During January’s TCA Winter Press Tour, a variety of network heads took questions from THR about the current state of the television industry – one of them being Netflix’s chief content officer, Ted Sarandos. In Sarandos’ answers, a variety of potential news came out about Netflix’s future, including re-iterating the goal to release 20 original seasons of television a year (about one every 3 weeks), and early rumblings of a potential multi-cam sitcom. However, all this ambition leaves us with a new question: Is the state of Netflix, as it exists, truly sustainable?

In the coming months and years, Netflix plans to launch the first of a 5-series deal with Marvel in Daredevil; a former NBC developed comedy in Unbreakable Kimmy Schmidt; a late-night talk show hosted by Chelsea Hander; a reality series from the creators of Jiro Dreams of Sushi; and two non-English language programs in Marseille (French) and Club de Cuervos (Spanish). And they plan to do all this while still maintaining their continued level of expected quality in established series such as House of Cards and Orange is the New Black. But has the organization truly succeeded enough to warrant this level of expansion?

Netflix’s New Normal

Netflix Lilyhammer Can Netflix Thrive Without Reporting Ratings and Value?


For those who don’t know: Netflix has a model much different than typical broadcast television in that they do NOT make their viewership data known to either consumers, or those within the industry (actors, agents, studios, etc.). However, by not releasing the numbers, there’s something we can’t say about the service: We can’t say it’s a success or a failure because we don’t know its value.

But in a business where options for providing content to consumers seem to multiply by the day, there might be nothing more important than getting an accurate read on how the Netflix model is working.

Broadcast Measurements

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Based on the data we’re able to calculate, we can make reasonable determinations as to the value of networks like CBS, HBO and FX. More importantly, we know how these entities compare to one another. HBO doesn’t track as high as CBS in live viewership, but the audience watching Game of Thrones is more likely to engage with extraneous items outside of the program itself, thus conveying the perception of value, regardless of the fact it’s largely a vocal minority. Compared to the viewership of NCISthe passionate – but Nielsen ratings-limited – fan base of Game of Thrones is likely to make HBO’s upcoming IMAX screening an overwhelming success. In addition, they buy shirts and mugs and other merchandise, which allow them to express their fanaticism – and all of that money funnels right back into the hands of HBO.

Conversely, the unequivocally massive live viewing audience of NCIS is merely content with just watching the show and letting the experience end there. They may love CBS’ crime-solving team – Gibbs, Abby, McGee and DiNozzo – but they don’t have an urge to wear that love on their sleeves. They also don’t feel the need to start podcasts and buy t-shirts – or to watch “digitally enhanced” versions of programming not filmed for IMAX’s immense size.

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Because of an agreed upon metric system – flawed as it may be – the value of a single program can be compared to the value of another, thus allowing the entire television system to exist. Nielsen ratings, social media metrics and audience demographics are all ways in which niche shows like Hannibal are able to stay afloat. By knowing the show tracks with an audience that engages more with the program, it’s able to go a lot further than a potentially higher-rated show such as Law & Order: Special Victims Unit, which tracks a decent engaging audience on social media, but like NCIS, doesn’t have much staying power outside of its runtime.

Immeasurable Netflix

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Is Netflix’s Marco Polo a success? It was renewed for season 2, so that means it connected with audiences, right? Well, we don’t know. The series was eviscerated by the majority of critics and has little-to-no awards buzz. There’s next to no fan interaction from even the all-too-familiar vocal minority. There’s no sign of the show on Netflix’s various TV spots, touting the series that can be found on the service. We have no idea how to value the show because Netflix refuses to reveal the one thing we could go on: how many of its 50 million global subscribers actually watched it. All we have is the faith that the show was worthy of a season 2 order. But how do we know Netflix isn’t purely trying to protect its brand by not revealing the numbers? How do we know the show wasn’t a failure – a perception the company wants to avoid? We don’t, and that’s the problem.

Bag on CBS all you want about its programming, but we have an idea as to the network’s worth – and right now that means everything. HBO has a similar subscriber model to Netflix and is under no obligation to release their numbers – but they do anyway, thus making the value of their programming clear to all. Netflix, however, appears to be hiding data that could tarnish its perception of power as it expands into riskier territories such as variety and foreign programming.

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But worse, not only do they withhold that information from the general audience: they withhold it from their talent. As DareDevil showrunner Stephen DeKnight stated at a Q&A in November 2014, “they don’t release numbers to the general public; they don’t release them to us.”

It’s one thing for we, the public, not to know, but Netflix is playing with serious fire by not informing its creative talent of programming performance. Without proper information on a show’s worth, the talent in question has no idea of their own value to the service. In fact, it’s that lack of information – more than any other – that could lead to an unavoidable domino effect in the future.

How Netflix Could Stumble

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Part of the reason creators such as David Fincher, The Wachowskis, J. Michael Straczynski, Jenji Kohan and Ricky Gervais went to Netflix was because it invented its own image of success. At the beginning of the SVOD service’s original offerings, there was no reason to question how well everything was doing… but we’re not living in 2012 anymore.

How much longer can Netflix’s data secrecy be maintained when contracts with talent start coming due? Agents and managers are going to start wanting to know just how much their clients are worth to the service, and if Netflix refuses to share that information, there will be nothing stopping those high-profile names from walking across town to HBO.

Of course the response to that would be, “well Netflix will just find new talent.” But will they? Hollywood can only be played for cheap so many times before it starts growing wise. Like Marvel is learning now with Robert Downey Jr. and Chris Evans, once people realize they’re worth something, they’ll demand that and nothing less. Sure, Fincher may come onboard House of Cards for just a budget – but what about the next Fincher? That guy or gal is going to want hard data concerning their value, in order to avoid the pitfalls of his/her predecessor. What happens then?

Kevin Spacey in House of Cards Season 2 Chapter 26 Can Netflix Thrive Without Reporting Ratings and Value?

“Is that blood in the water I smell?…”


Netflix prides itself on being the home of quality original programming above all else. They don’t want you to be interested in Sony’s Breaking Bad on Netflix – Sony being the entity that produces and owns the series – they want you to be interested in Netflix’s House of Cards on Netflix. But what happens when you can’t make the next House of Cards because the next Kevin Spacey has grown wise to the secrets being hidden?

Audiences are fickle creatures, and if the content stream on Netflix were to dry up because it’s not interested in licensing library content like Amazon and Hulu – and they can’t get a new original show off the ground because of  lack of talent (who aren’t interested in being undervalued) –  then it will mean end times for the company.

Conclusion

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Netflix is Schrödinger’s cat. It’s both a success and failure because we don’t have enough information to determine either. But is that lack of information a hindrance? Can the service survive in the coming decade without letting people in on its worth? How much longer can it thrive on its name recognition alone? They may claim viewership data doesn’t matter because it’s a subscriber-based business model – but nothing’s ever that simple.

What are your thoughts? Will company’s like Marvel continue working with Netflix without proper feedback data? Is this a concern to you as a consumer? Or is you only concern having the streaming service you subscribe to offering continuous new content – original or not? Let us know in the comments.