Looming competition, mounting pressure from entertainment industry players and tracking efforts from media measurement companies are pushing Netflix to open up.
As the race for the best picture Oscar heated up last month, the Hollywood studios knew precisely how successful each of the contenders had been at the box office, except for one: “Roma.”
The Netflix movie had run in only a handful of theaters, leaving the makers of the other best picture nominees in the dark about whether the critical acclaim of “Roma” had been matched by popular support. Netflix is famously secretive about viewership data, rarely sharing it even with the directors and stars who work with the company, let alone the public.
But Nielsen, the media tracking firm that releases traditional television ratings, was watching — and what came next may finally start to erode that wall of secrecy.
Nielsen, which began tracking Netflix in 2017 and employs a combination of audio and digital data collection, found that “Roma,” an arthouse-style movie about the life of a Mexican family, was watched by 3.2 million U.S. households in January and February, according to the data it supplied to NBC News. A million of those households watched the movie over Oscar weekend. Nielsen did not have the viewership data dating back to movie’s premiere in November, and it does not count mobile or international audiences.
The numbers for “Roma” are part of a growing number of glimpses into Netflix’s viewership. Looming competition in the streaming world, mounting pressure from entertainment industry players and tracking efforts from media measurement companies are coming together to push Netflix to open up.
The company has recently offered a few limited numbers around some of its offerings, including “Bird Box” and “You.”
The changes could mean the end of Netflix’s near-monopoly on streaming entertainment data, which could reduce one of the company’s key competitive advantages. Netflix has long used its secret user insights to drive decisions on how to spend the billions of dollars the company has been pouring into original programming.
Not having to share data has allowed the company to herald its critical successes while flops disappear from view. Nielsen’s growing attempts to publicly share Netflix viewer information could dissolve this mystique and level the playing field in the battle for talent and viewers at a time when Netflix still needs to grow.
Two sources familiar with Netflix, who spoke on the condition of anonymity, said it is increasingly sharing information with talent and exploring giving out performance numbers selectively.
The few available numbers from Netflix and third-party tracking companies are also sparking a new round of debate about how to properly measure audiences. When Netflix does report viewership numbers, rivals have criticized the company for making their shows appear to be much more popular than they are.
Earlier this year, John Landgraf, the chief executive of the cable channel FX, said that the way Netflix reports its audience size is highly misleading. Netflix said in a quarterly earnings report that “You” — a show that was dropped by Lifetime — was on pace to be watched by 40 million households in the first four weeks on the platform. He said the show’s average audience, which is how traditional TV is counted, is more like 8 million viewers.
Nielsen isn’t alone in trying to pull back the Netflix curtain. Other companies, such as the New Zealand-based Parrot Analytics, are attempting to capture a general sense of what’s popular on Netflix, using a variety of data including comments on social media and measuring traffic on torrents, an often-illegal way to download shows.
Netflix, however, could end up helping to set the terms of how audiences are measured going forward, and — importantly — who does the measurement. Two TV executives, who spoke on the condition of anonymity due to business relationships, said it has become an open secret in the media industry that Netflix and Nielsen have had some conversations about sharing viewership data, though one person described them as akin to the United States’ talks with North Korea on nuclear weapons.
Brian Fuhrer, a senior vice president at Nielsen, said his company would be happy to work with Netflix.
“I always make sure I extend the message,” he said. “I’m willing to talk, and in fact, if we want to start sharing data back and forth, I’m happy to do that.”
“Hopefully, we’ll get to the point where we are working closely with Netflix at some point in the future.”
Netflix’s dominance of streaming entertainment has meant it has the vast majority of data on what streaming consumers watched. But with the rise of Amazon and many major players set to enter the same market, including AT&T’s WarnerMedia, Disney, Apple and Comcast’s NBCUniversal — and the prospect that Netflix could lose popular licensed shows such as “Friends” or “The Office” — it could soon need to find a middle ground with measurement firms that have traditionally worked on a model that offers data only to companies that return the favor. (NBCUniversal is the parent company of NBC News.)
As times change, rivals believe Netflix will need a more comprehensive view of the streaming universe beyond its own data. Nielsen will begin sharing Amazon and Hulu viewing data later this year, according to a source familiar with Nielsen, who was not authorized to speak about the matter publicly. Nielsen has business relationships with Amazon and Hulu, but neither yet subscribe to its ratings service.
That could eventually push Netflix to become a Nielsen client.
“As more competitors come into the marketplace and they lose their top shows, they might want to understand the trajectory,” said one TV industry veteran. “They’re going to want to see Amazon. Warner Media and Disney have big offerings coming, and NBCUniversal.”
Netflix is also under increasing pressure from Hollywood talent to divulge more information, particularly as the service ramps up its spending on original content. One TV industry source, who did not wish to be named for competitive reasons, said that people who make shows for Netflix do get some data, such as total streams, but noted there’s much greater value in knowing how that stacks up against other Netflix shows — something the company doesn’t tend to share.
“The best reason for Netflix to share viewing data might be to demonstrate to the creative community that the platform is a great outlet for creative endeavor,” said Mike Bloxham, senior vice president of global entertainment at Magid, one of many research firms aiming to shed light on Netflix viewership. “But that can always be done privately and, in many ways, the absence of data in the public domain almost certainly serves the company better.”
For now, Netflix remains firmly in control of the market for its data, and its emergence as a dominant force in the entertainment industry means it can require smaller partners to meet its demands.
“Netflix has a lot of power compared to say five years ago,” said Ashish Chordia, who is the founder of Alphonso Inc., a TV analytics company.
Chordia pointed to Smart TVs as an example of how the dynamic shifted.
“Those devices, if they want to work with Netflix, they must agree to the terms,” Chordia said. “Netflix specifically prohibits all of them from capturing audience data.”
Just a few years ago, Netflix might not have had the power to dictate those kinds of terms. But now it does.
“Netflix might pull their app from my TV,” Chordia said. “That’s the power.”