Blog Excerpt

Netflix : Making an Original

MAKING AN ORIGINAL :
How Netflix Dominated Original Content Over HBO and others in 2015

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 positive outcomes. While no one outside of Netflix can substantiate this claim with absolutely certainty, a simple hypothesis alongside careful research has led to this estimation.

Using their own data set and forecasting tools Netflix can estimate the value of show 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.

Report findings include:

  1. 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

  2. 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)

  3. HBO continues to lead in overall view rating of 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.

  4. 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

  5. DOWNLOAD THE DATA SET that was used in this article, by filling out the form in the left column above