Monday, September 16, 2013

Does Netflix Hurt Or Help TV Ratings?

When networks first considered putting their TV shows on cable's on-demand platform, the biggest worry was that it would result in a loss of rating points when the show aired on its linear channel.  But the tactic seemed to gain value as consumers discovered shows and used both on-demand and linear to watch their favorite shows.  In fact, some argued that on-demand helped consumers to rediscover shows or catch up on old plots in order to get current with the new season.

The use of Netflix seems to echo those same finding as on-demand.  New viewers have come to AMC to watch shows like Breaking Bad or Mad Men because they have been able to catch up on previous seasons on Netflix.   "AMC Networks, for example, saw ratings of “Breaking Bad” grow 50% in season four, with viewership for the fifth and final season airing now still climbing."  Cartoon Network, on the other hand, seems to have a different outcome.  They claim to have found a small drop in ratings that they attribute to their new deal with Netflix.  They do claim other factors.  "The drop in ratings is largely attributable to the loss of returning hits such as “Ninjago” in the first part of 2013, the network said."  Perhaps it demonstrates that the best use of Netflix for some content companies is in how it enables viewers to rediscover older seasons in order to encourage viewership in the current season. 

Dramas, especially those where each episode is dependent on the story line from previous episodes, has more to gain from on demand and Netflix.  The challenge for viewers that don't watch a show from day one is that they can't join the action halfway in.  On-demand and Netflix finally allow viewers to "catch up" in order to start watching the shows as they appear on linear channels.  That phenomenon has been called binge viewing.  While cartoons and comedies might not need this type of viewing behavior to enjoy the latest show, dramas seem to especially require it.  That means it is more important to know what happened last week on Homeland then what happened last season on The Big Bang Theory.  Netflix may indeed help some shows and hurt others in the ratings.  No one should have ever thought that it was a one size fit all strategy.

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