Critic's Notebook: In the Ratings Game, Advantage Netflix

The company's staggering but unverified ratings numbers and its history of withholding information drive its competitors crazy while creating mystique and value.
Courtesy of Netflix
Asa Butterfield and Emma Mackey in Netflix's 'Sex Education'

Ask anyone what they love about Netflix and they will tell you lots of things. Ease of use. Lots of shows. Watercooler talking points. Here's why I love Netflix: It's a master of the industry mind-fuck.

There is no entity that drives people in the TV industry insane more than Netflix. Insane with jealousy, outrage, envy, fear, distrust, disdain. Netflix is like a house of spies. It's an industry hack. A palace of scary ghosts. 

Reed Hastings, Ted Sarandos and company are very artful at keeping people off-balance, disseminating information — or not! — while shifting the ground beneath everyone's feet.

Impossible to make sense of. Never boring. Impossible to ignore. Not a bad strategy to have at any point, but certainly as 2019 is about to get bonkers when it comes to game-changing industry shifts. 

All the networks and cable channels coming through the winter session of TCA have Netflix on their minds, even if they don't want to admit it. And they should. Until proven otherwise, Netflix remains the ultimate industry disrupter (and it won't cede that to Disney+ later this year; Disney+ will just be another gigantic headache for everybody).

Earlier this month, the latest Netflix mind-fuck was a letter to shareholders that got a lot of attention because it noted, quite out of the blue (see?), that You, a drama that had earlier been DOA on Lifetime, had been watched by 40 million people on Netflix during its first four weeks. Oh, and that its latest (excellent) series, Sex Education, had been watched by 40 million people as well. All in the span of a month (which assumes, as the mind reels, that maybe more people have watched since then?).

See? Netflix does that to people.

In that same four-week time period, Netflix revealed, 80 million people had watched its original movie Bird Box (with bonus "high repeat viewing") and, with an almost subdued shrug, noted that its Spanish series Elite had 20 million viewers in the first four weeks, Bodyguard (Britain), Baby (Italy) and Protector (Turkey) each had 10 million in their first four weeks. If you're missing the message here, Netflix has shows from Turkey that crush American series. It is so uninterested in comparing itself to others that it went so far as to say, outright, "We compete with (and lose to) Fortnite more than HBO." In the same sentence it dinged YouTube for a service outage that resulted in more Netflix subscribers and patted Hulu on the head like a child.

That is some serious-ass swagger. You can get away with a lot in a letter to shareholders. But, of course, it was way more than that — it was malware for the mind of TV execs across the industry. It was a rap battle of one. It was anxiety-onset espionage, audaciously tossed off in a letter.

Oh, and it worked. Boy, did it work. Everybody talked about it. They are still talking about it. I'm still talking about it and thinking about it. And also loving it — as theater.

All this, of course, comes with an asterisk. Netflix, in a move that I've believed was a smart one from the start, doesn't release ratings information. Third-party tracking can't be considered reliable. So nobody knows. Ah, but it does release ratings when it feels like it, as in this instance. And it periodically says, "Show X is the best performance on the platform yada yada yada." It doesn't matter. It can't be verified. So Netflix talking about ratings is dubious.

Even so, many people in the industry believe that whatever algorithms Netflix is using to track viewing habits are damned impressive. So why would it lie? Why say You or Sex Education will hit 40 million viewers each when it could say 60 million (hell, 80 million for Bird Box means anything is really possible). Why say Bodyguard, a series with way more hype behind it before joining the streamer than Sex Education ever had, was hitting 10 million instead of say, 15 or 25 million? Meaning, you can certainly question the accuracy, but you'd also have to ask, Why those numbers specifically?

What if those numbers are, in fact, accurate?

And that's really the mind-fuck of it all. The halo effect of panic doesn't start and end with competitors, even if Fortnite is your only named competitor. I mean, yes, You getting 650,000 viewers, roughly, on Lifetime and then getting 40 million on Netflix certainly makes the case that Lifetime should shoot itself in the face, right? And as much as I love Sex Education (and will write on that separately), doesn’t it seem odd that Netflix is touting 40 million in four weeks for that show but never noted such numbers for, say, Stranger Things or any other series considered to be, in industry circles, the big players for the platform? Why note 80 million for Bird Box but not a peep about Roma figures? Does it mean those numbers are bad? I doubt it. Basically Netflix is playing with numbers in a freakishly bewildering way because it creates an angry little vortex of questions and wonder in the minds of rivals. And the media. And analysts.

And yet, by putting certain numbers out there, it also casts aspersions on the performance of other Netflix series. Going all in on the mental jujitsu was clever on the one hand but maybe not so far-sighted on the other. 

Then again, the bottom-line argument that always helps Netflix (and other streamers and premium cable channels) is this: Ratings don't matter. We don't rely on advertising. We are a subscription service. Which is true and, because of the aforementioned mind games, Netflix gets to win both ways: Tens of millions of people — exponentially expanding each week, possibly! — could see your show, but hey, if they don't, we'll still love you and ask you back for another season because ratings don't matter. (Yes, I know, Netflix does cancel shows, but that percentage is impressively small.)

Advantage Netflix.

But let's get back to linear TV for just a doomsday moment. Ratings gurus at broadcast networks and ad-supported cable channels are going to nitpick those Netflix numbers to death, but no amount of anti-spin is going to make them less disturbing. I mean, if You couldn't launch on Lifetime where, theoretically, it had a better chance than on most other channels, what does that say? And what does the disparity of 650,000 to 40 million say, even if there are international numbers and repeat viewers involved?

Well, it certainly creates doubt. It benefits Netflix in the all-important content-creator wars. Yes, You creator and insanely prolific TV machine Greg Berlanti will stay at Warner Bros. through 2024, according to THR, on a $400 million deal, and maybe WarnerMedia can one day get Netflix-like streaming numbers, but Netflix can still point to You as it negotiates with anybody else and say, "Them. Us." And it's a pretty convincing argument.

And it's not just megadeals. Looking at these You and Sex Education numbers, plenty of series creators with just one show to pitch will think — like they hadn't already — that Netflix is a better place to do business. (Never mind that their shows can, just as easily, get lost in the black hole of content there.) 

The myth of Netflix is an advantage. Because what if it's not a myth? Nobody disrupts like Netflix.