time. One of the driving forces was the SAG-AFTRA and WGA strikes, with proper access to audience data being a key negotiating issue. “This is probably more information than you need,” Sarandos told reporters, “but I think it creates a better environment for the guilds, for us, for the producers, for creators and for the press.”
During the Fast Company event, Sarandos delved deeper into Netflix’s thinking. The “Engagement Report” is “kind of an answer to people who said, ‘Hey, I don’t really get to see how my stuff is doing.’ And I agree that this was unfair,” Sarandos said.
However, it is clear that a key reason why Netflix felt comfortable opening up as a snapshot of its wealth of Big Data was to demonstrate its vast reach and commitment. With its primacy in the marketplace, Netflix has set the model for compensating filmmakers and talent that produces its original programming. “We depend on each other. We need great storytellers,” Sarandos said. “My goal is for them all to become rich and famous… if they do their job really well, they will.”
Netflix’s most-watched TV shows in the first half of 2024: ‘Fool Me Once,’ ‘Bridgerton,’ ‘Baby Reindeer’
According to Sarandos, the company pre-negotiates the value of content deals for a TV show or movie based on “how we think it will perform” and “pays it accordingly.” That is better for the makers, he argued, because “the risk shifts to us.” He continued: What about the “Titanic” phenomenon, when “there is a huge advantage”? “It’s so rare,” Sarandos said, before claiming that “in many cases we pay as if that happens every time.”
“Any time there is change,” Sarandos said, “people feel uncomfortable.”
As for YouTube, which supposedly represents Netflix’s main rival in the streaming wars, Sarandos pointed out that the two companies have very different business models and curate very different types of content. He said that YouTube is indeed a great outlet for Netflix’s trailers. “Together we get 20% of all ratings,” he said at the Fast Company conference. “What I do is go after the 80% that are not on us or YouTube.”
During his FC talk, Sarandos also recalled Netflix’s famous 2010 diss by Time Warner CEO Jeff Bewkes. “It’s a bit like the question: will the Albanian army take over the world? I don’t think so,” Bewkes said in an interview interview with the New York Times. (The barb has long rankled the Netflix crew: In 2013, after the company became the first streaming platform to land major Emmy nominations, co-founder Reed Hastings posted Facebook: “Albania goes a step further.”)
Sarandos said Bewkes’ sharp comment “really served as fuel” to motivate Netflix to win. “There’s nothing that sets a team on fire like the name ‘Albanian Army,’” he chuckled.
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