It’s always a pinch weird diving into a Streaming Ratings Report after a Netflix Earnings report. (If you want my thoughts, check out these two Twitter threads here or here.) It’s so tempting to try to tie what we learn from this week’s reports to the broad takeaways from Netflix’s latest results.
Like most things, there isn’t one factor that goes into whether or not Netflix had a good quarter, though it used to be mostly determined by whether or not they grew subscribers. In the U.S. and Canada this quarter, they lost 1.3 million subscribers (about 900K short of my prediction) driven by their price increase. But that was offset by the release of Stranger Things, Netflix’s biggest English language series. How much did Stranger Things offset churn? Did The Umbrella Academy, The Lincoln Lawyer and Ozark help too?
We can’t know. Nor will we ever know. That said, I think I have one chart that shows that Netflix—on the TV side at least—had a strong finish to the quarter, so that had to have some impact.
But first on the film side, we have two of the most interesting data points we’ve gotten this year, and possible answers to one of the biggest questions of the streaming wars.
(Reminder: The streaming ratings report focuses on the U.S. market and compiles data from Nielsen’s weekly top ten viewership ranks, TV Time trend data, company datecdotes, and Netflix hours viewed data, Netflix Top Ten lists, Google Trends, Samba TV, and IMDb to determine the most popular content. While most data points are current, Nielsen’s data covers the weeks of June 20th to June 26th.)
Film
It’s worth pointing out that, with only about two years of U.S. viewership data, we only really know a few things about film viewership on streaming:
– If a film is a big hit on Netflix, it gets between 20 and 30 million hours when it debuts.
– Most films then see a drop off over the next few weeks.
– Some kids titles do even better than that, and don’t decay as quickly, with high rewatch in weeks two and beyond.
– Prime Video and Disney+ films seem to have a lower ceiling, on average of about 75% of the Netflix top films.
That’s all we know for sure. It’s not much. We have more questions than answers. Do theatrical releases help or hurt streaming releases? Does it matter if those films are big hits in theaters or just so-so? How long should a studio wait before putting a film on its streamer?
(I mean I know some of these answers, but I can’t prove it with the available data. Yet.)
You might be thinking, “But what about all those theatrical films that arrived on Disney+ last year, including Black Widow, The Eternals, Encanto and Shang-Chi and the Legend of the Ten Rings?” Those are useful data points, sure, but those theatrical releases were still hampered by a big Covid-19. It’s unclear which, if any, of those titles were hits. Even though we have entered the third year of the “streaming ratings era”, two years of that data has a big asterisk.
So it’s complicated! Oh so complicated.
Fortunately, we just got two data points that go a long way to answering some of our questions. Not far enough because, say it with me, small sample sizes are small! Still these two data points are probably the best representations of true theatrical releases on streaming.
– Doctor Strange Into the Theatrical Profitverse (Just Dr. Strange 2 for the rest of this article.) netted 23.8 million hours for Disney+, the second best week one debut out of all the streamers in 2022.
– Sing 2 netted 21.1 million hours for Netflix, fourth best this year.
That’s two films that got over 20 million hours in the same week. The last time that happened was also a Netflix/Disney+ split, with The Adam Project and Turning Red. Here are the top ten films released in 2022 so far:
Just so I’m not cherry-picking data, here’s the same look for all films released since March 2020, expanded to a top 20, divided into first run and early/Pay-1.
Can we draw some lessons from these two big debuts? Maybe.
Sing 2
Sing 2 did an incredible 21.1 million hours on Netflix, which as the chart shows, trails only one other Netflix film this year, The Adam Project, and bested Hustle. No wonder Netflix likes their Pay-1 deal with Universal!
But really think about what this means. This film was in theaters seven months ago. It’s been on the home entertainment charts as well, as tracked by The-Numbers, for 17 weeks, meaning it was one of the most purchased titles for in America. It’s made $10 million in just DVD/Blu-Ray sales too.
In fact, it’s done so well on video-on-demand (VOD or TVOD for transactional video on demand) it made the Nielsen streaming rankings for 2 weeks (this was probably accidental as Nielsen tries to filter out TVOD viewing):
And did any of that slowdown its eventual Netflix release? Not that I can see!
This film really resets expectations for theatrical titles on streaming (even after a robust PVOD and DVD sales windows). If a film that only had $162 million at the box office can be one of Netflix’s top films, then you wonder what other theatrical titles would do. Now, this title does have some caveats.
– First, Covid-19 likely kept some families from seeing it in December due to worries about Omicron. (Not that that stopped the Spider-Man 3: Into the Profitverse fans…)
– Second, Illumination has a strong track record, and this was preexisting IP, giving it a huge leg up.
– Third, both Sing 2 and Doctor Strange 2 were released on Wednesday, which gave them two extra days to accumulate viewership. (Most first run streaming films are released on Fridays.)
– Fourth, this is a kids title so more unique households probably saw Hustle than Sing 2, for example.
And we should compare kids titles to kids titles on Netflix. Oh, you want me to do that. Okay…
In a few weeks, we’ll get data for The Sea Beast, which looks to be Netflix’s biggest original kids title of the year, and that will provide a fantastic comp for Sing 2. But so far, with just this one data point, theatrical animated titles can have a strong second life on streaming.
Doctor Strange Into the Theatrical Profitverse
So, it’s just one data point but…the theatrical release didn’t hurt Sing 2. What about the much more popular Dr. Strange 2? It earned $411 million at the domestic box office. (And another $543 million overseas sans Russia and China, but again we’re America-focused in this report.)
So, presumably everyone saw it in theaters who wanted to see it, right? Right?
The rest of this post is for paid subscribers of the Streaming Ratings Report, so if you want to find out what we know about streaming vs. theatrical, how well Kevin Hart’s new film The Man From Toronto, Disney+’s Rise, and The Umbrella Academy did, along with the flops of the week, and more, please subscribe.
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