MAKING AN ORIGINAL : How Netflix Dominated Original Content in 2015

…in 2015 Netflix managed to release a near perfect slate of originals without an arduous piloting process, leveraging 1st party data to drive success.

After 8 years of streaming, Netflix guards more viewer data than all media distributors combined. They claim viewer data is the key to successful content creation, but for years now many have remained skeptical of their actual success because viewership numbers remain hidden behind the “red curtain”. However, skepticism aside, it’s clear that in 2015 Netflix managed to release a near perfect slate of originals without an arduous piloting process, leveraging 1st party data to drive success. While no one outside of Netflix can substantiate this claim with absolutely certainty, a simple hypothesis alongside careful research has led to this estimation. If you take a closer look at how Netflix can measure success for their originals, the big picture will come into focus.

HYPOTHESIS

For traditional TV networks, total viewership as estimated by Nielsen (and other media measurement services) has been the common data set for decades, determining how well a show has found market fit. This 3rd party data has determined how many advertisement dollars a show will attract, how long it remains on air and where it can be distributed in subsequent release windows. For a modern distribution unit like Netflix, there is an alternative outlook.

Using their own data set and forecasting tools Netflix can estimate the value of shows to the overall service, let’s call this a Netflix Rating, helping them gauge a shows ability to boost subscriber retention and acquisition. Total viewership becomes one variable in a more detailed equation. Frequency of viewership against average monthly time spent on the service, rate of viewership growth over time, even the amount of viewing time generated by adjacent shows in the browsing carousel all factor into a Netflix Rating. We also imagine that production budgeting is a consideration, but because they use 1st party data to power creative direction they increase their chances of market fit to the point that making an original is more cost effective than licensing a set of content that may not drive long term service value. All variables considered, the Netflix Rating determines if more money should be invested into a given series, or in other words if it’s to be renewed.

METHODOLOGY

To come to the conclusion that Netflix has released the most successful slate of content of any network in 2015, we analyzed public data that included viewer reviews (rotten tomatoes, metacritic), the number of series renewals and the mix of genres they released. Furthermore, we looked at similar data for competitive networks/services, focusing primarily on premium publishers that traditionally have a higher success rate than the industry average.

FINDINGS

  • Netflix released 14 new original episodics in 2015 that were marketed to US subscribers. The average viewer rating across them was 78.7%, over 5% higher than HBO despite the fact they released 7 times the amount of new shows last year
  • Netflix has the widest variety of content in their original slate from a genre perspective. They‘re continuing to take chances with new types of creative, helping them attract visionary talent and establish brand legitimacy in the original content space. (i.e. For 2016, they secured Brad Pitt’s new film, War Machine)
  • HBO continues to lead in total average view rating for their active original slate at 81.1%, with a 100% season renewal rate this year. Netflix is just behind them though, with an overall viewer rating of 80.9% for their original slate (if you exclude Game Of Thrones, Netflix is just above HBO).
  • While it’s not likely Amazon has the volume of viewership other networks do with respect to their originals, their original slate of 4 new shows in 2015 led to a 100% renewal rate. The average rating for their originals also topped HBO
  • The broadcast network pilot model is not optimized for success. Even though they air the most new content, when compared to cable basic and premium networks, they have a much lower hit rate (we only gathered data on NBC to give an exemplary data set of a typical broadcast network)

DOWNLOAD SUPPORTING RESEARCH DATA SET HERE

Conclusion

In 2016, as more networks go consumer direct (i.e Starz Play), they will begin to drift away from traditional success metrics as they ramp up original content production. New measures of success will begin to emerge as they place more effort on establishing 1st party data sets.

By helping networks generate their own massive data sets, Pilotly is enabling its partners to shift towards modern success metrics…

At Pilotly, we’ve seen increasing interest in our online approach to consumer intelligence across the lifecycle of a series, from pilot insights to weekly audience feedback. By helping networks generate their own massive data sets, Pilotly is enabling its partners to shift towards modern success metrics that will ultimately optimize creative and increase monetization opportunities. While more than likely we’ll be singing the same tune about Netflix one year from now, as traditional networks go digital and some of the sharpest minds in Hollywood are empowered by viewer data the competitive landscape will shift quickly.

Some industry leaders believe we’re in a bubble of content creation, with over 400 scripted series put to bat last year. However, we believe this is just the beginning. The true golden era of entertainment is upon us. As networks build towards viewer preferences and increase creative freedom through the power of data, we will be released from a familiar cycle of the usual programming.

DOWNLOAD SUPPORTING RESEARCH DATA SET HERE

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