A few months ago I briefly tried to explain the distinction between “customers” and “views” to help explain why Twitch is often over-hyped. Since I’ve spent a lot of the last two weeks banging my head against the Twitter wall insisting that we stop letting Netflix use misleading data, it seems time to break out that explanation into its own post.
To see the need for this, let’s look at a handful of recent Netflix announcements. They provide a case study for how a service can use multiple metrics that all kind of mean the same thing but all don’t. Worse, a lot of the journalism covering these reports mix up the different words. In 2018, at some point, Netflix has said…
In those four datecdotes, we have, really, three different concepts: streams, hours and customers. The key is understanding how they all interact so we don’t use them haphazardly or misleadingly. If this explanation comes across as obvious, well apologies in advance. But as I think about it, I didn’t know it before I worked at a streaming video company, did I? Nope, and I spent a lot to time explaining to senior leadership what our numbers did and didn’t mean.
So let’s get started at the smallest level.
The Starting Point: An entry in a database
To understand where all the streaming numbers come from, you first have to understand that every data point for a streaming video company comes from somewhere. That somewhere is a single entry in a database.
Yeah, it seems obvious, but worth mentioning. There is a database that holds the record of every customer’s every interaction with Netflix, Hulu, Amazon, CBS All-Access, Showtime, DC Universe and Youtube. And any new streaming service down the road. That’s where all the data comes from. A massive database that tracks every interaction.
The key is that lowest level, “the interaction”. The specific details around the record will differ by company and for different reasons. But the general broad strokes are the same. These interactions are then complied and collated and analyzed to develop all the other advanced metrics.
A Sample Entry Explained
The best way to visualize an interaction is to see a sample. So let’s see what a sample database entry looks like. This way you can understand the specific pieces of knowledge the companies can track. It starts with the “Five W’s” (who, what, when, where) and builds out from there. (The “why” is the key to good decision-making, and simple statistics can’t tell you that.)
An entry is generated when you—the user—clicks on a show or movie to watch on a streaming platform. That something can be a movie, TV show, trailer, commercial or whatever. Or piece of music for a streaming service. But the click via mouse click, remote control tap, voice command or finger tap starts the process.
Let’s just go through each piece. Start with the “who”. Every customer is tracked by some sort of customer ID number. This means that it tracks everything related to one account. I called this a “customer”, but you could call it users or customer accounts. Notably, it could be different than a “profile”, which Netflix has. (And if you have a “kids” section, then you are subject to COPPA regulations, and shouldn’t track identifying data, a different issue.)