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Tension Escalates Between Netflix and Its TV Foes (nytimes.com)

An anonymous reader writes: Viewership numbers are vital within the TV industry. For years, the networks have relied upon ratings to make money — higher numbers mean higher ad revenue. The most important part of the ratings system is that individual networks can't just claim whatever viewership they want; third-party companies like Nielsen control the stats. But Netflix doesn't operate by the same rulebook, and this is frustrating the networks. Execs from Netflix and various networks have started arguing about it, both at an industry event this weekend, and in media interviews. NBC had hired a firm to estimate Netflix's viewership numbers, because Netflix won't release them. Netflix says the estimate is laughably wrong, but has also suggested shows fare better on their platform than on cable or broadcast television. If true, it gives them leverage to recruit more and better talent to produce such shows. But it's impossible to refute without numbers, and the networks are increasingly annoyed they can't do that. NBC thinks the media tends to give Netflix a pass on these statements. FX chief John Landgraf said, "[Netflix's Ted Sarandos] shouldn't say something is successful in quantitative terms unless you're willing to provide data and a methodology behind those statements. You can't have it both ways."

17 of 302 comments (clear)

  1. Meanwhile... by Anonymous Coward · · Score: 3, Insightful

    My pirating escalates as well. I don't NEED either of you, so if you're going to raise the price and/or give me less to watch, I'm going to take it for free and own it indefinitely. Your choice.

    1. Re: Meanwhile... by Anonymous Coward · · Score: 3, Insightful

      Pirating created avenues like Netflix in the first place...the goal was to put up a lot of media cheaper than the effort to pirate it.

      We are soon approaching the point where pirating is better again. If people go back to pirating in droves, a new Netflix will come on to fix the problem. You can't stop pirating, but you can make your service good/cheap enough for people not to pirate.

    2. Re: Meanwhile... by Vanderhoth · · Score: 5, Insightful

      Actually Netflix originated from how shitty Blockbuster was. The creator of Netflix rented movies from Blockbuster frequently, and was often charged late fees. Even after Blockbuster "did away" with late fees. I think the anecdote goes, he returned a movie and was charged a late fee. Upon complaining to the employee, the employee said, "You can always start your own video rental store", so he did.

      He created Netflix, which started as a mail order rental business with no late fees. It got popular because Blockbuster was shit and was really the only major chain renting movies at the time. Once Netflix went online, along with the rising popularity of pirated movies, it was all down hill for Blockbuster.

      I for one was glad to see Blockbuster die, and I'm even happier to see cable die. Netflix is doing good with their original content and has a good selection of overall (and I'm Canadian using the Canadian Netflix). The wife and I cut our cords over a year ago now. We get a lot of content from Netflix now (mostly for our 4 yr old) and use Kodi for a few cable programs Netflix doesn't have that we enjoy. Being on the East coast I got tired of paying cable fees for the three or four shows a season we watch that were always on so late it was a struggle to decide if we stay up to watch them and be exhausted the next day or go to bed early and skip watching TV. Sleeping often won and we eventually just got rid of cable since it was expensive and we didn't use it.

      The problem now is our cable provider is also our internet provider (There's only two ISPs in our area) and they're just jacking up internet prices to compensate for the drop in cable subscriptions. They'll get their money one way or the other. Eventually they'll probably charge Netflix, on top of us, to deliver their content so they'll get paid on both ends as the middle man.

    3. Re: Meanwhile... by 0100010001010011 · · Score: 4, Insightful

      Netflix, Amazon Prime and Comcast's "X1 on Demand" have now caught up with how I was pirating and watching shows a decade ago. I didn't even know "binge watching" was a thing, I would just get an entire series and watch it and move on to the next series. It's what I've always been asking for but Comcast said "nah, you'll watch it on our schedule". Blockbuster required me to make an additional stop in my my way home. I could queue up a movie before I left work/school and watch it that night.

      The easier it has been to get new, good content for a reasonable price the less I pirate.

    4. Re: Meanwhile... by Vanderhoth · · Score: 3, Insightful

      isn't that illegal under current laws?

      Probably, but I doubt a little thing like "the law" would prevent them from finding some work around.

    5. Re: Meanwhile... by dgatwood · · Score: 3, Insightful

      Netflix didn't "start as mail order" and then "switch to online". ... It was ALWAYS online. It was always DVD only.

      The term "mail order", at least in post-1921 usage, refers to the means of product delivery, not the way that the product is ordered. We still call it "mail order", whether the ordering happens by mail, phone, or the Internet. The vast majority of mail order businesses do not take orders by mail.

      So yes, the GP was completely accurate when it described Netflix as being a mail order company originally, then switching to online (streaming) delivery.

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  2. TV ratings methodology by retroworks · · Score: 3, Insightful

    The Nielsen ratings have never rally been without major sampling error, methodology and fallacy. If they really want the traffic numbers, they can get them from Comcast and other cable networks. And after reading the article, it's actually more just a complaint and response to a complaint than "escalation". Move along, nothing to see here.

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    1. Re:TV ratings methodology by penguinoid · · Score: 4, Insightful

      The Nielsen ratings have never rally been without major sampling error, methodology and fallacy.

      Yet probably still better than trusting a cable company to self-report how much ad revenue they should be getting.

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    2. Re:TV ratings methodology by PopeRatzo · · Score: 3, Insightful

      I will say that competition has been good for broadcast TV. They've started upping their game in the last few years. There's room for both I feel.

      You're right. Let them compete for viewers.

      The broadcasters complaints about Netflix not having to release viewership numbers is just silly. Who cares about Nielson ratings when you're not selling advertising anyway? My biggest worry about Netflix is that they're going to want to start adding commercials. I still remember when the big selling point of cable television was "it'll be commercial free because you're paying subscription fees".

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    3. Re:TV ratings methodology by Beavertank · · Score: 4, Insightful

      That's the exact reason I refuse to use Hulu, either in the free or paid version. They want me to not only pay for their service, but also sit through mandatory ads? Yeah... no. That's why I ditched cable in the first place.

    4. Re:TV ratings methodology by Anonymous Coward · · Score: 3, Insightful

      Netflix may not have ad revenue, but they negotiate rates with content providers based on the number of times the content is watched.

      Your show sucks, and nobody watches it on Netflix? Not only will Netflix pay you less for it, when time comes to renew, they may drop it altogether unless you agree to take even less again.

      Your show is awesome and everyone watches it on Netflix? Netflix will pay you more to make sure their subscribers can still come to Netflix to watch it instead of going to Amazon or whoever else.

      This is the heart of the dispute. Netflix can claim whatever viewership they want. The content owner cannot verify this because that information is proprietary, unlike for their own content. But Netflix knows what their numbers were on TV so they know the popularity of something before they buy it. But once they do, the owner has no way to know if the title has gained, lost, or held its value because they don't know the viewer numbers. It puts the power very much in Netflix's hands because they have perfect information while the owner has imperfect. It would be like you trying to play chess against someone with invisible pieces while yours are visible--do you think you could win?

  3. Can't have it both ways? by houghi · · Score: 3, Insightful

    I agree that you can't have it both ways. That is like saying a movie is making a lot of money and at the same time claiming it is losing money.

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  4. Attn: traditional TV networks by MachineShedFred · · Score: 5, Insightful

    We, the viewers, hate you. You are sliding down a slight but increasingly steep slope into the deep dark hole of irrelevance and you don't even know it. It shows that you don't know it, because you increasingly devote time on your networks to advertising, at the expense of quality content. You continue with a business model of stretching out fairly mediocre and predictable stories over two or three hours, spread across two or three arbitrary 'ratings' weeks in order to inflate your own numbers, while admonishing Netflix for being dishonest.

    You fought tooth and nail against VCRs. You fought against DVRs. You now fight against online streaming. All of these technologies actually make experiencing your content better, yet you still fight them. We see through your bullshit, and we've found a content delivery paradigm we like better: all-you-can-stream for a low monthly charge. No advertising at all. All episodes of a season, and past seasons, available RIGHT NOW.

    As soon as someone cracks the hegemony largely preventing the streaming of live sports without having a cable or satellite subscription, you're done. And you still continue on like it's 1983. And what you don't realize, is that we can't wait to fire you for being completely inept in your own business and refusing to innovate in even the slightest ways.

    Stop clutching at the past, and embrace the future, before the future holds a pillow over your head and we all rejoice.

    Warm regards,
    Everyone

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    1. Re:Attn: traditional TV networks by Thanshin · · Score: 4, Insightful

      You do not speak for everyone.

      As an AC, you do not speak for anyone.

  5. Netflix doesn't need external ratings by Anonymous Coward · · Score: 4, Insightful

    Why do viewer numbers matter for Netflix? They don't show ads, so they don't have to put a value on their equivalent of airtime. The ratings are only relevant to them internally when deciding which content will gain/lose the most subscribers.

  6. Commercial interruption before each act by tepples · · Score: 3, Insightful

    The only way I will tolerate commercials is if they are placed at the beginning or the end of the programming.

    Providers can accommodate the letter of your request by redefining "the programming" as a single act of the play (or screenplay or teleplay), or what would become a single chapter of the DVD, or the like, and then deeming a whole movie to become a playlist of several such "programmings". Would that satisfy you?

    1. Re:Commercial interruption before each act by nehumanuscrede · · Score: 3, Insightful

      Providers can accommodate the letter of your request by redefining "the programming" as a single act of the play (or screenplay or teleplay), or what would become a single chapter of the DVD, or the like, and then deeming a whole movie to become a playlist of several such "programmings". Would that satisfy you?

      It would not. The same practice under a different name would just put the final nail in their own coffin.

      Can you imagine how much the movie industry would suffer if they stopped the film every fifteen minutes so they can feed you ads about what medications you should be asking your doctor about ? Or why driving a $manly-vehicle in $state is manly ? No one would go. The movie industry would implode overnight.

      If television wanted to emulate the movie approach where they set aside the advertising block ahead of the main show, I would be cool with that. Or, they could do it at the end of the show. Would be cool with that too.

      Sprinkled within the show every ten minutes or so ? Not so much.