TCA Journal No. 4: The Time NBC Universal Revealed Netflix Ratings

Ted Sarandos - H 2015
Eric Charbonneau/Invision for Netflix/AP Images

Ted Sarandos - H 2015

Chief TV critic Tim Goodman will be writing these journals throughout the winter Television Critics Association press tour, offering insight, analysis, big-picture perspective and snark from the two-week event.

This promises to be a mostly wonky look at ratings, but if you read to the end at least you'll learn about the makings of a potentially ugly fight between Netflix and NBC.

Yay, fighting!

See, numbers aren't so bad. Sometimes they can make people do deeply dubious and cheeky things, which is what NBC did on Wednesday, pulling, to the best of my knowledge, a dodgy end around meant to force Netflix to do the one thing it has no interest in doing — reveal its ratings.

In television, every network and cable channel has a numbers analyst who spins and tracks and weaves a web of charts and graphs and — this is the main part — hope. Yes, of course you can spin and track hope. That's the whole point of having a numbers analyst. The metrics of hope. The upward trends of hope. Tracking hope across multiple media and multiple platforms so that the future (supported by advertising) looks bright.

I've been to a countless number of these things — it can all get a little dizzying and also familiar in its desperate need to illustrate that the end times are not here yet — and thus skipped NBC Entertainment numbers guru Alan Wurtzel's presentation, but then circled back to the transcripts of the session because something fascinating came out of that event.

Well, technically, lots of fascinating things were in the transcript. When it comes to dense numbers and analytics, it actually helps to read all the things you might have missed by actually being there. And Wurtzel's main, overriding point was one that everybody in the industry agrees with (Nielsen is not accurately measuring the audience) and one that does indeed produce hope (people of all ages really are still watching television, just in ways and on devices that currently do not fall under Nielsen's measurement tracking rubric).

The technological changes in viewing (from TV to laptops to over-the-top streaming to tablets and phones) combined with overwhelmed consumers who have too many choices and not enough time leads to delayed viewing — and Nielsen, "the currency of the industry" as Wurtzel said, only tracks a maximum of seven days after a show airs on a network and ignores a number of platforms where people are clearly consuming TV content.

Translation: The people are there — they're just not being counted. Wurtzel told the audience that Nielsen was getting its act together to eventually track everything. In the meantime, a number of other tracking companies have filled the gap, and although the TV industry has yet to hire them en masse, their results are intriguing.

At this point, Wurtzel did something that absolutely caught the attention of Netflix and, mark my words, Ted Sarandos will have a rebuttal come Sunday when the streamer arrives at TCA.

What did Wurtzel do? He provided Netflix ratings.

One more time for clarity: He provided Netflix ratings. Which is interesting for many reasons the most obvious being that Netflix itself has never, ever done that.

This is a little bit like someone being able to read your bank statement when you haven't given them access to it. See, if you use Nielsen like everybody does (except Netflix and Amazon) ratings are a shared knowledge. Everybody knows how everybody's shows did, ratings-wise. There are no secrets. Even premium cable channels — like HBO, Showtime and Starz — whose business models are not even built on ratings (they rely on subscribers not advertisers) share ratings without having to do so. Sarandos, bluntly, doesn't understand why they do that.

And he chooses not to share numbers because Netflix isn't a ratings-based business model and its internal metrics for success don't rely on the kinds of information Nielsen tracks or, for that matter, understands (Netflix subscribers don't consume content in ways that apply to networks).

Now, you may be annoyed that Sarandos and Netflix don't reveal ratings numbers — certainly many critics and people who cover the industry are put off by that stance. (As an aside, it doesn't bother me at all and I have no idea why premium cable channels would provide ratings numbers either. That said, what does bother me about Netflix is it tries to have it both ways — not releasing numbers and then touting the success of its shows without tangible evidence).

But you can imagine the WTF scene at Netflix when Wurtzel busted out ratings numbers for Jessica Jones, Master of None, Narcos, Orange Is the New Black and, just to make sure he rattled both cages, Amazon's Man in the High Castle.

Now, a lot of this can be wonky and complicated and there's certainly issues involved here I'm not going to pretend to fully understand, but Netflix didn't give NBC permission to use those numbers (duh); instead, NBC used data from a company called Symphony Advanced Media. According to Adweek, Symphony unveiled this software in September and among those beta testing it is NBC.

The Adweek story from September said the data Symphony uses comes from 15,000 users who had volunteered to be tracked and that the company was hoping for 50,000 users in a year. How those users are being tracked — how Symphony is getting data that Netflix believes is proprietary information — is the key. But first: 15,000 is a small sample. Also not detailed in the Wurtzel transcript were whether all these 15,000 people were actually Netflix (or Amazon) subscribers, which would reduce the sample size even more; the focus was on the adults 18-49 demo, which Netflix doesn't use, and the ratings spin seemed to ignore how people actually use Netflix as a service — elements Sarandos will no doubt address on Sunday.

As for how Symphony got the Netflix numbers: Its software essentially uses automatic content recognition, which is an app loaded on a phone that tracks and matches a program's audio files — kind of like Shazam. In theory, if Symphony has 15,000 people willing to be tracked (and who have Netflix), the app will sit on their phones and always be on via the microphone, uploading information to a cloud. Since those 15,000 people would be registered through Symphony, the third-party tracking company would have all kinds of demographics on them already, even before finding out how many of them watched Jessica Jones or The Man in the High Castle.

You can see the appeal. But how much if it is accurate? Maybe the methodology is more foolproof than it seems, or at least as accurate as Nielsen, but you can bet that Sarandos will have a say about that come Sunday. And it does seem odd that a company hell-bent on keeping what it believes is proprietary information secret can have that data tracked (mined) by a third party and sold (or at least shared) to a rival like NBC for no compensation and have that information used, as it was Wednesday, as a way to cut Netflix down to size.

Now, the overall goal of what Wurtzel and NBC Universal did on Wednesday was one most people can get behind — pointing out that dire predictions of streaming and technology killing linear television or the industry itself is vastly overrated. At its core, Wurtzel's session was about what everybody wants — total audience measurement.

But the Netflix part of it was an eyebrow-raiser because nobody's ever heard Netflix ratings information. And the fact it was done at the TCA winter tour a few days before Netflix arrives suggests that maybe someone bought some popcorn and can't wait to watch the fireworks. It's certainly sly — the only way Netflix can say that the Symphony numbers are inaccurate is to produce their own.

I see what you did there, NBC.

People in the industry have wanted to get in a sharp poke at Netflix and its ratings-blackout stance for some time now. A third-party app and cheeky presentation did just that.

Of course, Netflix is not going to kick off its Sunday session here by opening the books. Sarandos is going to essentially pour chemicals on the Symphony methodology and dismiss the whole thing as wrong. But it's certainly a session not to miss.

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