Category: Visual of the Week

Nielsen’s New Top 30 Streaming Video Ratings…Explained! Plus a Visual of the Week

Starting last August, Nielsen began releasing a weekly American top 10 most watched list for streaming video. I’ve been using it ever since. Nielsen mixed together TV and movies, and new (“originals”), second-run and library (“acquired”) on the same list. 

In their year-end top ten list, though, Nielsen flipped the script and provided three different top ten lists. Formatting mine, with hours instead of minutes:

IMAGE 1 - Nielsen Top 10 2020

This was a sign of things to come. Starting with the week of Monday, December 28th, Nielsen is now publishing three top ten lists, one for “original” TV series, one for “licensed” TV series, and one for film. 

(Man that’s a lot of definitions. In the future, I’ll define them all. But for now, this article from 2019 has a good explanation of the definitions I use to analyze content.)

Whenever a firm changes their data definitions, I tend to get extra cautious doing analysis. For example, when Netflix went from calling a view “2 minutes watched” from “70% viewed” a lot of folks continued as if nothing had changed in the numbers. This violates the number one rule of data analysis: keeping things apples-to-apples. (My solution was to convert all the numbers to the same metric, using Netlfix’s average 35% inflation between the two numbers.)

That’s a worry here. Unless Nielsen provides me with an expanded database going back through 2020, most of our data will now be cleaved into “2020 Top Ten” data and “2021 Top 10×3” data. Thus any analysis of 2020 to 2021 data will need to factor in that it may not be “apples-to-apples”.

But…

…this is still great news.

Here is the the synthesized Nielsen top ten list for the last two weeks of Nielsen data, if Nielsen had continued the old methodology:

IMAGE 2 - Top TenIMAGE 3 - Top Ten

Now, we can compare this to the new, combined top 30 lists:

IMAGE 4 - Top 30 List

IMAGE 5 - Top 30In other words, that’s a lot more data to parse! More data means more analysis! More analysis means more insights!

Previously, any of the data from The Mandalorian on down in the week of December 28th and all the titles from The Crown from January 4th would have been invisible to us. Moreover, we can confidently say that this list is a clear top 23 list one week and a top 21 list the next. (Basically, anything above the first “10” on the list by logic is in order.) 

Overall, this expansion should greatly help our understanding of how content is performing in the streaming wars:

– Previously, original films on Netflix and Disney all dropped off the Top 10 list after two weeks. This will allow us to track film decay with greater fidelity. (For example, The Midnight Sky would have only had one week of data before.)
– We’ll also get more films on the list, being able to clarify which films underperform their openings more often. (For example, We Can Be Heroes made the list.)
– This will also let us track TV series decay as well. As we’ve written before, four of the ten top spots in this list were usually held by licensed second-run and library content on Netflix. This essentially gives us 10 or more original titles to review each week. (For example, The Mandalorian would have dropped off the week of December 28th. The Crown would have dropped off the week after.)
– More spots should potentially allow more non-Netflix series and films on the list. This will allow us to compare performance trends between the streamers as well. Right now, Disney+ and Prime Video shows dropped off after a week or two. This will enable to track their decay as well.

For example, in the past Soul would have just eked out staying on this list. (The first film to make the top ten for three weeks in a row.) But The Midnight Sky (72 million global 2 minute views, Netflix revealed in their earnings report) would have dropped off. Same with We Can Be Heroes (53 million global 2 min views) would never have made the list. Now I can make this chart:

IMAGE 6 - Feature Film Decay

Interestingly, all the films featured big drops in viewership (44% for We Can Be Heroes and 56% for The Midnight Sky), but Soul didn’t see its big drop until week two to three (61%).

As a reminder, Nielsen doesn’t track HBO Max data yet, so we don’t know how Wonder Woman 1984 fared in its second week.

Visual of the Week – Netflix Films Do Much Better Weekly; Disney+ Films Do Better All Year

When Nielsen only released a single top ten list, films only made the list when they were newly released, such as Mulan, Borat’s Subsequent Moviefilm and Netflix’s regular releases. As such, when Nielsen released a cumulative top ten list for film in 2020, the results were very skewed towards Disney’s rewatchable films:

IMAGE 7 - Nielsen Top Ten FilmWhen we look at the weekly rankings of movies, the Disney dominance isn’t quite as strong:

IMAGE 8 Various Top TenWith a now weekly top ten list, we’ll be able to get a different perspective on the competition between Disney and Netflix for, frankly, kids viewership. Some insights:

– Kids programming still dominates the film list. For this week, 11 of the top 20 are targeted at kids. And one is a teen comedy. (17 Again)
– Netflix does better in a weekly top ten, due to their size. Indeed, this shows that the split between Disney+ and Netflix is much closer in kids content than it seems. However, Diseny+ does seem to still be winning.
Rango was misidentified as being on Prime Video. It is currently on Netflix exclusively in the US. Nielsen has confirmed this.
– That said, it does look like Amazon did get one genuine film on the list with Catch Me if You Can. It’s their only entry in the three top ten lists for the last two weeks.
– Interestingly, like original TV, Netflix’s films are skewed towards new releases. Of the 13 Netflix films on the list the last two weeks, only 1 was released before December 25th, which was The Croods. Thus we can see that whereas Disney+ sustains interest in their small library of kids content, Netflix relies on recent releases, even on licensed kid content.

Has Netflix Lost Ground Since the Pandemic? Using Reelgood’s Share of Streaming Data to Find Out – Visual of the Week

Yesterday, I speculated that Netflix had a weak summer for content, and until the end of December, this may have caused it’s usage to slip. This was driven by the Nielsen weekly data, which hit a peak in March, and then in the middle of November. Yet, I can’t show that since I don’t actually have Netflix’s monthly usage data.

But other firm’s data can act as a proxy. Like Reelgood, a company that helps users find their favorite shows and films. (In full disclosure, Reelgood provides me their data on a regular basis and I am friendly with this firm.) Two of their charts in particular stuck out to me, both in their “quarterly streaming” reports. What I did was combine them into one. And voila, my visual of the week:

IMAGE 2 - Usage by Streamer

And here it is in table form:

IMAGE 3 - Table

Some quick thoughts/insights:

– Reelgood claims 2 million users, but doesn’t clarify the demographic break down of those users. (It’s a question on my to do list to ask.) So that could skew these results. Though by no mean does it skew them enough that I won’t use their data.

– Also, given how their platform operates, I wouldn’t be surprised if it skews “adults” since kids more often just turn on a given streamer and watch the same shows. So this probably doesn’t capture all usage.

– That said, their usage for Netflix is within the margin of error for Nielsen’s Q2 results, which had it at 34%. Comscore has shown similar numbers too.

– As such, that decline feels bad! Or to use biz jargon “sub-optimal”. I don’t think Netflix is really achieving the same usage as Prime Video, but clearly they didn’t gain in Q3 and Q4 usage.

– Disney being flat with The Mandalorian is also a sign that they need a stream of hits to drive usage up across the board. 

– This is also another data point that the Wonder Woman 1984 experiment worked to drive usage up. 

You Won’t Believe How Many DVDs Frozen II Sold Last Year – Physical Disc Sales in the US in 2019/2020: Visual of the Week

Every so often, as I pull data for a given article or to make a point, I come across a database that’s worth exploring further. (Which is why I created the “visual of the week” feature!) For example, in 2018 I stumbled across The-Number’s home entertainment data for the United States. More specifically, the number of physical discs still sold to people in the US. (Both DVDs and Blu-Rays will be called DVDs in this article, but are both “physical discs”n.)

I’ve since used this data for various projects over the last year or so. Once, when I was trying to figure out how many DVDs Game of Thrones sold during the course of its lifetime. (A lot!) I’ve since used it to look at various blockbusters to refine my film finance model. Recently, I’ve been looking at Christmas movies. (Next week!)

This isn’t some esoteric data point, though. In 2020 Covid-19 made home entertainment the only window available. Then, Warner Bros smashed the theatrical window altogether. Thus, importance of this aging technology to film financing couldn’t be more important. We’ve all know we’re trading “physical dollars” for “digital pennies”, but what does that mean in practice, as opposed to slogans? Specifically, what are the numbers that implies?

So that’s the quick topic for the day. As always, the 5Ws of the data:

What – Physical disc sales in US (by unit and total revenue)
What – Top 100 shows or films, by units sold.
Where – In the United States
When – 1-Jan-2010 to 15-Nov-2020
When (time period) – Annually
How (did I get it) – The-Numbers.com
How (is it measured) – Survey of customers and estimated total sales

That resulted in a data set of 821 films across 11 years. Here’s the top line result of the top 20 physical disc sales for 2019 and 2020:

IMAGE 1 - Top 20

(All data in millions of dollars.)

To answer my headline, Frozen II sold 3.6 million physical discs in the United States, leading the pack for any film or TV series this year. Avengers: Endgame won 2019, with 4.8 million sales for $104 million dollars. (And Frozen II could catch Avengers, since they year hasn’t ended and my data set for 2020 only goes through mid-2020.)

Let’s run through some fun insights, though with this dataset:

– People still buy DVDs. Again, even in an age of streaming, when folks could sign up to Disney+, 3 million families in the US alone bought a DVD for Frozen II instead of watching it there.

– DVD sales aren’t films only. TV has always had a spot on the list. Here’s a rough categorization of how film sales looked in the last two years or so:

IMAGE 2 - Categorization

– Yes, that’s right, in the United States with just physical discs, the big studios sold $2.4 billion dollars worth of discs. Yes, studios don’t keep that whole price, but that’s still a lot of extra money for each film. (Say about 40% of the price, or $10 for a film.) And this just physical home entertainment, a shrinking market. Electronic sales are now a much bigger piece of the pie. (That I don’t have similar revenue estimates for…) So each of these films could add about 8-10% more revenue to their total revenue. When this market decays to nothing, that revenue likely goes with it.

– If you’re wondering if box office predicts home entertainment sales, they absolutely do. Box office is about 89% correlated with home entertainment sales. Here’s what that means in practice:

IMAGE 3 - Scatterplot

– Yes, this is a shrinking market. It’s declined by 62% over the last decade. (Since 2020 is in progress, we don’t know how it will ultimately fare yet.) Here’s how the top 100 films fared over the last decade (up through 2019, since we have full data):

IMAGE 4 - Decline by Year

– And yes, this market is also logarithmically distributed. Thousands of films sell less than a million units a year, whereas Avengers: Endgame sold over a $100 million dollars.

IMAGE 5 - Log Scale

The Top Four Licensed Shows on Netflix Account for 6% of Netflix’s Viewing in the US – Visual of the Week

In 2020, Netflix lost the rights to Friends. In 2021, they lose the rights to The Office. How much do those big shows impact viewing on Netflix? 

Quantifying that via Netflix’s data is fairly hard, though, since they focus overwhelmingly on their original series, as that’s the key to “building a moat” in the eyes of shareholders. Fortunately, Nielsen is now tracking consumption in the United States. Which means we have one third party firm who can help us answer the question.

Today’s visual answers this question:

How have the top four licensed shows on Netflix done this year?

Here’s the “Data Ws” to answer how I calculated this:

Who – Streaming customers
What – Total hours viewed (Nielsen million minutes divided by 60)
What (platform) – Any service
Where – In the United States
When – From week starting March 9th to Nov 2nd 2020, minus March 23rd
When (time period) – Measured Monday to Sunday.
How (did I get it) – Nielsen provided weekly top ten.

Here’s the answer in visual form:

IMAGE 1 - Chart of Top 4

However, we need context. As in, what does this mean? Well, to start, here’s the total viewing over the 34 weeks I have data for. And you can see what a big percentage of this top ten viewing this makes up.

Screen Shot 2020-12-08 at 2.00.59 PM

To quote Shawshank, if you’ve come this far, Red, maybe you’ll go a bit further. And that is really asking this question, “Hey, EntStrategyGuy, does this matter in terms of all Netflix’s viewing? Nielsen doesn’t provide that, do they?”

No, but Netflix has!

In two different earnings reports, Netflix reported that they make up about 100 million hours of viewing per day in the US. (In the 2018 end of year report and again in 2019.) Let’s make some scenarios to cover our bases. First, we could assume Netflix has grown somewhat during Coronavirus. That’s the high case, and I’ll use Nielsen’s estimate of 44% growth from this year for that. But Netflix could have been cherry picking their 10 million hours per day number too, so I’ll use the lower estimate of 6% of all viewing Nielsen estimated in Q1. That gives us this range:

Screen Shot 2020-12-08 at 2.01.32 PM

Is 6% a lot of content to lose? I’d say yes, and we don’t know how losing Friends impacted them because we don’t have the data. The good news is Grey’s Anatomy isn’t going anywhere as long as it stays on the air. The bad news is The Office is gone this month. (I’m not sure for NCIS or Criminal Minds.)

One bonus insight: Folks may be tempted to say that the higher viewership of licensed shows happens during times when content is weak. This actually isn’t true. Netflix’s highest viewership of originals actually peaked this year in March, according to Nielsen, and licensed shows saw higher numbers during that time period. 

(Sign up for my newsletter to get all my writings and my favorite entertainment business picks from the last 2 weeks or so. Next edition goes out tomorrow.)

Why Most Netflix Subscriber Charts No Longer Include the US Only Numbers – Visual of the Week

This week’s “visual of the week” is a simple one: the number of Netflix subscribers in the United States over time. (You should know the top line number from my chart last week.)

One of my goals with this series isn’t to make all brand new charts, but update some of the best visuals. Last year, one of my best articles was showing how many subscribers Netflix has had over time. The challenge? Netflix changes definitions all the time on us. Meaning making an “apples-to-apples” chart is fairly difficult. This is why most US subscriber charts start around 2012, because that’s when Netflix started separating US streaming subscribers from DVD subscribers. (Technically they provided the 2011 numbers, but for some reason most subscriber counts couldn’t find that 2011 data comparison.)

Earlier this year, Netflix changed definitions again. They combined US and Canadian subscribers to make UCAN. So going forward, we won’t see many “US only” charts since most outlets don’t publish estimates. But I do. Since US subscribers are about 90.3% of UCAN subscribers, I use that to estimate.

Here is the update for Netflix subscriber definitions in the US over time:

NFLX Subscribers by Type

And in chart form.

NFLX Subscribers Over Time

Quick Thoughts

– In other words, every different color in the chart above is when Netflix has changed definitions. Last year, my goal was to find total subscribers, including paying DVD subscribers.

– As for forecasting, in Q3 of last year, I though Netflix would end the year with about 60.1 subscribers and they ended up with 61 million streaming only. Earlier in the year, I’d estimated 60 million subscribers, and I ended up being fairly close (off by about 1.6%). (Notably, my back of the envelope calculation that the price increase was needed to offset cash flow losses hit the 61 million on the head.)

– My other big prediction is that Netflix maxes out at about 70 million total subscribers in the US. So far we’re on track for that, but the Covid-19 lockdowns threw off all the timing. Mainly because Covid-19 pulled forward a lot of subscribers. Which will make 2021 fascinating to see if Netflix continues to add US customers, or if it slows down. (Already Netflix is seeing quarterly fluctuations in the US/UCAN numbers, with three quarters less than 500K adds and one quarter losing US subscribers last year.)

– As for the end of this year, Netflix is currently at 73.1 million UCAN subscribers and my hot take is that I think they stay at about that level for the end of Q4. I could easily be wrong, but it seems safer to predict flat growth with Netflix more than it does high growth. 

– If you’re new to the Entertainment Strategy Guy, these three articles on Netflix are much deeper dives into how I gathered and calculated these Netflix numbers.

Jan 2019 “Prediction Time: Forecasting the Effect of Netflix’s Price Increase on US Subscribers”

Sep 2019 “Why I Think Netflix Will End Up with 70 Million US Subscribers: Applying Bass Diffusion To The Streaming Wars

Oct 2019 “Why Most Netflix Charts Start in 2012: A History of Netflix Subscribers”

Netflix Has as Many Subscribers as Disney+ and Prime Video Put Together In the United States – Visual of the Week

Let me tell you a pet peeve of mine. It’s folks citing how many Amazon Prime Video subscribers Amazon has. 

Because they don’t know.

What you know, or have been told once, is how many Amazon Prime subscribers there are. With Prime comes access to Prime Video. We don’t know how many members actually use that service or, more importantly, know how many value the service enough to pay for it on a recurring basis. (What a subscription is, by definition.)

But here’s what’s crazier: we don’t even know how many Amazon Prime subscribers there are by country. They could have 50 million US Prime members…or 125 million. Literally no one knows. (In fact, we haven’t gotten an update on Prime membership since January.)

This is indicative of a larger phenomenon of the “streaming wars”. The streamers have barely told us how well they are doing. By my estimates, only 4 of the 12 biggest streamers have shared actual US subscriber numbers! (Hulu, ESPN+, HBO Max and Starz)

That’s right, due to non-disclosure, global-only numbers, or definitional craziness, we really can’t compare the streamers to each other in the United States.

Well no more!

I’ve decided to fix this glaring mistake. What I’m going to do is provide the EntStrategyGuy Definitive Estimate for all the major streamers US subscriber base. Today, I’ll provide my table, chart and some notes, then tomorrow I’ll provide the longer, gory details. First, here’s the chart:

Chart - US Paid Streaming SubscribersAnd the table, which I’ll explain tomorrow:

Screen Shot 2020-11-18 at 9.03.01 AM

About That Headline

If the internet weren’t a cesspool of clickbait, I could have just explained what this article is, “My estimate of US subscribers for the streamers.” But that doesn’t get the clicks. A flashy headline on Netflix? That does.

Tomorrow, like I will say multiple times, is where I’ll really provide insights into this process and data. For now, though, if you have one takeaway, it should be that the streaming wars are messy. They are filled with nuance. The more that someone online pushes a simplistic narrative (Netflix has already won; Disney+ will kill Netflix; TV is dead) the less you should listen. There are no simple narratives.

So my headline is 100% true, and building this chart makes that clear. When it comes to one single streamer in the United States, Netflix is about twice as far ahead as its nearest competitors. Really, they are in the first tier by themselves. Then there is a second tier of services with about 35 million subscribers (Disney+, Hulu, HBO Max and Prime Video). Then a third tier of folks trying to break into that second tier (Apple, Peacock, Starz, CBS, Showtime, maybe AMC+). 

Yet, this look is in many ways a backwards looking view. The three oldest services happen to be the three biggest. The difficulty is forecasting what comes next. If we’re looking at growth, Netflix at the top was flat last quarter and down earlier in the year. And likely would have stayed that way all year in America except for Covid. Meanwhile, can the new streamers add subscribers? I think they can.

At least now, we/I have a common fact set to evaluate the United States performance of the streamers.

Quick FAQs

– What about global? I’m just focusing on the United States since many of these streamers are US-only. And we have the best data for this country. As the streaming wars continue, though, I’ll do a similar look for worldwide. (Though comparing global numbers to US only numbers is not a good method to do that.)

– How did you get that Amazon number? It’s an estimate of an estimate of an estimate, which makes it a guess. I’ll explain tomorrow.

– Why didn’t “smaller streamer TBD” make the list? I set the cut off at roughly 2 million subscribers. Anything smaller would have made the chart difficult to read. Again, I’ll explain my rules tomorrow.

– What if you disagree? Well, tomorrow I’ll explain how I calculated each one, so if you want to adjust the estimates you can. That will allow you to disagree, but within the right zone of possible answers.

– [From Corporate PR] You got our numbers all wrong! One, if you don’t put them out, then no I didn’t. If any company wants to correct my math, send me three years of financial data and I’ll happily provide an exclusive update.

(This is the first article in a three part series estimating how many US paid streaming subscribers there are in the US. Read about how I calculated the numbers here or here.)

The Decay is Real: Streaming Films on Netflix (and others) Lose Viewership Very Quickly – Visual of the Week

In December of 2018, Netflix let loose with their first datecdote™. They told us this…

But they went further! By their earnings report, they started telling us how many folks were watching their films in the first 28 days. Including an updated number for Bird Box of 80 millions subscribers watching 70%. Which allowed me to draw this conclusion:

IMAGE 1 - Film Decay Bird Box

As I wrote at the time, “the decay is real!”

Specifically, films that premiere on Netflix tend to have a significant chunk of their viewership in the first week or weekend. This is a binge-release wide phenomenon. Yet I had trouble proving the case. The other main piece of data I use is Google Trends data. But Google Trends isn’t viewership, just interest. I needed another data source (or leak) to prove it.

(Prove it to you, by the way. Not me. I know it’s true from personal experience at a major streamer. But non-disclosure agreements mean I can’t use that data.)

The decay of films has direct ramifications on the streaming wars. The steeper a film decays, the harder it is to monetize long term. So knowing how shows and films perform over time is important for the streaming wars. To show just one example, my Mulan analysis relied on forecasting its decay over time.

So I had a pretty strong hypothesis but couldn’t prove it beyond one example. Until today!

See Nielsen has been releasing weekly top ten lists of the most streamed shows. By total minutes viewed. They provided my their data going back to April of 2020. What I can do now is analyze movie performance to see if my hypothesis bears out. And it does. 

But let’s start with what this data is. I complain bitterly that most articles don’t lay this out, so here you go.

Who – Streaming customers
What – Total hours viewed (Nielsen provides million minutes and I divide by 60)
What (platform) – Any service
Where – In the United States
When – From March 30th to October 18th 2020
When (time period) – Measured Monday to Sunday.
How (did I get it) – Nielsen provided.

This data set ended up being 29 weeks of data, or 290 data points. Separating out the films gave me 17 unique films that ended up on the streaming top ten, 16 Netflix and one Disney. Of the 17 films, only six had two weeks of data. So I plotted the decay and got this:

IMAGE 2 - Total per WeekHypothesis failed! Look at Extraction or Old Guard. They only decayed at roughly the rate of 28% and 20% respectively. 

Ah, but apples-to-apples, am I right? Nielsen starts their data on Mondays. And not all Netflix films were released on the same day of the week. Historically, Netflix released big films on Fridays, but started moving some films to Wednesday. Like Enola Holmes. So let’s account for this and change our metric to hours per day (millions):

IMAGE 3 - Per WEekThere you go! See, the decay is real! (69 and 65% decay for Extraction and The Old Guard.)

But we can go one final step further. See, no Netflix film made it in the top ten for three weeks in a row. (With the caveat that we won’t know Hubie Halloween results until next week. Maybe it breaks the trend due to its theme.) This means we know that at the very least the lowest rated film in the top ten is the ceiling for our five films decay. That gives us this chart:

IMAGE 4 - Per WEek with with 3To iterate, the week 3 numbers is the maximum number of hours per day a film could have received based on the number 10 film in Nielsen’s streaming rates. The actual number could be even lower. So I’d say Extraction, The Old Guard and Project Power (all Friday releases) are the best look at what decay for a given title looks on Netflix week-to-week. (I would bet lots of money Enola Holmes and The Wrong Missy lost viewership into week 3.)

In total, this makes 9 films that show this sharp decay. The six above, plus Bird Box (see opening) and The Irishman and Murder Mystery, which are the only two other films that Netflix confirmed the opening weekend and 28 day totals. (Murder Mystery had 45 million subscribers opening weeekend and 73 million at 28 days, at 70% completion. Irishman had 26 million opening week at 70% completion into 47 million 28 days.)

Now that I have my film data set cleaned up, there are a lot more questions to answer. What type of films made the top ten list? What does this say about Netflix’s strategy? What about the correlation of US Nielsen minutes viewed to Netflix global 2 minute datecdotes? What films made Nielsen’s list but not Netflix’s datecdote list? Those are all great questions, but will come in future articles. 

Thanks to Nielsen for providing the data. If you’re an analytics company that wants to give me data, send me an email.

(By the way, if you wanted to know the Google Trends look of those films, here you go:

IMAGE 5 - GTrends

Visual of the Week – Netflix Top Ten Series by Total Minutes Viewed

One of the big questions every quarter is whether or not Netflix will hit its quarterly subscriber growth estimate. This leaves analysts scrambling to read the tea leaves from app downloads and what not to try to figure out if they are on track or not. Tomorrow (Tuesday Oct 20th) will tell us one way or another.

My contribution to this is to note that often having valuable content drives adoption and usage, and hence subscriber growth. This sounds relatively benign, as a statement, but has profound implications for whether or not Netflix has a “moat”. Or indestructible defensive position. If Netflix is simply another content creator whose success depends on producing good content, well they’re as mortal as the rest.

So my data of the week is one look at content. There are lots of ways to do this (Hedgeye Communications used Google Trends to brilliantly show this in a newsletter last night), and the data set I’ve been playing with recently is Nielsen’s top ten streaming shows each week. Here is the total minutes viewed for Netflix from Nielsen by week for the United States from end of March to present, with a big gap:

Screen Shot 2020-10-19 at 10.45.22 AM

And here’s the table for folks who want the raw numbers. I also included how many titles they had in the top ten.

Screen Shot 2020-10-19 at 10.50.29 AM

Ramifications/Thoughts/Insights

– Hits drive the ratings. Again, this is so obvious and has been true for decades it sounds silly to restate it, but in the “digitally disrupted” world, we have to relearn old lessons.

– Man, look at March! It turns out Tiger King and Ozark drove huge viewing to the platform. Almost 2.5 times more viewing to the top ten.

– Likely this means that content in Q2 was much more popular than Q3. Tentatively, this would portend a drop in US and Canadian subscribers in the next earnings report. (Some application sign-up and download data is presaging this outcome as well.)

– Yes, the last three weeks have seen 1 to 2 non-Netflix shows make the list, making this time series not totally apples-to-apples over time. That said, I ran the list with the Amazon and Disney shows, and it looks mostly the same. Meaning that the top 3-5 shows tend to account for most of the viewership, so having one or two small shows with 500 million minutes viewed doesn’t radically change the numbers.

– I have a ton to unpack for these Nielsen numbers to learn/prove more insights about how content behaves on Netflix and other streamers. (Trust me, I know a ton from my previous role about how the content behaves, but I want to show/prove it in the data. And for the most part, it behaves the way I expect.)

– Long term, I hope to compare Nielsen’s data to Netflix’s Top 10 data (provided by Flix Patrol) to Netflix’s own datecdotes to Google Trends and more, but that takes time. Also, if you have a data set you want to share, my email is on the contact page!

– Specifically, I’m on the look out for the missing weeks of top ten data from this Nielsen data set. Someone sent me the April and May numbers, I’d love to have March, June and July if anyone has them. Your confidentiality assured.

Visual of the Week – Netflix Produces 3.3% of Its Top Streaming Shows

Over the last six weeks, Nielsen has released a top ten list of the most streamed series/films by total minutes viewed. I’ve been taking this data and adding a layer of detail on top, specifically who produces and who distributes what shows on Netflix, Amazon and so on. Now that we have six weeks of data, we can start to parse some insights. 

(Thanks to Kasey Moore of Whats-On-Netflix for saving the Nielsen lists for me.)

The visual of the week for this week is just a look at who owns what in the streaming wars. Of the 52 billion minutes of TV tracked by Nielsen, here’s who produced what and what shows they own (by parent company):

Screen Shot 2020-10-14 at 8.48.12 AM

And here is the table if you want to see how the sausage is made.

Screen Shot 2020-10-14 at 8.48.19 AM

Now some insights/details.

— Some shows were co-productions, in which case I split ownership between the two companies. Meaning, the percentages won’t add up to 100%, since some shows were counted in both owners’ percentages.
— Two films/series were not on Netflix (The Boys and Mulan), but that only boosts Netflix to 3.3% in “Netflix-only” series.
— I focused on major producers only. The traditional conglomerates. Usually, any of these shows has a bunch of smaller producers attached; I counted who likely paid the production budget.
— I use Wikipedia to determine producers with another source who tracks everything on Netflix by copyright ownership. The closest call was Umbrella Academy, which is also co-distributed by Netflix. However, NBC Universal owns the copyright outright so Netflix will not own it in perpetuity. Moreover, they aren’t listed as a producer, so didn’t make this list.
— That’s really what I’m trying to get at by focusing on producers versus distributors. The idea that who “owns” a piece of content so they can eventually maximize the value of it.
— I can hear the criticism, “Well this list is mostly library content.” And that’s true, but not 100% correct. Even the list of first and second run content by Netflix is almost entirely licensed content.
Seriously, don’t use “Netflix Originals” as a descriptor. It really doesn’t capture the key parts of ownership in content.
— I will run this same analysis on the FlixPatrol data for Netflix’s Top Ten list, but I haven’t had time to do that yet.

Bottom Line: A core thesis of Netflix’s content spend has been to build a “moat” of original content they own in perpetuity. Clearly they have a ways to go before they truly own their content.

Visual of the Week – Is Netflix a (More Watched) Broadcast Channel?

We had a fun bit of data dropped via Nielsen in August which allows me to update my most popular article of the year, “Netflix is a Broadcast Channel”. Nielsen let us know how viewership looks through the Coronavirus lock downs as of August 2020. Here’s the original 2019 data and the update:

Screen Shot 2020-09-02 at 9.19.51 AMSince I promised this is in visual form, here’s the stacked bar charts…

Screen Shot 2020-09-02 at 9.20.15 AMQuick Insights

First, is this statistically significant?

Yes, tentatively. It all depends on what your confidence interval is, but with their panel of about 1,000 folks, Nielsen can have a margin of error either direction of about 3%. This is right on that border line.

That said, why use a 95% confidence interval? If you use a 90% confidence interval, than year we’re reasonably confident Netflix saw a bump. I’d add, everyone else was flat and next grew or declined. (Except for Disney+, which wasn’t on the platform last time.) That’s hard to interpret as anything but good to great news for Netflix. Contrariwise, if you want 99% certainty, then this is firmly within the margin of error.

So we’ll see how this number grows, but I’m inclined to think it measured a real trend.

Second, why not update your Primetime chart from last time?

You mean this one? Image 1 - Estimates

If this were extrapolated to Primetime, then Netflix has exceeded even CBS and taken the top broadcast spot. (They’d be at 8 million primetime viewers if we used the same math from August.)

First, and simply, I don’t have the linear TV viewing numbers to compare. Broadcast ratings could have increased by a similar rate, so it wouldn’t be apples-to-apples. 

Also, while the 3% increase in Netflix viewing is good, and the 7% surge in streaming video is even bigger, I’m skeptical that viewing came during primetime. Sure, folks can’t go out so TV viewing is likely up across the board at Primetime, but the 7% surge in streaming likely came from elsewhere. I see two options.

Option 1: People watching TV during the daytime. The notable thing about coronavirus is that everyone is sitting at home streaming during work. (Are those two things incompatible? I think so, but that doesn’t mean it’s not still happening.)

Option 2: Children. The other group that is probably streaming even more than ever are kids. And children. And teenagers. Again, not during primetime, but throughout the day. And my initial comparison was about primetime viewing. That’s why Disney+ went from not existing last fall to getting 4% share of streaming.