By Joe Flint and Ben Fritz
When asked recently if she knew how many people were watching
the comedy "Unbreakable Kimmy Schmidt" on Netflix, co-creator Tina
Fey said she had no idea.
"We don't have any actual numbers," Ms. Fey said at a recent
gathering of television critics. "I feel a lot of people are
watching the show. Let's go with that," she cracked.
Netflix Inc. is notoriously secretive when it comes to sharing
such information--be it with content providers, the media or Wall
Street-- arguing that since it doesn't have advertisers to please,
ratings for its subscription streaming service are irrelevant.
But now Hollywood is getting its first real peek inside the
black box of online video streaming. In recent months, measurement
specialist Nielsen has been scaling up a program to track viewing
on Netflix and other online services like Amazon.com Inc.'s Prime
Instant Video and Hulu. Nielsen said it is now tracking nearly
1,000 shows.
Most major TV studios are receiving detailed readouts on how
their own programming is performing, including the total viewers
for any episode and basic demographics like age and gender, Nielsen
said.
For media giants including Comcast Corp.'s NBCUniversal, Time
Warner Inc. and 21st Century Fox, the new data could give them more
leverage in their content-licensing negotiations with streaming
services, especially industry giant Netflix. When shows perform
well, they will know to push for higher fees when deals are
renewed.
At the same time, if the data reveal that Netflix's original
content isn't as popular as its acquired programs that could be a
concern to Wall Street, given how much the company has been
investing in its own programming.
Netflix has been dismissive of Nielsen's efforts, noting that
the company still doesn't provide ratings for content viewed on
tablets and phones and that its numbers wouldn't include viewing of
shows outside the U.S.
There are limits to the media companies' bargaining power.
Despite their misgivings about Netflix--and its role in drawing
audiences away from traditional TV--they have clocked robust
revenue growth from their licensing pacts with streaming companies.
Streaming services including Netflix, Hulu and Amazon will spend
$6.8 billion this year buying reruns of TV shows from networks and
studios, estimates David Bank, an analyst at RBC Capital
Markets.
Netflix does shares some viewing information with select
studios. Studios that do large content-licensing deals with Netflix
have been able to negotiate for data such as the number of times a
show has been streamed on a monthly basis and some tracking info to
see how a show is retaining an audience over multiple episodes,
people familiar with the matter say. But Netflix doesn't provide
demographic breakdowns or how many people watch any individual
episode.
Some major suppliers said they don't get any information from
Netflix, and expressed surprise and disappointment that competitors
do, since Netflix's mantra has been that it doesn't share
viewership data. Amazon and Hulu have a similar approach to sharing
data with program suppliers.
A Netflix spokesman said the data that has been shared is "very
limited" and said the company isn't sharing any data on Netflix
originals, including shows produced by the major studios. The one
exception was Twentieth Century Fox Television's "Arrested
Development," the spokesman said. (Twentieth-parent 21st Century
Fox and Wall Street Journal-owner News Corp were part of the same
company until mid-2013.)
For now, Nielsen is sharing only data on shows with the studios
that own them and that pay for the information. Over time, the
company hopes to "syndicate" the data widely in the industry, so
studios can compare their viewership against others', further
aiding them in negotiations.
Nielsen is measuring streaming viewership through the same
sample of more than 25,000 U.S. households it uses to measure
traditional TV ratings. Studios provide Nielsen with digital files
that allow the measurement company to scan for audio fingerprints
of shows and log viewing data. Nielsen can measure any show a
studio has produced, including originals created exclusively for
streaming services.
The data provided to studios doesn't specify which streaming
service a show was on, but studios can deduce that since they
generally have exclusive tie-ups with streaming services for
certain periods.
Not everyone is thrilled with the early results from Nielsen.
One studio executive said the Nielsen samples aren't wide enough
and don't capture viewing from tablets and mobile devices. Nielsen
is planning on including such measurement in the near future.
Competitors to Nielsen in this area are emerging, including Luth
Research and Symphony Advanced Media, both of whom offer viewership
information on subscription video services.
In addition to whatever data can be obtained from outside
suppliers and Netflix, some production companies have tried on
their own to gauge what's working on the service and what's
not.
A common approach is to closely monitor Netflix to see which
shows it is promoting to get a sense of what is popular. One studio
executive said he has multiple researchers who often devote several
days a week watching the home page of the streaming service.
If a show is being suggested for a month, "it really tells you
something, " the executive said.
Another dead giveaway is when Netflix calls a studio,
unsolicited, seeking shows similar to one that recently started
streaming.
Then there are the old-school Hollywood ways to get information,
such as hiring people who used to work at a streaming company or
swapping data over cocktails.
"People do talk," said a studio executive. "We go to lunch. We
go to dinner. We drink."
The data the studios are getting doesn't yet appear to be
trickling down to show producers, actors or their agents, limiting
their ability to cash in on the popularity of a Netflix series to
grow their career.
"This is most important psychologically," said one prominent
television agent. "Creators want to know who, if anyone, is
watching and enjoying their work."
Write to Joe Flint at joe.flint@wsj.com and Ben Fritz at
ben.fritz@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 26, 2015 19:20 ET (23:20 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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