The Data that Determines What We Watch

Welcome back to the Board Coast Hollywood. My name is Sunny Von from Culture Editor at the Bulwark. And I’m very, very pleased to be joined today by the entertainment strategy guy. Now, the entertainment strategy guy, some call him mister strategy guy, some call him the ESG. You know, it depends on what you what you wanna go with here, but I’ll I’ll leave that up to him.

I’m excited to have him on because he is the number one guy for deep dives into stats on what people are watching on streaming and kind of why that matters, which is obviously a very important topic for the world of entertainment at this moment and we’ll be going forward. You can find his worker at the Ankler, you can find his work at a sub stat entertainment dot sub stack dot com. I think is that is that right?

That’s correct.

You got you got entertainment dot sub I feel like that’s a big one. I feel like that’s you know, getting max dot com twenty years ago and selling it to Warner Brothers for twenty million dollars or whatever. This Yeah.

When Substack was going in twenty nineteen, People are like, you have to have a newsletter. And I’d had a blog in a previous life a long time ago, and there really was no way to monetize it. So I hopped on the sub stack thing. And when entertainment dot sub stack was available, I was like, yes. See, let’s go.

I think people will search for that. So I was like, happy to have it. Yeah.

That works. Alright. So let’s let’s get started here. Alright. So the again, the the reason I I wanted to have you on here is to debunk a very common thing that you still hear as well.

I mean, I still hear it, but I talk to I talk to, you know, common folks every day. But you’re you’re talking to industry people and you hear things like, well, there’s no streaming data. There’s no Nielsen ratings type thing. So how are we supposed to know what people are watching? But that’s wrong, isn’t it?

Yeah. So I was actually to I’m sure we’ll talk about the anonymity thing at the end or just leave it, you know, just leave it mysterious. But I was actually in a party in Christmas time. And I’m so anonymous that even a lot of my friends do not know what I do because especially in Hollywood, if, like, two people know a secret, then the whole town knows it. So I’ve, like, tried to keep that you know, on rap.

And at this party with the number of people who worked on number of streaming shows, ratings came up and people said like, yes, the the streamers know, but no one else knows what ratings are. And I was like, well, what about Nielsen regular reports? And one person was even like, they don’t publish a a regular top ten list. But just funny for me, obviously, because like, that’s what I analyze nearly every single week. So the point is we absolutely have streaming ratings now.

I actually like to tell people that this started in twenty twenty. I called the streaming ratings era and essentially everything else with you know, before streaming ratings era because that was when streaming hit critical mass so that all the analytics companies could build panels of sizes that were large enough to actually be pretty confident that their results are statistically significant. And so Nielsen started publishing a top ten list that year. By the start of the next year, they started publishing three top ten lists of what people are actually watching. A number of other companies are now joining them They range from, like, show labs by plumb research, companies like digital eye, Samba TV, a whole host of other ones that are actually too numerous to mention.

And there are a ton of streaming ratings. I even have an article up on my website from last year when I launched the Paywall. We have streaming ratings now. Because we have this, and it actually matters what people are actually watching.

So let’s talk about why it matters. Because I I think that’s a you know, that’s that’s a argument, again, I have with normal readers and viewers and that sort of person all the time and they’re like, well, why do why do I care what people are watching? And maybe you don’t. There’s no reason for you to care. But what does better with the before the companies with the companies matters because that’s what we get.

That’s what we get more of in theory. Right? Or is that not how it I mean, is it is it just important to know for the oncoming advertising boom that we’re about to see in the streamers?

Well, I think to start with the advertising boom, that is absolutely where Nielsen started their enterprise. It’s sort of why it matter why they exist was because at a raw level, they had to know that if Coca Cola paid for a slot, they need to know how many people actually watch the slot to, like, properly pay n b c. So it was on both sides interest to have it aligned exactly how many people were watching it. That logic will come roaring back into the future. I can’t see a world where doesn’t come back because if, you know, in the future where people are selling advertising like Netflix with their big announced five million users watching it, whatever that means, it matters how many people they’re selling to.

So the ratings will absolutely come back from that standpoint. But the second reason it matters is because like you said, while there’s a lot of discussion about what people watch and how there’s like it seems like it’s really complicated for what’s why streamers, renew shows, or what works to drive. At its basic level, entertainment works the way it always is, which is things that are more popular drive all the other business metrics. So if you have something that people are watching a lot of, the reason they are likely to stay subscribed to your streamer or they are going to join your streamer is to watch the things that are very popular. And that comes down to a basic dollar and census.

If you make more things, that more people watch. You can make fewer other things that people don’t watch and you’re more likely to make money. So all the metrics that the streamer collects about viewership, how many unique households are watching it, how many how long they’re watching it for TV shows, how many episodes they watch in a row. All those things contribute to the customer’s behavior. And at a basic level, all the streamers can tie those behaviors to the metrics like, are they resubscribing?

Are they new subscribers? Things like that. But, you know, the streamers only have that data for their own platforms, they don’t have it for other platforms. And so that’s also why these ratings matter for everyone is because that’s how they get insights into the other streamers to see how competitive they are. And then everything flows downhill from there.

So when talent is renegotiating deals, if your shows more popular, you should obviously get paid more because you’re generating more value. The streamer won’t necessarily tell you exactly how well things are doing when shows are getting sold to other platforms, they matter. So basically, If you wanna know if shows you like or not from like a customer like from a very like I don’t work in the industry perspective, whether or not your shows are gonna come back or based off how popular they are. For everyone in the industry, we’re just returning to the era we were say, twenty years ago or even say ten years ago where ratings determined what got renewed, what got canceled, what got made, what did it.

Well, and so what are what are the what are the companies actually looking for here? I mean, that’s the big question to my mind. I I and it it I guess it depends on it depends on the actual streamer. It depends on the size of the streamer because it’s hard to compare a hit on Netflix to a hit on Apple DB plus or, you know, Paramount plus. But what are what are they actually looking for?

Is it completion rates? Is it, you know, just total numbers watch? What are what are we thinking?

So It’s a really complicated answer in full disclosure. I only worked at one streamer. I could get insights and feedback from what I hear from other things I worked at one streamer, so I saw their perspective. So I can’t speak for everyone. What I can speak for though is two points I like to make about this.

One is that the streamers think everyone wants it that the streamers have like sort of one golden number and they’re like, oh, that’s it and that’s what they look for. And at one point in time like say to go back to the broadcast TV analogy, you’re raiding during your time slot back in like the nineteen nineties. That was the one number. You know, if it was really really big, you kept getting renewed. If it was lower than all the competition, you probably didn’t.

Some other things went into it, but it was pretty simple. Problem with the problem which is not really a problem, it’s actually a good thing to have. The streamers have so much data that They can really have a a really holistic look at everything. So usually one streamer is not looking at one thing, is you can look at a couple key metrics and those are probably the biggest drivers. But and here’s my big caveat that I like to put out there into the world is that If you know just say one number which was viewership of a show, almost every metric that is out there in the world is highly correlated with that number.

So, to bring up the example of a show like Wednesday, Among the first seasons that Netflix debuted on their platform, no matter almost any metric they could choose to track I would guess that Wednesday was the biggest in that metric. So when you say hey, the number of show the show that drove the most new users, I bet it was Wednesday. Because the the the viewership was just huge. The number of unique households probably Wednesday. Completion rate probably Wednesday.

Rewatch probably Wednesday again because when you the all those numbers are really correlated and when you have hits that are outsized like that, they really tend to like drive that. But when it comes to renewals, the one other piece that really impacts all this is the cost. Because a show can be smaller but if it’s not as expensive, it justifies having lower viewership. So there is that multiple. And so basically, when a streamer is looking whether or not they’re gonna renew or cancel, they’re really looking at a range of variables that are all sort of derived from viewership.

If I had to pick two for TV shows, completion rate and either say unique customers or total hours viewed. Some combination between those two gives them an idea of how well this is doing compared to everything else. And then you balance that off the cost and determine whether it is getting a good ROI for you. With two other like caveats which is that certain shows are made definitely to win awards. And get critical acclaim.

And if some shows have a big enough critical acclaim, even if they’re not really that well watched, that can save them. And then internal politics always plays a role as well. And that some creatives just love a certain show and even if it underperforms gonna have to say another show, if they just have a better relationship with the creators or they just personally like it, it gets renewed. So

Yeah. Well, the so so it’s just like TV. And in the the old it’s it’s this is this how things have always been, except more more data.

Yeah. I would I’m it’s funny because on a lot of things when I write about strategy and I don’t talk about my politics much, but I’m pretty moderate on a lot of things. But I tend to be kind of in a word conservative about these things and I’m much more willing to say even in streaming, most things are the same than they are different from what they were before. And so, yes, streaming. We’re using different numbers.

We’re talking about unique households, incompletion rate and things like that. But at the end of the day, the question is, do we think this show is watched by enough people that it will drive them to renew their subscriptions or come into the system versus its cost. And for a few years you know when there was a streaming boom some of those things got obscured but that’s still basically what’s going on.

Do you think that the streaming boom was ever going to be sustainable. I mean, I I you know, we we live through this era of peak TV and not just peak TV like peak peak TV like an insane amount of television so much television that no reasonable nation could ever consume all of it in a in a substantial or meaningful way. Was was that just was that just crazy zero interest rate money phenomenon or what

are what are what are was that

how could that continue? And if it doesn’t continue, what does that actually mean for the industry writ large?

So I do think it was a bubble and But if it wasn’t a bubble the best way to describe it is it it really was two revenue streams competing at the same time. That happen to both be going up or at least one was going up very high faster than the other one was going down. So this is what I I try and talk about streaming a lot is that since Netflix was always described properly as a disruptor, they’re disrupting linear TV bundle, but disruption fundamentally means the previous thing does not keep existing. That’s why your your you know, bullying in. You know, from two thousand eight to say twenty seventeen, both like people had linear TV subscriptions and you know for a long time more people had cable than had Netflix or the majority of Netflix subscribers phrase another way also had a cable subscription.

So it really was accretive there. But you know, as cord cutting has continued, that is like going away. At the same time you had multiple entrance coming in at the exact same time, making a lot of shows for launch. And streaming I I one of the big contentions I have, I think we’re seeing a lot of the data. It does not have as good of economics as the pay TV bundle of old.

And a lot of that is because pay TV had a lot of local monopolies, and that’s very valuable having local monopolies. Like if you only have Comcast is your only cable option. They can charge quite a bit you know for this access to pay TV. So Since streaming won’t have as good of economics and it was growing right at the same time the linear bundles decaying, One of those two things have to go. I think it’s the biggest worry for Hollywood proper right now is that if you were making six hundred English which TV shows that were scripted and that goes down twenty five fifty, a hundred, a hundred and twenty five shows.

Like, I don’t know where it ends up. That has huge impacts for whether or not, you know, with the total size of the industry, basically.

I one thing I think about a lot with regard to streaming, and and the way spending on streaming works from from the network side of things. Is why Would any of these companies ever make movies when they can spend a similar amount of money for content that eats up, you know, five times as much time. So instead of a two why would you spend a hundred million dollars on a a two hour movie when you could spend a hundred million dollars on probably three eight to ten hour TV shows. Right. Like how does that make sense?

The when it comes to a lot of things that I hear in the streaming wars, there are a lot of like aphorisms or sayings that I don’t think hold up to scrutiny. In this case, I think this one does hold up to scrutiny, which is the idea that a TV show is great for retention. So someone comes on They start watching. They’re there for ten weeks to watch the show. Even most binge shows on Netflix still take a week or two for people to finish especially if they’re ten episodes.

So the retention piece I I really think is real. So then the flip side of that was always that movies or what bring people in because they’re bigger budget, their higher profile, so those are attracting people to the service. But what you’re keen getting on is a hundred million dollar movie can it bring in as many people as a hundred million dollar TV show, especially if the marketing budgets are roughly the same? And I don’t think they are. In my experience, the main way that those movies draw people in is because they are theatrical experiences and theatrical movies have always had fantastic second lives theaters because as I heard you talking last week or a few weeks ago with like Scott Mendelson.

Essentially, the theatrical run acts as a giant marketing campaign for the film, and that’s what drives the value. So if your question is, could streaming films without Out theatrical runs have those same impacts? That math doesn’t actually really work for me. It’s something I’ve been writing about on my website for a few I wrote at the beginning of the month. So

Let’s Alright. I want there there are two separate things here I wanna key on. Okay. And I’m gonna mention them both so I don’t forget. We come back to them.

First is a binge model versus week by model.

Okay.

And second is theatrical versus straight streaming. So let’s let’s do let’s talk TV first and the binge versus weak week to week model. What do you see? One of one of my favorite little data insights from reading you for the last, you know, couple years here is the idea of the binge model curve. This, you get a you get a you get a small, a little a little bit of audience for the first week because usually a show or at least was the case, debuts on Netflix on a Friday.

Right. And then the second week is a big week, and then there’s kind of a a steep slope down. Right. As people people wrap it up. Now obviously that’s not the case for all all shows, squid games for instance had a much larger a much longer curve.

It also had a tiny opening weekend. It was funny because no one watched it the first weekend. Yeah.

Right. It it actually built. That was an actual genuine word-of-mouth hit, which you don’t get a lot Netflix, interestingly. But the but the but anyway, what what do you see in terms of in terms of both total audiences and growing audiences and keeping people on the service. Which of these models works better?

From your from your perspective.

So from my perspective, I’m definitely if you could say team weekly Though when it comes to any business decision, actually, if I have a a team, I’m team, do strategy first. And don’t just copy what other people are doing which sounds really cynical but in my experience and like observing the industry I think a lot of people, to be honest, a lot of streamers were like Netflix does binge. We do binge and we’re like, well why? It’s like, Netflix does binge can’t get fired for copying what the most successful person does. Super cynical but a man that happens a lot.

So I’m definitely team weekly because for me running the finance numbers of it, if you can have one show And it and you’re able to launch the show and for ten to twelve weeks, it keeps someone coming back to your service week after week. Then instead of having to have three shows coming out every single month, you can have it more spaced out and that’s just gonna make you more money along. That’s gonna be a more efficient use of content spend. My tentative prediction of the industries that we’re gonna see more of those things going forward because cost consciousness is coming to a lot of the streamers. I will always put a caveat which is that Netflix has done very well not doing this.

And I can’t argue too much against them because they do have the success metrics. But the one thing I will note is that a lot of the smaller streamers, especially the ones that started binge have started to go weekly, prime video being the biggest one. They don’t do it with every show, so it does show that they prioritize which ones they think will have extended runs. But they are releasing shows weekly where they think or what I would call pseudo weekly, you know, three episodes, three episodes, three episodes in a finale, which I’m also okay with. I think it like builds it out.

Again, while I think there’s this narrative that everyone binges everything. Actually a lot of people still watch one or two episodes a night because like say they have kids, they can’t watch for four hours. They’re watching one or two hours after kids go to bed. I would also add with Netflix, we’re seeing more and more data that they are definitely breaking shows up into smaller and smaller pieces. We saw that with I’m doing this off top my head, but it should remember correctly.

Ozark had two parts. We also have

—

Yeah. — stranger things last year had three episodes that were like each, I think, five hours long. Drop on like July weekend. We’re gonna see that with the witcher this year. Netflix is also doing something which I think is very funny and this is like how ratings impact the real world.

They are now dropping shows very often over to earnings periods. So it’s like, oh you enjoyed this witcher that started in June. We’ll stay for July right when our earnings call and right when we’re gonna introduce password sharing. So you’re seeing some of that. Do they break them up and even smaller?

Tough to say. I would say the data on the binge versus weekly along with the strategic considerations, is not as clear as the theatrical versus straight to streaming releases. But in my mind, I still think it supports weekly, and I know I’m talking too long now. This is my first podcast. So I’m gonna use that excuse

No.

That’s great.

But love is blinded the same thing where when Netflix releases reality shows binge, and a lot of the other people like who Lewis had some examples peacock. Like why would you release a real reality competition show with no chance for the social media to build up about what is doing it and their most successful show by far which is in my last streaming ratings report which is public for all. You can see that Love is blind did not have a binge release curve, it actually built its audience over the four weeks or five weeks leading into the live reunion show.

Well, I mean, look, this is and again, we’re we’re gonna get theaters here in in a second. My hobby horse, I love to ride it.

I think they’re on the horse together. I know that sounds like phrasing, but We’re both on that horse. Yeah.

We’re we’re we’re it’s a, you know, it’s a it’s a it’s a western. We’re all we’re all on the horse together. But the but with the the the weekly release model, I mean, the key the key evidence to my mind that Netflix is at least reconsidering partly how they do it, is just the as you mentioned, splitting these big shows up into two halves which essentially allows them to keep people through two or three discreet billing cycles. Is a is a huge sign that they are worried about churn, that they’re worried about keeping people who are are are just hopping on for, you know, the the new season of Ozark or the new season of Stranger Things. And it suggests to me a real weakness in the binge model.

Yeah, I think that’s I think that’s the case. I would also add this might be my next big tarp topic after I finished what I call the future of film or the streaming versus theatrical debate. But there is also I think interestingly a lot of there are is survey data on the Pinterest weekly question and what I find funny is a lot of times it’s basically fifty fifty, so it’s kind of a coin flip. And that some peep like half of people love being able to binge it right away. Half of people like weekly because you know, there’s definitely a thing now if a show drops and you’re like, man, I have ten episodes to watch of that versus say like, oh, hey, there’s only one episode of Andor that’s new.

Okay, we can like we can keep control of that. So I think — Yep.

—

is a question is sort of split how people how customers actually feel about it. But I definitely think that contributes to it. So yeah.

Yeah. I I mean, I’ll just say from my own perspective, look, I, you know, I remember the first seasons of how of cards and being very excited. We’re gonna watch this whole season in one weekend. It’s where you’re gonna stay up till two in the morning. Watching four or five new episodes.

You know, look then I have kids and it’s like, well we can watch. It’s gonna take us a couple weeks here to get through the new season of Stranger things. Because we can watch one of these ninety minute episodes and I and that’s that’s about it. And maybe like one every two nights frankly. It’s not not us.

Alright. So the the big question then in terms of strategy right now is theaters versus straight to streaming. And you had a big you had a big piece. You got a big piece up on your site breaking down a bunch of different ways of looking at this. But the the top line data, the top line conclusion from the data, I should say, is that on the main with a big release you are better off putting it in theaters first and then on streaming.

Right?

That’s That is the conclusion. Although, because like I’m a data guy and I’m always trying to do the thing where I like don’t over hype the conclusion, like be very specific about the data I pulled. The the main question I looked at is is viewership larger if it goes straight to streaming or to theaters first? And then I tried to account for as many variables as possible. And the basic conclusion is that the viewership is higher if it goes to theaters first for a variety of reasons, then if it goes straight to streaming.

I tested this primarily talking about movies that came out in twenty twenty two but also looked at some past years as well. I separated out by streamers. I tried to separate it out by genres. And overall, for the most part, there were examples where if you, you know, I forget off the top of my head, but there were definitely some examples of certain genres where it’s like, oh, hey, look, it wasn’t actually like the straight to streaming films outperform. But usually the sample size was small.

So I looked at the viewership. Now the other assumption I go into this with, and some people have disagreed with me but a lot of the super streaming Bowl cases, you know, for the people who are super pro streaming that it’s gonna be this fantastic new business model have not borne out. One of the things I really try and clarify is If you believe that a film on streaming has has some sort of intrinsic value to it. So customers know that it’s only on Netflix and it’s only streaming. So perhaps they value watching it, you know, more because they know it had never been on in theaters first.

I don’t I don’t think that actually bears out in real life because again, in my mind, viewership is viewership. So if more people watch something, They tend to value it the same. They don’t have some implicit value to it. And so if viewership is greater if it goes to theaters, And if those films go into theaters happen to make several hundred million dollars above what their p and a spend was, then it just makes more sense to do that because you make more money. And there’s also a lot of financial implications that I could try and describe that go into that on top of it and I’m gonna keep writing about on my website and have written about honestly for like years now.

Yeah. Well, I you know, the this is so there there are two ways of looking at for my mind. The first is, okay, what is what is causing the bump and they they both have to do with the same basic questionnaires. What is causing this bump in viewership? K?

Right. So the the first idea is if you put a movie in theaters, you spend a lot of money advertising it, and people recognize the thing that they’ve seen ads for either, you know, on TV or trailers in front of other movies or whatever. And they’re like, okay, this is a thing I wanna see. I wanna see it in theaters, but when it when it hits Disney Plus, I will gladly watch, you know, the Ant Man and the Lost Point of Main. Okay?

Right. And and the the second the second way to look at this is putting a movie in theaters is a signal of quality to audiences. It’s it’s a way for audiences because we we are all flooded with content all the time. We are we are we have to rely on our own mental heuristics to decide what is it worth me sitting down and trying to spend two hours to watch tonight? And a thing that I know from the world of from the world of VOD or straight to DVD movies is the there was a strategy that a lot of smaller film companies use to essentially for Wall a movie in in theater, which is which means for folks don’t know, which means they would pay the theaters to to play the movie.

When they did this, they can then advertise it in the Direct TV or, you know, Comcast, VOD, whatever, now in theaters. Right. Box. Yeah. When when people were trying to make pay per view purchases.

And that always led to more more purchases and a higher dollar amount being able to be put on those purchases. So I’m I’m curious from if you have any sense from the data which of these two factors makes more sense. Just the advertising, the mental heuristics or probably a combination of both, I would assume.

I do not, but I would actually take the second one and do a quick twist. First, I actually think most of it is the marketing. I think that is really one of the big drivers here. I know, again, you guys talked with about the air example. Like, can you essentially pay for the p n a on a movie?

And and develop an extra awareness and I’m actually really excited in four weeks when we get the Nielsen data and the show labs data for me to actually dig into the NTV times data to dig into it and see how well it did and see if it, you know, supports this thesis that I made with that. So I think a huge amount of it is the marketing campaign. I would say that’s also particularly big for kids films. And that, you know, a lot of people talk about kids films and they say like, oh, you make a kids movie so you can sell all the merchandise. Well, right now this year the film that will win the kids merchandise battle is Mario.

It’s Mario, it’s Mario. Tomorrow. We’ll see if anything else can do throwing it but it’s gonna be Mario. And that’s tied to it’s doing very well at the box office but also it was advertised everywhere. So they like go hand in hand.

Okay. So what I would also say about the it being in theaters having a quality issue, I definitely think that was a factor back in the day. I’m not as sure it’s as big of a factor now, though I think it’s still there. But what I would say is that the type of films that, you know, thrive in theaters which are often bemoaned, giant franchise, blockbusters, either superhero, science fiction or kids animation, which I think gets kinda neglected in there. The other thing that ties all of them together is they are very expensive to make.

And that fact does not change. And so one of the things is that if say the theaters as dead crowd was correct and theaters were on their way to oblivion in two years, My main prediction is that the two hundred three hundred four hundred million dollar films were just not would cease to exist. Because you know we’ve even had rumors out of you know Netflix. This happened what three years ago. The films that were some of their most viewed could not support budgets above a hundred million dollars.

So I don’t know if there’s an intrinsic quality or if customers know and I think you can tell of the animation that the animation of Super Mario Brothers in a lot of cases looks better than a lot of the other kids films that are on Netflix because it costs more. And theatrical along with a, you know, home entertainment window allows you to recoup more of those costs before they then go to streaming in other windows.

Yeah. I mean, this is the other big strategy question about streaming that has never has never it it’s a thing that drives me a little bit crazy because I look at streaming and I see a way for the studios to recoup money that they lost when DVD went way. Mhmm. Like that and instead everybody at the studios looked at streaming as a way to be the next Netflix And, like, there’s only one Netflix. Netflix has a lot of advantages, has a lot of first mover things, whatever.

The idea that Warner Brothers discovery could be, you know, generating eighteen billion dollars a year off of HBO Max or Max or whatever they’re calling it today, is strikes me as insane.

Right. I absolutely I think that’s also how streaming started was I have a chart in my streaming verse theatrical films. I’ve used this chart multiple times where I basically, you know, when I have an explaining article that’s free for everyone out there on how future how films are financed. And it basically shows all the windows and you have all the windows in one stacked bar chart. So imagine like thirty percent is like, you know, domestic box office, another chunk is international than home entertainment.

And I’m using making hand gestures. I realized no one can see except for sunny. But then I have two lines that go to streaming. And now it’s bay and with a tiny little sliver for merchandise. And that was basically what you’re describing is what people’s pitch was as we take all these successful windows and we move them into one and we assume that one window will be bigger than all the other ones.

But not only that because I would actually go a step further. They also want to do that with TV at the same time. So this one window that’s supposed to replace all the film window is also gonna replace all the TV revenue at the same time. But unlike the cable bundle of old where people are locked into long term contracts, you know, you can drop a streamer at any time. You know, there’s multiple other streamers.

They’re all like cheaper. You can share it with multiple people. I would never do that but hypothetically, you know like have to streamers I use. I’m sharing with someone else, you know. So all that means that like not only is streaming in this one version gonna replace all the other revenue streams.

It’s also not going to make as much as the other revenue streams did except for maybe globally, if like Netflix, you can be first mover in a ton of territories around the globe. So, yes.

Drives me bananas. Alright. Let’s see. One thing one thing you write about a lot and I I it’s it’s a thing that I’m I love because it it confirms one of my biases. I love to have my biases confirmed.

That’s that’s really what I’m looking for. Whenever I read anything. I’m like, does this prove me right? But one thing I one thing one thing that you you’ve you’ve pinged on about quite a bit is that foreign foreign films and TV shows do not perform in the United States. They just on Netflix and let’s let’s isolate this in Netflix.

Foreign films and TV shows, generally speaking, do not perform in the United States to the level that domestic product does. It it does okay in the rest of the world but in the United States and the biggest Netflix market, these are more often misses than hit.

Yep. So is that right? Yes. Mostly right. I would I’d do two things because I would actually first to go against the American exceptionalism piece.

I think most countries this applies to. And it’s not that other countries around the world essentially don’t want want if if they have their preference, They would watch shows featuring people from their own country making jokes that are about their own country or things that they would expand. So most people’s preferences are local content in the first place, if they can support it. But then second to that, they’re willing to watch things from a similar region. So the example I am seeing in the data which I think streaming did evolve because I always like to clarify what is new, what is different.

Is that pre say twenty ten very few British shows actually succeeded well in the US. Right? We didn’t all watch the office. We watched the Office US version. Right?

There were some on PBS but until downton Abbey, they weren’t really like huge massive hits. I think streaming has shown that if people are speaking English, it’s much easier for that to break through in America. So you get hits from Canada, United Kingdom, Australia, a place like that and they tend to do well. But the further you get from similar languages, similar regions, shows don’t perform as well. So you know, a lot of shows that do well, you know.

And I don’t dive super deep in the data but I have seen I’ve seen some data on this like South Korean and Japanese shows tend to do well in each other’s countries. There’s similar enough culturally. Not the same by any means, I wanna pin with that brush, but it’s closer. Same with Latin American dramas can do well across like the Latin American countries because they’re speaking Spanish similar enough cultures. But to tie this back to the American piece, there in the early days of streaming there was definitely the assumption that we could that the streamers could go out and I saw this both from competitors and internally, we could go make a show in Germany or Japan and bring it to America and a ton of Americans would watch it and it just is not the case.

Squid game was unique and that it’s the so far only real squid game we’ve had. And by that, I mean, a show that was globally popular in every country of the Netflix. Touched. And squid game was unique and I have this little GIF I’ve been using now days since last squid game and we’re now like it seems crazy to say this but is it We’re on a year and a half since last squid game because the squid game was twenty twenty one. So we’re still waiting for the next squid game.

There have been shows that have been popular almost globally except in the US. Lupin is an example on Netflix, so is Money Heist. Money Heist just basically never got super popular. It definitely had some viewership and made the top ten list a few times towards the end. But it was never a number one show that’s like driving these ratings.

And I think it’s because, you know, ideally, if people can, they watch content in their own countries and then they watch giant shows from the rest of the world. But those shows have to be supported by a market that’s big enough to really make you know again giant blockbusters who can travel globally.

Yeah. I mean, and the other I you know, there’s a there’s a a cinematic component to this as well, which is that South Korean cinema is probably if you were looking at it it foreign cinema in the United States that plays in theaters and people watch, I would say South Korean cinema is is probably you know, the best example of that.

Right. And and I think, you know, there’s always been one idea I’m playing with is the idea that every film market is basically about the size of the country it supports, so it’s probably more tied to GDP. So we haven’t seen Until r r r last year, there weren’t a lot of Bollywood breakthroughs, but we might see more of those as they ramp up GDP wise. But South Korea, Japan, Hong Kong, I would all point to as examples where they did all have films that could break through, especially like their action films, actually based off one of your podcast recommendations. I just read the the John Wick Oral History book, and they have a whole history of action films in So there are always these films that can break through.

They can like, you know, have their niche audiences but very rarely are they truly like global sensations on the level of, you know, especially in the top, you know, twenty global films worldwide. They just don’t tend to travel that well.

One one thing I was kind of surprised by recently, and I think it was in your I think it was in your big piece about the benefit of putting movies in theaters was that r r r did not do as well as I kind of assumed it had on Netflix. Yes. It was a it’s a movie that, like, lots of people. It’s Indian blockbuster won an Oscar. At the Academy Awards for Bestong, I believe Bestong.

And and, you know, I I saw lots and lots of people talking about but was not actually well watched just in terms of number of hours, which again kind of surprising because it’s a three hour movie, you would think. Okay. Lots of lots of hours there to watch, but did not do as well as people might have thought. And my my question here is, If you it does does helping to understand the numbers. Should helping should understanding the numbers change our perception of what the conversation should look like.

Because I do think there is a a certainly amongst, you know, critics and and and cultural writers, there is kind of an assumption that what we are watching is what everyone is watching. Yes. And that is not the case.

Yes. I you know when you’re talking

about Tell me about succession and Ted Lasson.

When we were talking about ratings earlier, I almost walked you through my hierarchy of ratings, which again, I’m gonna just keep plugging my website because I’m, you know, that guy, apparently now.

Please do.

So for me, there’s tons of different services that are tracking whether or not stuff is popular. Right? And I use popular meaning like lots of people are watching it. At the top for me the most valuable is any service it is actually tracking viewership. Neilelson, those ones I listed earlier.

They’re actually tracking our people actually watching these things and they provide you one of those numbers. Below that, I have ratings which is you know how customers actually feel about something. For that, I use I m d b. IMDB absolutely has its own biases that people point out. Excuse very male, excuse young, excuse very like sci fi superhero genre animate us very well.

But it actually tends to be pretty accurate and if there were other better sources for ratings, I would use those as well. I’m actually debating using letter box. The other one then would be interest metrics. These are a way to measure not that someone actually watched this but were they interested in it. Google search traffic was with the first one I used.

A lot of services allow you to track where shows are. And like TV time which I use every week just watch is another one so is real good. So those are the three pieces of are things popular, and you can use some combination of those. Actually, Wikipedia page views is very useful. Because it’s a good sign is someone actually using this.

For theatrical films, you just said David Heron from the Quorum on. I love their stuff because they’re serving people. So are they aware of this? Really good predictive stuff. Cinema scores well, I also like them.

And then I’m gonna stop talking. That’s all I use. You’ll notice what I did not say. I did not say social media. Because to go back to, you know, the nineteen third or nineteen forties when do we beat Truman or in nineteen fifties, whichever one that was.

Right? Larger sample size does not actually make it. If it’s unrepresentative, the more people does not make it more representative. Social media is that in a nutshell, which is that None of the social media platforms reach everyone. The conversation on them is really geared towards people who are social media all day which tends to be people who are on their computers all day which tends to mean white collar workers and fill in the Bulwark.

Right? So I tend not to use social media. Now that said, when it comes to the conversation, when it comes to what drives clicks on websites, in a lot of cases you know, companies know what drives clicks on websites and it is some of those shows like secession, people watching recaps or some of those buzzier shows or r r r. So if you’re using that to guide what you think is gonna be popular, I’d absolutely say go for it. But where I try and draw the line is, we should not substitute that conversation for this show is really popular because I see that all the time.

Netflix just canceled this very popular show. What’s wrong with Netflix? And then I looked at the data, I’m like, actually, the show wasn’t that popular. Now that many people watched it. So we shouldn’t get outraged because it just wasn’t that popular.

Read my streaming ratings report and we’ll put into context and if a show is you know, very low and very expensive. What was there was the big comic book show Netflix had last summer. Actually pretty popular, but was it popular enough to justify the budget? Probably not. Prime Video was That

was the Mark Miller one

Yeah. The Mark Malar one. What was it Jupiter or something? And then we’re gonna see

that I think

we’re gonna see it with citadel coming up. I’m super eager. We know that. In some cases with second only to the Lord of the Rings Rings of Power in terms of Budget. So that’s absolutely gonna be a question like is it actually popular?

Now, I don’t actually see a ton of conversation about it but that doesn’t mean it’s not popular. An examples on that would be Reacher on prime video last year. Just a huge opening no one saw coming, not very talked about on social media but very very popular, you know.

Yep. Yeah. Reacher is a fascinating one because I, you know, it was it that that kind of came out of nowhere and that had it was Amazon did it a binge release model, so lots of people just sat down and kinda watched it over a week or so, real real good dad programming. You know, I I I can’t remember if it was you or somebody somebody somebody joked that Amazon has been trying to search for their brand. They don’t know what it is, but their brand is like, his dad shows.

It’s reacher. It’s the terminalist. You know, it’s it’s that sort of thing. That is what, you know, that is what is driving their their hits. And they seem to be kind of running from it which is which is odd but neither here nor there.

Yeah.

I would more say prime video I find one of the fun channels especially now because I have some insight into their Amazon freebie now with my show labs data. And that service does really well but it’s all ad supported. It’s all these shows like Judy Justice, which again no one talks about judge Judy, like there’s zero conversation. But I bet if you could track everyone’s dads emails, it’d be there’d be a ton in there, you know. And that’s that or their text messages get their text messages

— The text to the —

with the font, like, huge right And see, I’m anonymous. So my dad doesn’t know I’m saying this. Right? And he’s like they’re like typing and they’re sure it’s huge in their reach or two where they’re like, oh man, you see this reach or guy? Oh, it’s awesome and Bosch.

They’re like

— So go —

they love Bosch.

Bosch. But

the larger thing larger thing with prime video, I just its strategy is funny because They are still I think in a lot of cases trying to be like Netflix where they’re trying to be something for everyone. I actually do you think the dad lane has an opening? I would also say, and I wrote about this earlier this year, my big question and I would still this would be my advice for any of the streamers is Do not look at who the cord cutters already are but the next generation of cord cutters. Like if broadcast TV works because it’s CSI and Chicago dramas, Should you make more of those or less of those on streaming like what will actually entice people over and so I have always in my eye on Paramount even though, you know, its market capitalization keeps going down, but they released a seal team spin off and then another reboot of criminal minds and those shows on some of the interest metrics stayed on the list for like weeks. So something interesting.

Yep. Yeah.

Well, that was that was pretty much everything I wanted to ask. What do you think folks should know? What I always like to close these interviews by asking what what people should know, what I should have asked, what I failed to. What do you think people should know about what you do, the state of data, anything. I’ll

I’ll throw a topic that maybe we can talk about if, I’m fortunate enough to come back on. I’ll relisten this, see how poorly I did or or well. But Great. The topic for me which I still think like no one’s working on and I don’t write about enough. So like I love to like throw shade like why don’t we talk about this more and people could be like, bro, are you talking about this?

And that is I think piracy. That’s still the one I I know that’s one of your hobby horses as well. I would Like, I could tie it to almost every issue in entertainment right now. So it’s like we could almost throw out streaming and all its disruption and just say, did digital disruption also just massively boost piracy. How many people are actually doing the pirating And how much does that actually decrease the overall take home revenue for all the studios and it’s like, you know, The one issue we obviously didn’t bring up, we only brought up a little bit, it was like the w g a strike right now.

It’s like, well, if all the entertainment companies were making thirty eight billion extra in revenue, which I’ve seen projections that are that are actually even higher than that. If they’re making thirty extra billion, Would that be a bunch more shows they can make or could they, you know, choose to spread that around and keep shareholders happy or offer lower prices to customers And piracy is the one issue, like I’ll I’ll just keep bringing up because in some cases it seems like insane to me that you know, Reddit or the latest one I saw is that whole copies of Mario were showing up on Twitter. Right? That seems — Yeah.

—

insane to me, that that’s like legal and allowed them and understand if you overcorrect you can have copyright notices going around everywhere. But right now, it seems like everyone’s like, well, who cares because we’re making money off it? So piracy is the one that I think impacts all of this if you had less piracy with the home entertainment market be a little bit stronger. That is very high revenue streams for the studio, so then would you get more of those movies because they’d be able to support over and so fire seat. That’s the that’s the one for me.

Yeah. And we will that is as you said, as you mentioned, another of my hobby courses that I will happily ride. But that is all the time we have for today. Thank you mister strategy guy for being on the show today. I really appreciate And again, that’s entertainment dot dot sub stack dot com.

I’ll link to it. In the newsletter with this with this post, everybody sent sign up for his newsletter pay him money to write because that if you know if you don’t pay for the things you like, they go away. So you also piracy. Alright. That is it for this week’s show.

Thank you for listening. I will be back next week with an episode. We’ll see you then.

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