the streaming wars

You Is a Gigantic Hit for Netflix, According to Netflix

Photo: Netflix

Netflix is suddenly getting chatty about viewing stats for its original films and TV shows. In a letter to shareholders Thursday, the streaming behemoth said its recently acquired-from-Lifetime thriller You will be streamed in an estimated 40 million homes within its first month on the service, while its new critically praised comedic drama Sex Education is on track to post similar numbers. On the movie side, Netflix told shareholders last month’s social-media phenom Bird Box is now on track to be screened in 80 million subscriber homes, up from the 45 million the company previously said watched the movie during its first week. And in terms of its internationally produced content, Netflix says Spanish sudser Elite was watched in 20 million homes its first month, while Bodyguard (U.K.), Baby (Italy), and The Protector (Turkey) have each been seen in 10 million Netflix homes. These are big numbers, to be sure, but they come with a slew of caveats.

First, Netflix’s definition of what constitutes a viewer varies for movies and TV shows. With films, the company counts anyone completing 70 percent of a film as a viewer. For TV shows, it’s 70 percent of a single episode, not an entire season. So while the movie number is pretty good at gauging whether folks watched a title, the TV number is best understood as a reflection of whether a show is getting sampled vs. being enthusiastically consumed. (In the linear TV world, it’s common for shows to get a very big audience for a premiere and then decline 30 or 40 percent over the course of a full season, which is why networks tend to gauge a show’s success on its season average.) Plus, Netflix ended 2018 with 148 million subscribers around the world, giving it a much bigger potential audience than an American network such as, say, Lifetime. (Top cable networks are seen in about 90 million homes.) This is not to suggest 40 million isn’t impressive. It’s just that comparing You’s audience on Lifetime vs. You’s audience on Netflix isn’t apples vs. apples.

It’s also worth remembering these numbers in some ways undercount Netflix’s actual audience. The stats cited above refer to the number of subscriber accounts which have watched these projects, not actual viewers. If three people got together to watch Bird Box on one TV set, Netflix tallies that as one “view” and not three. (Nielsen, by contrast, counts both TV homes and total viewers, with the latter stat now the most commonly cited by networks and reporters.) It’s quite likely the actual number of people around the world who’ve watched Bird Box is approaching 100 million, assuming Netflix’s data is accurate.

And that’s the last thing to keep in mind about these numbers: Netflix’s data isn’t independently audited by outside companies. However, Nielsen and companies such as Parrot Analytics do issue reports which offer a snapshot of how Netflix content is being consumed, and their findings have often tracked with what little data Netflix has released. And unlike last month’s Bird Box tweet, Netflix’s statements today were released as part of a shareholder letter — putting them under the jurisdiction of Security and Exchange Commission rules, which strictly prohibit false and misleading statements by companies in official public communications. The SEC takes such statements super seriously, and has often gone after companies for lying or withholding information (think medical start-up Theranos). So while Netflix could be making these numbers up, the company’s officers would be risking millions of dollars by doing so.

You Is a Gigantic Hit for Netflix, According to Netflix