Game of Thrones Adds Viewers in 8th Season

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Ever feel like not taking your own advice?

I regularly admonish my readers to avoid overhyping single data points. I repeat this piece of guidance when things flop—Solo, The Lego Movie 2, NFL Ratings last season—or when they go skyhigh—most Disney movies, Netflix datecdotes.

And now a single data point—the Game of Thrones premiere is up to 17.4 million viewers—made my most important story? What?

Most Important Story of The Week – Game of Thrones Grows Its Audience

In my defense, this is more about the phenomenon than the data point: the fact that Game of Thrones has increased ratings year over year. That to me deserves a call out for the economics it implies. Let’s dig in.

The Rarity of “Mega-Hits”

I don’t have a huge data set of past TV shows and all their ratings by season year over year (yet), but based off my experience and some quick Wikipedia searching, I came up with roughly three (technically four) models for a how a series viewership changes over time. (And I saw this repeated a lot when I was analyzing viewership in my previous job.)

The most common model is to start out big and decay over time. I call this the “usual” because if a show doesn’t get an audience to start or build it quickly, well, it doesn’t make it to season 4 in the first place. I’d call this the “decay over time” model. (Again, by “common” I mean 80% of the time or more.) Here’s a great HBO example:

Boardwalk Empire Viewership

Source: Nielsen via Wikipedia

That’s from Wikipedia for Boardwalk Empire. As you can see, the huge names involved and its huge marketing as the successor to The Sopranos got it launched to a huge initial number. Then it declined over time. Looking for drama/genre examples that match this, my current example is Syfy-turned-Amazon’s The Expanse, which started at 1.2 million viewers, and its last season was about half that. I’d put Westworld in here too. (I can and have found more.)

I said “technically four” because a variation of this first model is just a series which never started out big in the first place. Specifically, it doesn’t grow or really decay. I’d call it the “stay flat over time” model. I’d put Mad Men roughly in this category or The Magicians currently on Syfy. (One of the few others fantasy series that has gone for more than four seasons, which is relevant to my Game of Thrones versus Lord of the Rings series.)

Of course, sometimes series turn out to be so good, they build an audience overtime. This is my second model, what I call the “build then decay” model. Wikipedia doesn’t have a neat chart for me to demonstrate this, but the example here is The Walking Dead. It started at 5 million viewers per episode, eventually hitting its stride at 16, 17, 14, and 17 million viewers for premieres between seasons 4 and 7. However the last two seasons have finally seen the decay at 11 and 6 million viewers respectively for the premiere episodes. So it tripled its ratings, and has since seen ratings decay over time.

Doing some quick research, The Big Bang Theory followed a roughly similar path. Starting small, comparatively to itself, and then hitting peaks, with an eventual decline. If I kept searching, I bet I could find a few more examples. This category is more common than the next type, but is still pretty rare.

Even harder, though is building an audience and not having it decay…ever. That, my friends, is the far right of my logarithmic distribution chart. In fact, I can only think of really two shows that have pulled that off. First, the king of the hill in modern TV, Game of Thrones:

GoT Viewership

That’s certainly impressive. Even better is this one other show, Breaking Bad.

Breaking Bad Viewership

I’d argue that hardly any other TV shows have had this sort of progression where they build and build, rising to 6 or 10x multiples of their initial viewership and never losing them. Especially in the post-2000s world of declining TV ratings.

Streaming Viewership: Even faster decay?

This is a particularly relevant time to look at these numbers, because my working theory is that streaming exacerbates the decays of all shows. Again, from my view of the numbers and experience. In short, streaming video accelerates the decay of viewership because of binge releasing (if you don’t like a season, you decide quicker to stop watching), the lack of set viewership time (meaning if a show isn’t working the algorithms bury it) and the “too much to watch” state of TV (meaning if a show starts losing creative steam, well you have a lot of other options). As a result, my gut says TV shows decay viewership faster than ever.

I realize, I’m not presenting any tables with an exhaustive view of how many shows fit into my four models of viewership decay and to prove this thesis. I wish I had that data, but let’s just stipulate it for now.

Streaming Business Models: The Economics of Fewer Seasons

I’d add that with increased decays, the business models of streaming mitigate against picking up additional seasons of series. In the olden days, because of the needs to fill all the slots on its prime-time slate, most TV networks put up with shows in decline. You could still sells ads during it, so even a show that is modest in the ratings makes some money and, importantly, takes up one of those primetime slots you need to fill with unique content. After enough seasons you can syndicate it and make another chunk of money, even in ratings decline.

None of that applies to streaming video.

There is no “time slot” to fill. So just having a show isn’t as important, because “time” isn’t really the factor that matters. Just content. Moreover, a streamer like Netflix doesn’t ever plan to sell something into syndication. So it has no financial upside to more seasons.

Yet, Netflix has the same financial downside. The shows tend to get more expensive as it gets into future seasons. Even on streaming. So this math starts to look pretty simple: more expensive with less viewers even faster and fewer means to monetize. A few weeks back everyone bemoaned the cancellation of One Day at A Time by Netflix. These few paragraphs could act as an explainer. If ODAAT had GoT numbers, even growth in viewers, it’d likely still be on the air. (Er, digital bits in the cloud?)

How Can We Apply This to HBO and Other Streamers?

Not to toot my own horn, but the streamers do really need their own Game of Thrones. Phrased differently, each streamer needs a show that is a “megahit”, a show so good it builds an audience season after season after season. HBO has this, and it’s monetized the hell out of it. A good chunk of the people subscribing to HBO Now/Go–either through HBO directly or through an OTT bundler or through a traditional MVPD–are likely there for Game of Thrones. They are then that much more likely to watch Crazy Rich Asians or John Oliver or Veep or True Detective and then stick around for a few months.

But GoT is done in five weeks. As AT&T turns its entire focus to streaming, HBO needs another megahit.

Netflix, honestly, needs a megahit too. Their current best candidate is Stranger Things. So I’m eagerly waiting for the season 3 launch. Are the numbers going up or down? If Netflix doesn’t tell us, I’d assume the latter. Will it get the same buzz as HBO, especially over 6 weeks?

Amazon, well they need a megahit too. They’re going all in for a few shows, but Lord of the Rings is the biggest. (I don’t think Grand Tour or Jack Ryan got them there.) Apple has a few big swings, but is a big unknown. Hulu hasn’t had a huge hit, unless The Handsmaid’s Tale is growing its audience. CBS All-Access had a good shot with Star Trek but is that growing its audience? Every broadcast and cable channel needs a megahit too, for either linear or OTT.

We’ll see who gets there first.

Data of the Week – Additional Netflix Thoughts from their Q1 2019 Earnings Report

I can’t make a Netflix earnings report my most important story of the week because it just had no real “oomph”. Especially this week. I’d call their report a “five” on the 0-10 bear to bull scale I just made up. (10 being the best earnings report imaginable; 1 being apocalypse).

Still, to quote myself from my piece up at Decider, Tuesday was one of four days each year we get numbers from Netflix. (Seriously, go read my Decider article too!) Still, it is just so little. I had a few additional thoughts that I wanted to get out here, though.

My Working Movies Hypothesis

My favorite chart I’ve made this year is trying to tie Netflix movie performance to my favorite principle, that entertainment is winner takes all. (Combined with the idea that most studios are average at making and releasing films.) Here’s that shape for Netflix, which I put up at Decider:

Count of Films by Netflix Subscribers

Since Netflix just dribbles out a few data points every year, I had to make some assumptions. Here’s the table with my assumptions, so you know where I am coming from:

Table Viewership

Really, a table is just the numbers for any chart. (I prefer charts to tables, but have met executives who are the reverse.) The key assumption is that whatever the lowest number is, Netflix would have told us. Especially any movie that was completed by over 30 million households in the first four weeks. Netflix only had two of those last quarter.

Looking at the table, I think it makes sense. The only films I think that have a plausible case for being higher are Roma—which could have been at 30 million households by now, but definitely not in first four weeks—or one of the romantic comedies from last summer.

Why not build this chart for TV series?

Well, because the 70% watching of one episode is a terrible standard for TV. Honestly, do you care if a ton of people watch episode one, and no one watches episode ten? I don’t. A lot of people checking out Umbrella Academy but not finishing it isn’t a sign of quality TV, but quality marketing.

(Though, in full-disclosure, the people who start episode 1 is somewhat correlated with people who finish the series. But it isn’t perfect.)

The Four Week Drop Off

I find it relevant that Netflix is using the four week data point consistently. Both across movies and TV series they keep saying these are their four week projections. Clearly, the bulk of a movie or TV series viewership comes in this window, otherwise they’d give us more weeks. Or adding more weeks makes the total look less impressive, which is saying the same thing.

Entertainment Strategy Guy Updates

The Writer’s Fire Their Agents

I saw a report in Variety that up to 92% of writers have fired their agents. My initial take is that this is remarkable solidarity. (And I wrote about the agents vs WGA here.) It also subverts the idea that writers need agents to find work. I keep reading/hearing stories from writers about how they had to network to find their jobs, and only senior writers really need agents. My gut is that since writer’s can keep working if they find their own jobs, the power is on their side.

Star Wars Movies Will Take a Break After Episode 9

This comes from Bob Iger, who clearly must have read my advice to slow down and focus on quality. (As I wrote here.) The other takeaway is, if you’re like me and have a financial model for the next ten years of Lucasfilm under Disney, you need to lower the number of Star Wars films expected. This will decrease the total revenue projected, and could decrease toy and merchandise sales too.

M&A Update – Sprint/T-Mobile Merger on Pause?

This was probably the best contender for “most important story” because if it doesn’t happen, well that impacts a lot of business. But it hasn’t not happened, to use a double negative. There is just a report that regulators are looking at it skeptically. But a few bribes, er hotel stays, could change this story in a few weeks. If it stands, it’s good news for customers, but bad news for Sprint and T-Mobile. (And bad news for The Vision Fund.) Let’s monitor to see if this turns into a story.

Long Read of the Week – Variety’s Brent Lang on Kevin Feige

Kevin Feige’s track record speaks for itself, but I’ll repeat: He’s one of the few, truly above average development execs. When you chart Marvel films, they dont’ look like my logarithmic distribution chart from above: they consistently have above average returns. That’s not true for all superhero movies, and at 20+ films, that’s enough sample size to say it isn’t a fluke.

The Entertainment Strategy Guy

The Entertainment Strategy Guy

Former strategy and business development guy at a major streaming company. But I like writing more than sending email, so I launched this website to share what I know.


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