This article comes from Buffering, Vulture’s weekly newsletter about the streaming industry; you can sign up here for more.
Back when broadcasters dominated television, and ratings weren’t depressing, each of the big four networks would schedule conference calls to tout their performance during Nielsen’s November, February, and May sweeps measurement periods. They were big deals: Execs would tout their successes, cover up failures, and passive-aggressively take shots at each other. Plus, those of us who covered TV got a chance to grill the suits about anything going on in the business at the moment (like why the world needed three Amy Fisher movies.)
Those regular check-ins vanished about a decade ago, right around the time linear ratings started to collapse. These days, the closest parallel to those conference calls come every three months, when Netflix releases its quarterly earnings and subscriber counts, resulting in a blizzard of analysis as Wall Street and media reporters try to evaluate the health of the world’s No. 1 video-streaming service. In this week’s edition of Vulture’s Buffering newsletter, which you can subscribe to here and read a preview version of below, we take a closer look at what Netflix is up to right now, as well NBCU’s Peacock plans, Apple’s Oprah headache, and what might have been the most important speech at this month’s TCA press tour.
Demystifying Netflix’s Numbers
During the last three months of 2019, Netflix added more than 8 million net subscribers worldwide, but a relatively modest 420,000 in the United States — 30 percent fewer than the 600,000 the company had projected. Also during the last three months of 2019, Disney launched a heavily promoted and well-funded streaming platform in the United States. So, that must mean Disney is already hurting Netflix’s bottom line right?
It’s not that Disney+ was a complete nonfactor in Netflix’s performance during the fourth quarter. During an investor video interview Tuesday following Netflix’s Q4 earnings report, CEO Reed Hastings conceded the debut of Disney takes away “a little from us.” But as Hastings also noted, Disney and other new streaming outlets are much more likely to hurt old-school linear networks than other streamers. And those international numbers more than made up for the sluggish Stateside growth, easily beating expectations (while pushing Netflix’s non-U.S. customer base above 100 million for the first time).
Is Netflix on the downswing? Wall Street delivered a mixed verdict: A Business Insider roundup of nine major analysts showed most remain upbeat about Netflix’s near-term future, even in the face of increased competition. On the other hand, investors seemed less pleased: Its stock fell nearly 4 percent on Wednesday (but was trading higher earlier today). And one longtime Netflix bear is more convinced than ever the glory days are over for the company. “Competition is denting the [Netflix] domestic story,” Greenlight Capital founder David Einhorn wrote in a letter to investors this week.
It would be naïve to think Netflix won’t hit some turbulence as legacy-media rivals finally get their act together and start moving into the nonlinear future. Baby Yoda will only grow more powerful as Disney+ digs deeper into its IP library and surrounds him with more hit shows. Some Friends fanatics might be tempted to cancel Netflix and sign up for HBO Max once the latter platform launches in the spring and starts streaming reruns of the 1990s classic.
However, Netflix-ologists have to remember: Skeptics have been declaring the death of Netflix for years now, yet somehow, it just keeps getting bigger. I’m not going to pretend to know whether Netflix’s march toward global domination will continue unchecked forever, particularly given the legit questions over its huge level of debt. But I don’t see anything in the streamer’s fourth quarter performance to suggest a big shift in the Netflix narrative any time soon.
Toss a View to Your Streaming Service
The other big headline from Netflix was the announcement that it was shifting how it reports the popularity of its original titles (on those still rare occasions when it says anything at all about performance).
• How it used to count viewers: Netflix tallied views by looking at whether a subscriber had watched 70 percent of a movie or a single episode of a series.
• What it’s doing now: Anyone who selects a title and stays with it for at least two minutes — “long enough to indicate the choice was intentional,” per Netflix’s letter to shareholders — gets counted, shifting the company’s metrics.
• The effect: As part of the letter, the company singled out titles such as The Witcher and 6 Underground as having been particularly popular, and reported on the many millions of users who, in its words, “chose to watch a given title.”
When I and others reported on this shift via Twitter Tuesday afternoon (in my case including a caveat that readers should take these numbers with a grain of salt), my feed began filling up with replies from folks calling BS.
The typical responses: “You’d need as many grains of salt as Phil Hartman needed bowls of other cereals to equal one bowl of Super Colon Blow,” my friend and Rolling Stone TV critic Alan Sepinwall put it. Numerous news outlets trumpeted the latest numbers, but some reported the data with heavy qualifications. Variety’s Todd Spangler was blunt in his assessment of the company’s shift, writing, its “new methodology even further obscures what could be considered the actual audience for a given TV show or movie.”
Spangler is right: To the extent those of us in the media report on this new Netflix data as a measurement of how many people are watching Netflix shows, we are very much doing readers a disservice. When Nielsen reports that 15 million viewers watched ABC’s Jeopardy! The Greatest of All Time, it means the initial broadcast of that show had 15 million people watching it, on average, over the course of the hour it was on the air. When Netflix says X million people “chose to watch” The Witcher, that is … not the same.
But it’s worth noting that Netflix isn’t claiming these numbers reflect the size of a show’s actual audience. Note the lawyerly phrase it used in the shareholder letter: “chose to watch,” which is not the same as “watched” or “viewed.” The letter also said the company was releasing data to “demonstrate popularity,” not to measure the audience. It wants to show which titles among the tens of thousands on the service are catching its members’ attention and generating sampling. My take: I don’t think Netflix is trying to con anybody, but I do think its execs are as obsessed with bragging about size as their network and cable TV counterparts.
What does a data wonk think? One person who is very, very good at analyzing data — Matthew Ball, a venture capitalist and former Amazon exec who writes regularly about the space — told me he understands the pushback to Netflix’s latest data dump. “I get why two minutes seems absurd,” he says, while quickly adding that Netflix “isn’t alone” when it comes to struggling to define what constitutes a program view; some services, he notes, require far less than two minutes of engagement when tallying views. YouTube requires folks to watch for just 30 seconds, Oriana Schwindt points out in her super-handy, just-launched site What Is a View. Says Ball: “Every OTT service, from Spotify to Apple Arcade, is struggling with this same question.”
“We are used to a world where everything was easily comparable,” he continues. “If 1.2 million people watched a show at 8 p.m. on Network A, it made roughly 20 percent more than a show with 1 million on Network B, and both networks were in the same number of homes.” But in the subscription-streaming world, Ball explains, “subscriber bases and usage levels vary widely [and] not all views are created equal, nor are all viewers or shows. The only people who can really understand these numbers are those inside a service — and they only know those numbers’ value to themselves. Netflix knows what The Witcher’s value to Netflix was. But they have no real idea how much value it would have produced for Hulu, and neither does Hulu.”
What it all means: It’s possible we’ll eventually get to a place where we’ll have Nielsen ratings for streaming video. In fact, Nielsen has its own streaming-measurement products on the market now, though their utility is limited and they only capture a portion of total consumption. Ball says he’s heard that Hollywood agencies and law firms “are trying to come up with a coherent methodology that is fair, but doesn’t betray internal data.” It’ll be interesting to see whether Netflix and other streaming platforms decide to help make such a measurement tool possible — my guess is it’s unlikely. Unless the Hollywood guilds force it upon them, there’s little incentive for streamers to enable more transparency.
So Will Peacock Be Good?
It has been a few days since Comcast’s NBCUniversal strutted out specifics about its forthcoming streaming platform, Peacock, and the initial buzz has been relatively upbeat. (Disclosure: Comcast is an investor in Vox Media, Vulture and New York Magazine’s parent company.) I noted last week that it seemed clear Peacock isn’t being positioned as some sort of Netflix killer, and the Wall Street types I’ve read since seem to agree:
• Credit Suisse analyst Douglas Mitchelson, in an investor letter: “Peacock is likely to compete more with ad-supported services like YouTube, Hulu, Pluto, and the pay-TV bundle, and less with Netflix.”
• Guy Bisson of Ampere Analysis, talking to THR: “As the TV market makes a general transition to streaming, it’s a logical step to move beyond the SVOD-only agenda that has so far dominated, towards the incorporation of advertising models as part of the wider bundle and choice options.”
• Lightshed’s Rich Greenfield, in a report out earlier this week: “Comcast truly understands that consumer interest in linear TV and the bloated video bundle is fading and that it needs a replacement for both subscription and advertising revenue that leverages its robust broadband pipes … Peacock is the best way to watch NBCU content, no bundle required.”
Reading the analyst takes and going back to video of last week’s presentation, I keep returning to one big thought about Peacock: It’s not streaming, it’s … television. For the past decade, Netflix and many of its successors have been busy blowing up the whole linear-TV model, tossing away long-established practices such as time slots, weekly episodic releases, and commercials. Peacock doesn’t reject all those shifts — you can pay $10 a month and never watch an advertisement — but it does represent a push-back against the notion that all streaming-video services need to follow the same template.
• While there will be plenty of on-demand content, a huge chunk of that offering will simply be next-day access to current NBC daytime and primetime shows, early access to the network’s late-night talkers, or past seasons of NBC- and NBCUniversal-produced series.
• There’ll also be a big push to re-create the experience of watching live TV. Peacock will be filled with dozens of curated virtual channels filled with shows and movies selected and scheduled by the platform’s programmers, along with virtual news and sports networks. Subscribers will be able to scroll along an electronic programming guide, as they’ve done for years with cable TV — a so-called “lean back” experience, as industry types call it.
• Even Peacock’s original-series slate is heavy on reboots of past NBC and Universal Television properties (Punky Brewster, Saved by the Bell, Psych, Battlestar Galactica) and new shows from producers long associated with the company (Tina Fey, Mike Schur, Mindy Kaling.)
Of course, other outlets have broken from what Bisson cleverly calls “the SVOD-only agenda.” ViacomCBS’s Pluto TV has long boasted dozens of advertiser-supported virtual channels as a supplement to its on-demand offerings. And while Hulu has plenty in common with Netflix, it began life as a destination for next-day network-TV episodes, and its more recent Live TV tier has further bridged the gap between linear and on-demand platforms. Peacock, however, enters the market with far more resources than Pluto and a much more attractive price point than Hulu (as little as free for its most basic level).
The bottom line: I think the analysts who seem bullish on Peacock are largely right to be optimistic. Broadcast and cable TV as we’ve known them are dying, as is the traditional cable-TV bundle offered by Comcast. Peacock seems like a sensible way for a traditional media company lacking the scale of a Disney or WarnerMedia to transition its existing businesses into the future.
Still, two caveats …
• The original content on Peacock seems, in a word, boring. I’d never bet against new shows from Fey or Schur, but based on the limited log lines so far, too much of the platform’s slate feels like stuff that is already on NBC or USA Network or Syfy. I get the need to make populist programming for Peacock given the platform’s reliance on advertising, but FX and AMC have proven that “ad supported” and “critic friendly” aren’t mutually exclusive.
• It’s not too late to ditch the Peacock name and branding in favor of something NBC-related (my suggestion: NBC Unlimited). Stick with what consumers know or love rather than starting from scratch.
What Else Is Happening: News From Apple, CBS
Oprah, Apple, and the Doc That Wasn’t
This weekend was supposed to be the big Sundance debut for On the Record, the investigative doc exploring sexual-assault allegations against music-industry titan Russell Simmons that had been headed to Apple TV+. Instead, the film has turned into a massive, ongoing headache for the streamer that’s now entering its third week.
The trouble began on January 10, when Oprah Winfrey, who has an overall deal at Apple and had brought the project to the company, took her name off the film, prompting Apple to drop it from its slate. A week later, Winfrey told the New York Times she had been under pressure from Simmons to back off, but she insisted that he had nothing to do with her decision to pull out. Then, on Tuesday, Winfrey decided to go on CBS This Morning, where she further explained her decision, telling her friend Gayle King that she “thought some things were not right” in the latest cut of the film. “I wanted the context of the story to be broadened. I wanted more women brought into the story,” Winfrey said. And on Wednesday, THR chronicled the backlash to Winfrey and Apple’s decision among Simmons’s accusers and Me Too activists.
Combined with the delayed launch of onetime Oscar hopeful The Banker (now slated to debut on Apple TV+ in March), it has been a rocky start for the streamer’s film ambitions. And more bad headlines are expected for the streamer in the next few days, with On the Record premiering at Sundance on Saturday. It’s unlikely that the fallout will linger much past Sundance, but Apple sure could use a win on the feature front soon.
Two other bits of Apple TV+ news …
• Julia Louis-Dreyfus will make her next TV show for Apple TV+. Multiple platforms were looking to form a pact with the Veep and Seinfeld star, but one of the new kids on the streaming block ultimately landed her services, signing her to what the company called “a sweeping overall deal.” Translation: She’ll produce and star in TV and movie projects for Apple over the next several years.
It’s a big get for Apple on a few fronts. The most obvious is that the streamer will likely get a show starring one of the biggest TV comedy stars of the past 25 years. But it also gives Apple another big player in the awards-season derby (Emmy voters love JLD), something hugely important for a platform looking to fill the quality-TV niche. Having Louis-Dreyfus join Jennifer Aniston and Steven Spielberg on Team Apple also figures to help the streamer attract even more big names who will want to work with her, both behind and in front of the camera.
• And speaking of Aniston … Her win for The Morning Show at Sunday’s SAG Awards marked Apple’s first major victory at a Hollywood kudos. It’s not a game changer, but it’s a good omen for a three-month-old platform to be already winning awards.
Earlier today, the first episode of Star Trek: Picard beamed onto CBS All Access, joining 2017’s Star Trek: Discovery, Star Trek: Short Treks, and the upcoming animated comedy Star Trek: Lower Decks in the streamer’s growing library of Trek spinoffs. While All Access has other big tentpoles — including The Good Fight and its reboot of The Twilight Zone — the Trek franchise is the streamer’s main weapon in its battle to lure (and keep) subscribers, as The Wall Street Journal’s Joe Flint explores in his profile of Alex Kurtzman, the producer who supervises all things Trek for All Access parent company ViacomCBS.
Reviews of Picard have been generally positive (my review: I loved it), and it has generated months of sustained buzz for All Access. It’s doubtful the streamer will release viewership stats, but odds are good it will find a way to put out a press release touting a record in new sign-ups or some sort of social-media silliness. There’s a reason All Access ordered a second season of the show before it premiered: As a marketing tool, Picard was a hit the moment it was green-lit to production.
And yet… ViacomCBS’s Trek strategy remains something of a head-scratcher to me. I get the desire to use the franchise to build up All Access, but what doesn’t make sense is limiting such a potentially huge mass-appeal series to a platform with a tiny subscriber base (an estimated 5 million users). Sure, Trek is probably helping to grow that base, but in the meantime, the company is stunting Trek’s ability to attract new, younger eyeballs. At the very least, ViacomCBS should carve out a linear window for the Trek shows, either on the CBS broadcast network or on its Paramount or Pop cable networks.
The Best Speech From TCA
When a respected cable-industry exec gets up in front of a ballroom full of cranky TV reporters to deliver a stinging rebuke of the streaming industry, it usually means one thing: John Landgraf has arrived at the Television Critics Association press tour. But while Landgraf was, in fact, back at TCA earlier this month — and was, per all reports, his usually informative and chatty self — he didn’t go off on the Streaming Menace this year. (Has shacking up with Hulu inside the Mouse House mellowed the mayor of television? Who can say.)
No, the fire and brimstone at the January 2020 TCA came courtesy of another respected cable chief: AMC Networks Entertainment Group/AMC Studios president Sarah Barnett. The exec, whose portfolio covers everything from megahits such as The Walking Dead and Killing Eve to a cult fave like Sherman’s Showcase, didn’t go after Netflix directly, as Landgraf sometimes has. Instead, she used her opening remarks at TCA to make a strong case for why there’s still a place for smaller outlets in the era of Too Much (Big) TV and how the global TV industry’s rush to scale up to stay competitive threatens to kill creativity. A key section:
We think that an industry dominated by volume and data-led decision making will hurt the quality and the diversity of television and that we can stand as a counter to that. The best indicator today of what gets made and what gets recommended to people is what’s already popular. In this landscape of collapsing context and merging of different audience segments, optimization begets imitation. If something needs to work as well in India as it does in America, then everything starts to look the same. If you’re trying to talk to everyone, you’re not going to be able to say much that’s truly meaningful to anyone.
Far from more choice, the untested and the unusual are minimized in the algorithm of big data. This flattens out risk, and while more is made and more is spent, it’s drawing from proven successes and therefore proven perspectives. The internet claimed it would free us from old gatekeepers and provide frictionless choice and diversity of voice. But the biases of Hollywood power brokers seem to be being replaced by those of engineers a few hundred miles up the coast.
Against this headlong rush toward volume and data shaping companies’ content strategies, I see huge opportunity for AMC Networks to claim a competitive edge, as our size relieves us from the pressure of needing to make and serve television to everybody in the world with a broadband connection. We don’t have huge pipes to fill — and I believe that when technology drives the need to fill pipelines, it’s not necessarily good for audiences or for quality … We don’t want to make tons of things, just good things.
I don’t buy into Old Hollywood’s spin that Netflix is just some soulless data machine that cranks out content based on whatever the
Matrix algorithm dictates. It’s a platform that still makes room for stuff that would feel right at home on one of Barnett’s channels, like Special or the upcoming Latinx dramedy Gentefied.
But I don’t know if Barnett was trying to issue some blanket condemnation of Peak TV culture; her comments certainly didn’t go that far. Mostly, she made a positive case for her company and layered it with a measured critique of a culture that insists that more of anything is better and that the idea that the only way to create great TV is to give more and more money and resources to people who’ve already made two or three or ten good TV shows.
Netflix certainly didn’t invent the notion of relying on and rewarding proven talents: Aaron Spelling, Dick Wolf, and Chuck Lorre were getting paid insane sums of money to make the same series over and over long before Ted Sarandos started building his showrunner collection. But the shift to streaming has turned a bad Hollywood habit into a potentially dangerous addiction. Barnett, like Landgraf, is right to sound an alarm.
Fun With Numbers
It’s hard to call any TV event with an audience of more than 40 million a disappointment, but the linear audience for Fox’s prime-time broadcast of Sunday’s NFC Championship showdown between the Green Bay Packers and the San Francisco 49ers — 42.8 million viewers, per Nielsen — ranks as at least a mild bummer for the network and the NFL. The reason: That’s down around 20 percent from last year’s similarly late championship game (the NFC finale, between the L.A. Rams and the New Orleans Saints), which notched 53.9 million viewers in the 6:30 p.m. Eastern time slot. It didn’t help that the NFC Championship was a blowout, but the Nielsen numbers for CBS’s NFC finale were also down versus the similar game last year. Still, the NFL’s overall numbers this season were up versus those of a year ago, so don’t expect anyone at the league to lose any sleep over one so-so Sunday.
The Time Capsule: A Splashy Star Trek Premiere
In honor of today’s Picard premiere, I started nosing around YouTube to see how Patrick Stewart’s last intergalactic TV voyage, Star Trek: The Next Generation, was marketed to audiences. Unlike the original Trek series, which aired on NBC, TNG was syndicated to local TV stations by producer Paramount. One way the studio helped stations sell the show — beyond having John Tesh do a six-minute preview of it on Entertainment Tonight — was with a series of promos counting down the days until the premiere. What I love about the promos, beyond their awesome late-’80s vibe, is that Paramount recruited the late, great announcer Ernie Anderson to do the promos. Anderson was the voice of ABC for the better part of two decades, so having him do an ad for a syndicated show surely signaled to 1987 audiences that TNG wasn’t going to be some low-budget Trek also-ran.
“At some point, you can’t have our experience without having Harry Potter be a part of it.”
— HBO Max chief content officer Kevin Reilly, predicting the service will eventually find a way to lease back streaming rights to the WarnerMedia-owned movie franchise. They’re currently tied up at NBCUniversal.