Thursday, January 30, 2020

The way you define your metrics determines what you measure -- Netflix edition

From Marketplace.
“The Witcher” starts with Henry Cavill and his chiseled jaw battling a gurgling swamp monster. According to Netflix, 76 million member households watched at least this far.

Netflix counts people who watch the first two minutes of the show as viewers. So if you moved onto something else, you still boosted Netflix’s ratings.

“That two-minute period is enough of an indicator for them to [have a] very clear indication of people completing it,” said Courtney Williams, head of partnerships at Parrot Analytics. “So they don’t have to go all the way through.”

Here's the thing. You don't really need an indicator of how many people completed a show (even a very, very clear one), if you already know the actual number who did., No company has fetishized the collection of viewer data more than Netflix. They track how long you watched, when you paused, where you rewinded.

Though it's not the best measure of how many people have watched a show,  the 2-minute warning does give us an excellent read on interest/curiosity level, how well your marketing and PR worked, how appealing your stars are, how much people listen to your recommendation engine.

And it produces really impressive numbers like 76 million. 

In an industry where billions are spent every year on promoting content, there is a legitimate business need for these metrics, but they leave some people wanting more.

But Netflix still has investors who want to know who kept watching.

“It is proverbially grading one’s own homework, and there has to be a bit more transparency,” said Tim Hanlon, CEO of media advisory investment group Vertere.

Netflix probably knows how many people finished “The Witcher.” But unless investors press for more details, we never will.

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