What’s behind Netflix’s Engagement Report data dump?

Last week Netflix released a much-talked about Engagement Report, that for the first time details hours viewed for TV shows and films on its platform during the first half of the year. It’s a report the streamer plans to release twice a year and gives a glimpse into performance, by hours viewed, of titles on the leading SVOD over a six-month period – a move Netflix has indicated is the name of more transparency after years of shielding data for competitive purposes.  But with its Excel spreadsheet format data dump, what’s the aim for Netflix?

On a call with reporters last week, Netflix co-CEO Ted Sarandos said the “What We Watched: A Netflix Engagement Report” is a comprehensive deep-dive in response to what’s been a constant ask for more viewing information, in part to combat an atmosphere of distrust and give creators and the industry deeper insights. He also said view hours represent the most effective way to measure engagement and makes Netflix easy to compare to other streaming services. It follows earlier moves by the company to release more data around viewing on the platform. In 2021 Netflix started publishing weekly Top 10 and Most Popular lists, and Sarandos said more detailed title-specific information is shared with creators.

The new report is to be published twice a year, showing six months of viewing hours for both licensed and original content. The initial report covered the first half of 2023 (January-June), including hours viewed for TV series and films watched for more than 50,000 hours - collectively spanning over 18,000 titles and nearly 100 billion hours - representing 99% of viewing on Netflix.  The report also shows each title’s release date and whether it’s available globally.

A few caveats

On last week’s call, Lauren Smith, VP of Strategy and Analysis at Netflix, called out a few caveats about the report while also saying that at the title level hours viewed aren’t everything, as Netflix also considers whether content excited an audience, as well as audience size relative to economic investment in the title. 

She emphasized success can come in different forms and said to keep in mind that the report resents a snapshot in time (aka viewing totals for hit shows like Wednesday that released earlier than the report date don’t make for direct comparisons with those debuting within the snapshot window). Other considerations are that films have shorter run times than TV series (meaning movies tend to generate fewer total hours viewed), while series run lengths can vary. Lengths by region can also differ widely, as an average U.S. scripted series runs around nine hours, compared to 17 hours for Korean titles and more than 50 hours for telenovelas in Latin America. And longer run times don’t necessarily mean more success.

With those caveats in mind, the report was delivered in an Excel spreadsheet without accompanying analysis – a format that not everyone found useful. It didn’t distinguish between series and films, group different seasons of a series together, nor break out any regional information. Since the release, there’s been a variety of takes on Netflix’s release of the data and different takeaways to glean from the trove of information. However, a lack of context and comparative benchmarks in Netflix’s 1H 2023 data dump is something others such as NextTV have pointed out and delved deep into, as it doesn’t lend itself to easy historical or apples to apples comparisons (as an aside, Netflix said Most Popular lists should be used for direct comparisons between titles) and raises the question of what all that data, and Netflix’s decision to release it, actually means.

‘Gold star’ for transparency

StreamTV Insider (STV) asked industry analysts about drivers for Netflix releasing the report and implications for the industry, which in its existing format comes with pros and cons.

One point in the pro column is for creative professionals and more transparency from Netflix and for the industry overall.

Greater transparency of streaming content’s performance was a point of negotiations earlier this year between striking Hollywood actors and writers unions and major studios including Netflix. Contracts eventually reached included certain performance-based bonuses for high performing streaming content and terms for releasing certain streaming data with the aim of more transparency (although Netflix has not cited a connection to the report and union demands).

“Netflix's historical reluctance to share measurements or benchmarks for its original content has been an ongoing pain point for directors, actors, and other creative professionals,” Brett Sappington, founder and analyst of Sappington Media, told STV via email. He noted that theatrical box offices offer “a clear scoreboard” for how popular and successful films are, but the same can’t be said for Netflix content. “So, directors and actors have had little idea how popular or well-received their creative efforts are.”

As presented, Sappington said the report’s format is created to show the comparative popularity overall among Netflix’s content – ie: “a ranked scoreboard that also shows relative viewing.”

And despite some shortcomings, Sappington sees it as a big step forward.

“Even though it is comparing movies with series (as well as comparing series with differing numbers of episodes), the industry can clearly see details of relative success. For example, The Night Agent blew away all other series during the first half of the year,” he said. “That is a huge improvement over the days when Netflix was simply a black box for popularity.”

Similarly, TVREV co-founder and analyst Alan Wolk acknowledged that he thinks at some level it was a way to be transparent for actors and writers unions. However, he told STV he also thinks “it was a smart move in that it does get Netflix a gold star for transparency and, regardless of what people think of the numbers, it puts pressure on other services to be equally transparent.”

That said, the analyst cautioned against a lack of neutrality that comes with companies delivering their own data.

“It also sets the stage for a ‘grading our own homework’ party, where everyone is putting out numbers but no neutral third party is overseeing the process,” Wolk said via email. (For more of Wolk’s thoughts on the Netflix report see his column on the topic here).

As for whether other streamers will feel the need to follow suit in releasing data, Sappington suspects the industry will be keeping a close eye on trends in the types of shows and movies atop Netflix’s lists to help inform their own business decisions.

“Content production is an industry of fast followers, and everyone will be parsing the list to see where they should be placing their investments,” Sappington said.

Benefits for ad business?

While Netflix leadership cited a desire to create more transparency for creatives, advertisers are likely to take notice as well.

Netflix launched its ad-supported tier roughly a year ago and has still been working to build up a sizable base. As of November 1, it disclosed 15 million monthly active users on the plan with ads.

Asked by reporters on a call if the report was a way to give more transparency to advertisers, Sarandos responded by saying the company uses third-party measurement to validate viewing for ad payments. Still, Sappington said the information will benefit the streamer’s advertising efforts.

“Advertisers will certainly be drawn to the top of the list, but the report also reveals that older, licensed series, such as Suits and The Walking Dead, are still pulling in millions of hours of viewing,” Sappington said.

Wolk too sees benefit for attracting advertisers, in part thanks to the breadth of popularity across content types.

“I think it was a way of letting advertisers know that Netflix is more than The Crown and Squid Games, that there are loyal audiences across multiple genres and multiple countries,” he said.

To that point, on the call with reporters, Netflix’s Smith noted that on average members watch six different genres a month and the most-watched titles in the report span 12 different genres. And non-English titles accounted for 30% of viewing in the six-month period while English language titles using subtitles or dubs accounted for 45% of viewing of English language titles.

However, Wolk considers attracting advertisers with the report as “a secondary objective,” noting “they still need to get their subscriber numbers up” on the nascent ad-supported plan.

Asked about whether Netflix presented its information in a particularly useful manner, Wolk acknowledged it’s tricky.

“If Netflix had provided some guidance on what it all meant, they would have been accused of putting their finger on the scale. But by not providing any guidance at all, it left everyone guessing at what the numbers even meant,” he commented. “It sure seems like a lot of hours, but in the scheme of things, is it?”