Netflix Viewership Is About To Be Tracked Which Could Mean Higher License Fees And Less Profit

Netflix Viewership Is About To Be Tracked Which Could Mean Higher License Fees And Less Profit

Netflix has always been tight-lipped about the viewing statistics for its streaming service, but Nielsen ratings is starting to reveal clues about just how well Netflix’s shows are doing.

Interestingly for the company, which must bid on all the non-original content it streams, the results, which cover both original and licensed programming, may provide content creators with more leverage when licensing their shows to streaming services - Netflix or other.

Netflix has justified its secrecy over ratings by illustrating that it doesn’t have to please advertisers like traditional television, so such numbers are irrelevant. Nielsen has nonetheless started to track the numbers for Netflix, Hulu, and Amazon, giving major TV studios information on total viewers for an episode, and age and gender demographics.

The three streaming services will spend $6.8 billion this year to license reruns from network studios, who say that they have seen strong revenue growth in their streaming deals. Armed with a more detailed picture on the viewing stats, those media firms may push for a harder bargain.

Netflix doesn’t confirm any ratings statistics and was generally dismissive of Nielsen’s efforts, partly to maintain some bargaining power when dealing with the media firms that license content to the streaming service. For the same reasons, media firms have been just as secretive about viewer statistics when dealing with producers and actors.

When more detailed statistics do become available, Netflix may have to deal with more expensive media contracts as well as increased scrutiny on its current stock valuation which. at a price-to-earnings ratio of 247, is ridiculous by any standard.

The recent Nielsen statistics do not include viewing on tablets and mobile devices, which is a big flaw considering how much easier it can be to navigate the service on a touch screen, and then simply broadcast to one’s TV using Roku or AppleTV. According to Nielsen, this data will be included in future statistics.

Despite Netflix’s general secrecy, the streaming service has provided studios with larger deals at the company with data about the number of streams per month for a particular show and the percentage of viewers that continue to watch a show over multiple episodes.

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