Netflix has more than 130 million customers watching its TV shows and movies. But for years, it refused to tell outsiders how many of those customers watched any particular show or movie.
Now that’s starting to change.
At the end of December, Netflix said that 45 million people had watched Bird Box, a Netflix-owned thriller starring Sandra Bullock that came out just before Christmas. Now the company is using its quarterly earnings letter to share more numbers about viewership of some of its other shows — as well as a sense of how much of your TV screen the streaming video company really owns.
- Netflix says that Bird Box, which was released late last year, added another 35 million households in the first four weeks after its release, bringing its total audience to 80 million households. (Netflix defines a viewing household as a Netflix account where someone has watched at least 70 percent of a movie.)
- Netflix says that both You, a young-adultish thriller, and Sex Education, another show with a young-adult bent, should each reach 40 million households in their first four weeks on the service. (For TV shows, Netflix defines a viewing household as a Netflix account where someone has watched at least 70 percent of a single episode of a show.)
- Netflix also wants to emphasize its ability to deliver stuff to audiences around the world, pointing out that Elite, which comes out of Spain, reached 20 million households in its first four weeks, and that Bodyguard (the UK), The Protector (Turkey), and Baby (Italy) all reached more than 10 million households in their first four weeks.
- Perhaps most intriguingly, Netflix estimates that it now accounts for 10 percent of TV screen time in the US. (Its math here: Netflix says it streams 100 million hours a day to TV screens in the US, and it figures those TVs — which include more than one TV per household, plus sets in bars, hotels, etc. — are on for a billion hours a day.) Netflix says it owns a smaller share of mobile screens, which makes sense, since Netflix says the vast majority of its viewing happens on TV screens.
Okay. Now that we’ve got the novelty out of the way, what do those numbers mean — and what does Netflix think they mean?
A couple theories, which differ depending on what numbers we’re talking about:
- That Bird Box number is big, no matter how you parse it. And if you’re a Hollywood star, you may well end up concluding that it makes sense to try making a movie with Netflix, even though they are still relatively new at it: They’ll pay you whatever you would get (and perhaps even more) from a conventional Hollywood studio, and you don’t need to worry about the show disappearing into a pile of unseen documentaries and reruns. Netflix would be happy if you, and/or your agents/managers/lawyers, reach this conclusion.
- Those numbers for You and Sex Education are also very big. We can’t do a real apples-to-apples comparison because we don’t know how each episode of each show performs, and because Netflix is releasing worldwide numbers instead of by country. Still: The most popular shows in the US last year reached anywhere from 13.5 million people per episode (CBS’s Bull) to 20 million people per episode (ABC’s Roseanne reboot). So at a minimum, you can plausibly argue that some of Netflix’s most popular programming is now really ... popular. Again, that’s squarely aimed at people who make stuff in Hollywood and around the world.
- Similarly, those smaller numbers for Bodyguard and other shows are still meant to prove that what used to be considered niche content — have you watched any Turkish TV before? — travels well across the world. (And in the case of Bodyguard, note that the show had already generated a huge audience in the UK when it aired there, prior to Netflix.)
That 10 percent of US TV time is most intriguing to me. Netflix, which tacks back and forth between telling the TV establishment that they’re coming for it (“The goal is to become HBO faster than HBO can become us”) and telling the TV guys that there’s room for everyone, seems to think that this is a peace offering. In his shareholder letter, Hastings argues (as he has before) that lots of Netflix subscribers watch lots of other programming, too. “We compete with (and lose to) Fortnite more than HBO.”
If Hastings really thinks that’s an olive branch, he has misjudged the TV guys and everyone else who is furiously trying to build their own streaming services to compete with Netflix. The only question in their minds is whether Netflix is a straight-up enemy (the Disney/Fox position) or a possible frenemy they might still be able to sell reruns to (the AT&T/Warner Media position). Everyone takes Netflix very, very, very seriously.
But that 10 percent number is also a signal to Wall Street about how much growth Netflix has left.
Investors are engaged in a constant debate about how many subscribers Netflix can add to its total. But today Netflix is also telling investors that it can extract more viewing time from the subscribers it already has. If true, that would make Netflix even more valuable in years to come, even as its subscriber growth eventually flattens.
And, not coincidentally, it gives Netflix the ability to raise prices as it commands an increasing amount of its subscribers’ time.