Streaming data transparency a vast and contested terrain for Hollywood creatives
The lucrative NBC sitcom “Cheers” featured a washed-up baseball-player-turned-bartender, a spunky waitress and a bunch of regulars who hung out at the bar. By the end of its 11-season run in 1993, the show was getting 26 million viewers a week.
Back then, the public could get a lot of information about how our favorite shows performed. But for streaming in 2023, that data is harder to come by. It was a sticking point in the five-month Hollywood writers strike.
Members of the Writers Guild of America have until next week to ratify a new contract with studios that includes access to data like total hours streamed. But even that metric isn’t enough, Brandon Katz, a strategist at entertainment consulting firm Parrot Analytics, told Marketplace’s Lily Jamali.
The following is an edited transcript of their conversation.
Brandon Katz: In general, transparency in terms of performance measurement is so important to creators because it gives them real-time understanding of how their show is or isn’t succeeding and with whom, or who it’s not resonating with. It allows them to make tweaks as the show continues to develop in order to potentially grow its audience after identifying its core audience. And from a financial standpoint, it gives them a vested interest in the show’s performance. So one thing that the streaming era has brought about, kind of the Netflix model that really started when Netflix got into original programming, is buying out the back end of shows and movies. And that meant, essentially, paying more upfront money and raising the floor of a project because each project was considered, like, a moderate to solid hit, and lowering the ceilings for those once-in-a-while, true-blue breakout smash home runs. And the reason why that was a little bit challenging was because, one, as we’ve seen, big, huge hits like your “Stranger Things,” your “Mandalorians,” they aren’t generating necessarily as much money, as long tail of compensation, as a traditional, linear hit would have back in the day. And so when the incentives of the studio and the creative are aligned, and everybody profits and is rewarded awesome success, it usually guarantees the hardest work possible, the most commitment possible. So it’s nice that we are kind of moving back toward a model in the streaming era that aligns all those incentives, gets everybody working towards the same goal at the same level.
Lily Jamali: If we were talking in, let’s say, 1985, what would the model have looked like then?
Katz: Yeah, so something like a “Cheers” from that era: long-running sitcom, the cast and main creators are getting a lot of money through renegotiations as the show keeps getting renewed. And then, once a show typically, back in the day, hit syndication, it was about around 100 episodes, it was allowed to really generate tons of revenue by being licensed to other networks. So you often saw, like, “Seinfeld” reruns on TBS on basic cable. You see them now, today’s linear hit, sells for a massive package. It’s streaming broadcast rights globally. So there were multiple windows of monetization in which the cast, crew and even the owners of the content could really cash in. Today, again, if you think about it, like those shows I mentioned, “Stranger Things,” “The Mandalorian,” even a smaller show like a “Grace and Frankie,” those are only staying on one platform and they’re never going anywhere else. So we have eliminated ways to generate more revenue and get more long-tail value out of a project because it just stays stable, static on the digital shelves of one location, never moving, and unfortunately gathering digital dust and cobwebs, when it really could be monetized in a multitude of different ways.
Jamali: Now, it seems like the main data point that has gotten a lot of attention is total hours streamed. Is that right?
Katz: Yes, but the issue is that raw viewership is an incomplete metric. It doesn’t help create apples-to-apples comparisons. And it’s contingent on the respective subscriber bases of different streamers, the length of episodes, the number of episodes. It’s an incomplete picture of performance. And it behooves the studios to continue telling that incomplete picture because it gives them more power over the narrative that they sell to Wall Street, the narrative that they sell to consumers, and helps them protect the publization of shows that don’t generate a lot of viewership because the hit rate in this streaming era in which we are making 600 scripted shows a year in America is not so great always.
Jamali: What are the other metrics outside of total hours streamed that are potentially valuable? Are we talking about unique viewers? Are we talking about completion rates?
Katz: Yeah, I would throw unique viewers and completion rates into the mix of really important metrics. And I think what’s a little frustrating about the industry adopting estimated completed views, which is total hours viewed divided by total running time and that’s created an estimated complete use, which Netflix has touted in its public transparency efforts, which Disney+ has recently begun saying, what’s frustrating about that is these services actually have the unique account views that have completed the title. And so they’re choosing to give us a less insightful metric because, again, it helps them control the narrative. But like I mentioned, in addition to that, [there’s] acquisition: Is this title helping drive new subscriber sign-up growth? Engagement: Is this keeping a user within a digital ecosystem for longer? Retention: Is this grabbing the attention of high-risk subscribers? Decay rates, affinity, audience demographics, future content licensing ability in terms of valuation by platform. Total hours just doesn’t reveal much insight about customer behavior and the lifecycle of a viewer. And all these other metrics that we’re talking about really are the foundational focus of exactly that.
Jamali: Now, you were on our show last year talking about Netflix’s new ad tier, and you said then that that was going to be a big deal because it was going to require the streaming giant to hand over viewership data to advertisers. As you said at the time, you thought that was going to benefit writers when it was time to strike a deal on pay. Do you feel like that holds true now, a year later and a new contract later?
Katz: I do feel that way because in this agreement that the writers just struck, they did establish minimums and significantly improve residuals for product made for AVOD, advertising video on demand. So although this applies to kind of any new medium products above a certain budget level, hence why they keep touting high-budget streaming originals, whatever that may be, this does help them at least move forward with a greater expectation of compensation and protection. So something like original content even made for Tubi, Amazon Freevee, they’re also included in the new provision. So we’re seeing a trickle-down effect. It’s not just Netflix ads here, it’s not just Hulu ads here, it’s also going to the free, ad-supported streaming services as well. So that is a nice waterfall effect that should only grow in importance moving forward, as revenue is the really strong metric these days, not just raw subscriber views. So AVOD becomes increasingly important to everyone across the digital spectrum.
Jamali: And just going forward, what are you going to be watching for when it comes to this hunt for data that writers and actors are so eager to get from the platforms?
Katz: When we look at the grand scheme of things, we hope that this will continue to evolve, to create a more transparent and fully realized data swap between the big, powerful studios that are hoarding all this viewership data and the writers and creatives that are trying to get a little taste of how their shows are performing. And I think moving forward too, in terms of this larger context, is the kind of fear of [artificial intelligence]. Now, they did receive some protection in this agreement. You don’t want to kill the heart of the creative community by relying on these various tools that may have application that ameliorates and supplements good, old-fashioned creative writing, but it’s never going to replace it, in my opinion.
Brandon Katz mentioned AI, which in addition to viewership data was a major sticking point in the writers strike. Here’s an explanation from The Verge of what the new WGA contract with studios includes on that front. AI-generated content won’t be allowed as a source when writing or rewriting material, and that’s considered a victory for Hollywood writers.
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