I’m sometimes amused by the degree of imagination and energy trade organizations like the Television Bureau of Advertising put into some of the analyses they do. Defending legacy broadcast television, particularly local television, in a landscape where media and tech companies continue to pour billions of dollars into growing streaming services, often at the expense of what top management considers dinosaur businesses, is anything but easy to do, particularly when you’re trying to influence advertisers, investors and media that is barraged by companies who specialize in what I term “clickbait information”–where a provocative enough headline can attract enough attention to warrant pickup by newsletters and social media to amplify a desired narrative.
TVB’s latest such attempt, which specifically went after Netflix’s ad-supported service, was successful in getting the likes of TVTech and its reporter George Winslow to report earlier this week thusly:
The TVB has issued new research on the audiences advertisers might reach via Netflix’s “Basic with Ads” tier showing the ad-supported streaming tier has extremely limited reach compared to the audiences of local TV.
“Netflix’s reported audience numbers for its ad-supported tier, ‘Basic with Ads,’ are an estimated 600,000 ‘monthly active users.’ Importantly, this metric refers to subscribers, not viewers and Netflix ad-supported users pale in comparison to local linear TV viewing audiences,” said Steve Lanzano, TVB President and CEO.
“The comparison is extremely meaningful for the advertising community and brands. On a typical evening in November (11/9/22) in the New York DMA alone, Nielsen reports that 1.6 million adults 18+ were reached by local broadcast TV stations’ early news between 5PM and 6:30PM,” Lanzano continued. “Early news reach in the New York market was nearly triple the number of Netflix’s reported universe for its ad-supported tier.”
The TVB estimates reveal that on the same night in November (11/9/22), in Grand Rapids, MI (DMA 42), local news airing on NBC, CBS and Fox affiliates 5PM-6:30PM would out-deliver Netflix’s top three programs with ads: “The Crown” (5,040), “Love is Blind” (4,440) and “Enola Holmes 2” (1,860). Grand Rapids evening news adults 18+ impressions for the same day and time slot included: WOOD (115,734), WWMT (100,835) and WXMI (24,546).
As Leonardo DiCaprio uttered so eloquently in DJANGO UNCHAINED:
So I began to try and grasp what the intent of this particular comparison may have been. November 9th just happened to be the day that the fifth season of THE CROWN dropped on Netflix, ostensibly the night where in a traditional media landscape the largest possible audience would be reached. And Grand Rapids, for decades, was the largest Nielsen DMA that was not measured daily by either persons or household meters–so a number that likely wouldn’t be easy for clickbait journos to quickly dig up context against, and likely beyond the pay grade of even ChatGPT.
But my LinkedIn colleague Edward Papazian has been picking apart numbers for a long time, and better than almost anyone on Earth, via his Media Dynamics consultancy and with a history in agency research leadership daying back to the 1970s. Certainly more auspiced credentials than many current journalists who respond to clickbait these days. So he and I had a little exchange about this, and here’s how he diplomatically provided some more nuanced context:
Can’t speak for TVB, but if we assume that the Netflix ad supported service has a mere 600,000 subscribers—that’s households, I assume—then that means there are about 1.6 million residents in such homes. If we assume that Netflix’s ad-supported service does as well among such persons as it does nationwide with its far larger SVOD service, this translates into a share of viewing across all, dayprts of around 7-7.5% which results in an average minute person’s rating of roughly 1.4-1.5%. Multiply that rating against the assumed population coverage of 1.6 million and you get somewhere between 20,000 and 25,000 average minute “viewers” across the whole country—which is a pretty small figure. Note: these are all approximations.
So let’s give The Crown the benefit of the doubt. It’s entirely possible that THE CROWN did indeed beat WXMI’s newscast on one optimal fall evening. But this particular clickbait diminishes what I believe are the more significant takeaways.
Netflix’s attempt to pivot from a subscription-only service–where success is best determined by who pays and not who watches–is crucial to whatever hope one wants to pin on its attempt to get its financial challenges in order, and their struggles are echoed by its many competitors who continue to pour resources into trying to get to even a fraction of their footprint. But in doing so, they not only have to get people to subscribe to the ad-supported tier, they have to get people to watch. Monthly average users (MAUs) are the streaming equivalent of reach, which is one important component of a video ad campaign. 600,000 was Netflix’s baseline subscription level; November 9th was days after the tier’s availabliity in the U.S. began. Recent reports have indicated that they’ve grown that number since then. But other reports have indicated that Netflix in any form is available to 174 million U.S. subscribers. A 600,000 ad-supported universe means 99.997% of all Netflix subscribers weren’t even available to watch any ads. And even Papazian’s outside estimate of 25,000 suggests only a 4.0 rating in prime time for the premiere episode(s) of an award-winning series whose new episodes were anticipated for more than two years, and for which Netflix backed up the Season 5 launch with an eight-figure ad spend.
In fairness, virtually no episode of any linear television series approaches a 4.0 rating these days. And Netflix sells reach, as every ad-supported episode it offers can be seen 24/7, so to many advertisers there is no significance to a daypart like prime time. Or, for that matter, the any specific date. But many advertisers DO care about timing, particuarly those who tend to pay higher CPMs like automotive and theatrical. And they care about frequency, which if they were buying a cable network’s prime time offerings they would receive, which they don’t necessarily get when they buy a run of Netflix. They do get THE CROWN, but they get a lot of other less significantly viewed programs that may or may not offer an equivalently optimal environment.
Here’s a clickbait option perhaps TVB never considered. If you likened THE CROWN to a linear cable network’s average prime time audience in 2022, that upside of 25,000 viewers would be roughly 19,000 adult viewers and would have ranked 141st out of 159 measured networks in 2022, tied with FOX Sports 2 and The Olympic Channel. Since Netflix is available nationally, one would have thought that could have been a better comparison. But at least when one buys a schedule on FS2 you’re getting frequency and a consistent ad environment. As we’ve said, not everything on Netflix is THE CROWN.
I understand the goal of the NAB is to support the raison d’etre of all television, including local TV stations, and using something as buzzy as the top show on what they see their families watching when they come off their commuter train (or, these days, out of the downstairs office) may be what they think is an effective narrative. But when you’re competing with the likes of companies who are looking for their own share of clickbait voice in a world where Nielsen is no longer the sole option for accredidation, you perhaps have to be a bit more detail-oriented, As another veteran observer, Joe Mandese of MediaPost, noted yesterday, there are companies out there who are capable of referencing numbers out of thin air:
The Super Bowl viewing analyses I’ve received so far this week included ones for iSpot, Samba TV, NetBase Quid, Captiv8, Sooth, and AdImpact. Others no doubt are coming later this week, but I want to single out the Ad Impact one explicitly, because it’s not even in the audience-measurement business.
AdImpact tracks ad occurrences and estimates how much advertisers spent on them in key categories, especially political, automotive, etc. So I was surprised when I got a Super Bowl viewing post-analysis, because the 884-word document references viewing/viewers/viewership 35 times, but never attributes what the source of its viewing data actually is. Update: After publication, an AdImpact spokesman described the source of its Super Bowl viewing data this way: “AdImpact collaborates with data partners to track a panel of 10 million smart TV devices.
They weren’t able to quite get past Mandese, but I’m sure they did get into the zeitgeist and minds of less seasoned decision-makers, whose decisions ultimately will impact jobs and stock prices. Every time I see good people being let go by companies who overreact to dour forecasts driven by clickbait journalism, I cringe. The last thing any of us need are fewer smart, experienced people available to do a better job at crafting and dissecting narratives that the likes of what the TVB released.
Yes. the bottom line of all of this is ultimately the same–streaming advertising isn’t quite at critical mass yet. But perhaps one shouldn’t pick on poor FOX 17 West Michigan in order to make that point?
Until next time…