Ever since Netflix got into the original programming and content game with House of Cards in 2013, traditional TV broadcasters started to see the online streaming service as competition as more and more people start to turn to the Internet for quality entertainment, instead of television. Although broadcast networks have higher ratings and bigger numbers, Netflix is starting to cut into the television business with new TV series that've started to get more attention around the world.
However, since Netflix doesn't divulge their ratings to the public, it's hard to scale where they stack up against traditional broadcast networks like NBC, ABC, CBS, and Fox. But recently, NBC announced a commissioned report from Symphony Advanced Media that reveals Netflix's illusive ratings and viewership numbers. According to NBC, the online streaming service isn't doing as well as they're leading on; now Netflix fired back at the broadcast network.
As reported on Variety, Netflix chief content officer Ted Sarandos called out NBC's report and claims that it “doesn’t reflect any sense of reality of anything that we keep track of.” Sarandos continued to poke fun of the broadcast network during Netflix's TSA panel, asking “Why NBC would use their lunch slot with you to talk about our ratings. Maybe because it’s more fun than talking about NBC ratings.” He added that NBC's ratings on Netflix's original series, such as Jessica Jones, Master of None, and Orange is the New Black, are “remarkably inaccurate.”
Although Sarandos didn't disclose any numbers from their slate of original series from 2015, the Netflix officer did offer up a few reasons why they don't drive their programming strictly by the numbers. For Netflix, it comes down to the creative process and aiming their content to their subscribers. Sarandos explained:
“Once we give a number for a show, every show will be benchmarked off that show. We may build a show for 30 million people and we may build a show for 2 million people. And we have shows that do that. [Revealing ratings puts] a lot of creative pressure on talent [and] has been remarkably negative in terms of its effect on shows.”
Netflix doesn't seem to be completely interested in high ratings, but rather signing up new customers, while retaining loyal subscribers to pay a monthly fee. It's more important to give subscribers entertainment value for their dollars instead of getting a large audience to watch a new TV show. Sarandos continued:
“The profitability of the company is mostly driven on our international expansion and pace, not on the content specifically. People are finding value in how we are spending our content dollars by watching that content. We don’t think about it as domestic or international. We think of it all as different flavors of global television. If they watched it today or three days from now or seven days from now, it doesn’t really matter, but if they are not watching, they will quit.”
Netflix's business model is very different from broadcast networks because the streaming service tracks subscribers and not viewers for advertisers and marketers, which is why broadcast TV is free with commercials instead of paying $8 a month for content. So it's in Netflix's best interest to cast a wide net to gain the most subscribers and offering original and thought-provoking TV shows will certainly keep people from canceling their service.
“You can cancel Netflix with one click. Try calling your cable company and getting rid of a channel you are not watching,” Sarandos concluded.