Too Much TV: Your TV Talking Points For Thursday, July 25th, 2024

The Moneyball of streaming TV

Here's everything you need to know about the world of television for Thursday, July 25th, 2024:

THE MONEYBALL OF STREAMING
If I could define one difference between my take on the business of streaming versus most of the other media analysts in the business, it's the way we measure success. 

Too many reporters continue to see success in streaming through the lens of how success was defined at the height of the linear TV business. You look at how much a title costs, and compare that to how many people watched it. That viewer number allowed you to extrapolate some measure of success because the raw number of viewers - especially ones in the 18-34 demo - directly impacted how much ad revenue was going to be spun off.

And you can see reporters trying to apply that same sort of metric to the streaming business. They look at what viewer numbers are available and the budget estimates and then attempt to frame a release as a success or failure.

The problem is those comparisons provide only a slice of what is going on strategically and I'd argue that the streaming business lives and dies on a streamer's ability to execute a "Moneyball" approach to their bottom line.

The idea came to popularity after the success of the 2003 Michael Lewis book, Moneyball: The Art of Winning an Unfair Game. He detailed how the budget restrained Oakland A's were able to outperform their much bigger baseball rivals by using analytics to help the team exploit "market inefficiencies" in finding baseball players that can help you win. So rather than chasing the most expensive free agents, the team realized that one of the market inefficiencies was that players who got on base a lot (OBP) were overlooked, so the A’s could sign players who were talented at OBP for cheap. The challenge is that the "market inefficiencies" are constantly evolving, and the strategy becomes more difficult to successfully execute once everyone begins doing the same thing.

The central premise of Moneyball is that the collective wisdom of baseball insiders is subjective and often flawed. You can use data to exploit their blind spots and get the best outcome for the least expenditure. And that approach also works well in other industries, including streaming.

This approach is really the way Netflix executives approach their overall strategy for success. As I have written before Netflix (and to some extent, all the major streamers) value content and ultimately the success of the business on a wide range of factors:

A primary Netflix metric is called the "adjusted view share," which is a combination of more than 30 factors that attempt to assign an overall "value" for any piece of content. An example I was given was that it's possible to track which content was most watched by brand-new subscribers last month. That content would be considered more valuable because it presumably was one of the reasons why viewers subscribed. But if those viewers exit after a month or two, that lessens the value of the content. The assumption is that some percentage of the canceled subscriptions came from people who subscribed primarily for a specific show.

It depends on where people are watching. A show that is more popular in a region such as the U.S., where the ARPU (average revenue per user) is higher has a greater value than one that tracks more in regions where the ARPU is lower. Although that indicator is weighted less than some others and whether the content is attracting subscribers in a territory where subscriber retention costs are high also factors into the equation. Netflix also tracks how many people complete a TV show within a week, the percentage of people who rewatch a series (although if the number is too high, it's discounted as possible fan manipulation). And there are many more. Each of the factors is weighted differently and the weighting can apparently change as the company's strategy evolves.

So Netflix applies a "Moneyball" approach when it comes to deciding where to spend money and how much. It has less to do with the success or failure of an individual title and more about the mix of decisions that leads to the desired outcome. Which in the case of Netflix is essentially to grow the subscriber base, keep churn as low as possible, and balance the needs of an incredibly diverse global audience with viewing tastes that can vary wildly from territory to territory.

If Netflix has one creative goal, it's to present what seems to be a never-ending stream of new stuff in as wide a spread of genres and budget points as possible. It overspends on original movies starring globally recognizable names because it needs to have some percentage of those titles in the catalog. But then it needs to use its own version of Moneyball to balance those big-budget projects (which help keep Netflix's churn rate well below rivals) with a mix of carefully chosen licensed titles. And if you haven't noticed, Netflix has gotten very good at licensing films that didn't do well at the box office but that also feature known stars. The films can be picked up at a bargain, although Netflix will often overpay the going market rate in order to get exclusive rights for a short period.

The most recent example of that strategy is the film Land Of Bad, a 2024 movie starring Russell Crowe, Liam Hemsworth, and Milo Ventimiglia was released in theaters in February of this year and while the budget for the film was a reported $18.5 million before marketing, it only grossed around $6.5 million. I have no idea what Netflix paid for the film, although these deals are typically done based on some multiple of the box office.

And here is where the Moneyball part comes in. The film topped Netflix's movie charts in the U.S. for a few days and remains in the top ten. Co-written and directed by William Eubank, the action film is well-made and moves along at a rapid clip. It's a solid movie and because the film under-performed during its theatrical release, I suspect a lot of subscribers just assume it's another Netflix original. Especially since the streamer continues to crank out a number of similar original films in this genre.

Land Of Bad isn't likely to be a massive hit for Netflix. But given its cost, it's likely profitable based on the streamer's complex content valuation. Successes such as this one help pay for films such as Rebel Moon, which are often more valuable as branding exercises than financially.

TWEET OF THE DAY

THIS SEEMS LIKE A GREAT IDEA FOR A TV SERIES
The iconic downtown Minneapolis club First Avenue (it's where the concert scenes for "Purple Rain" were shot is running a musical competition which just seems perfect for television. The club drafted 25 local musicians, put them into five bands and gave each 48 hours to write original songs. The new supergroups will perform their music tomorrow night at the club. 

There have been a number of attempts to launch a successful musical group series and most of them haven't lasted past one season. But this idea - assuming it's well executed - could work very well.

ODDS AND SODS
* Speaking of strategy, Pluto TV's senior VP of international content programming and acquisitions, Katrina Kowalski, talked with World Screen and the 21-minute interview is well worth watching if you're interested in the global FAST business.

* Hulu has picked up another 20 episodes of The Kardashians.

* Apple TV+ announced the new six-episode documentary event K-Pop Idols which will premiere globally on August 30th, 2024. “K-Pop Idols offers fans an unprecedented backstage pass to the world’s biggest musical phenomenon, with a behind-the-scenes look at the highly competitive reality of K-pop stardom, featuring beloved artists Jessi, CRAVITY and BLACKSWAN."

* Apple TV+ has picked up a second season of the kids original series Camp Snoopy.

* On Thursday, Hollywood’s video game performers voted to go on strike starting at 12.01am Friday.

* NatGeo has announced that the true crime limited-series Killer Lies: Chasing A True Crime Con Man will premiere Wednesday, August 28th. According to the network, the series tracks "New Yorker’s Lauren Collins' investigation into the rise and fall of a provocative French serial killer expert, Stéphane Bourgoin, who built an international reputation for his extraordinary resume, personality quirks and morbid encounters. After citing a violent and horrifying origin story as motivation for his relentless pursuit to understand the minds of murderers, Bourgoin becomes the target of a group of online sleuths who try to untangle his web of lies and unearth the truth. The series fully reveals their dogged investigation and the shocking extent of Bourgoin’s deception for more than 30 years."

* NatGeo also announced the new limited series Cursed Gold: A Shipwreck Scandal, which will premiere Sunday, August 21st. The three-part series "tells the true story of maverick scientist Tommy Thompson and his resourceful team who stunned the world in 1989 by recovering three tons of gold from the bottom of the Atlantic Ocean from the famous 1857 shipwreck, SS Central America."

* The USA Network has greenlit a reboot of the comedy-horror series, Scare Tactics, this time hosted by Jordan Peele. It will premiere this fall.

* The BET+ original series Tyler Perry's Ruthless returns for a fifth season on Thursday, August 8th.

WHAT'S NEW TONIGHT AND TOMORROW

THURSDAY, JULY 25TH:
* Cirque du Soleil: Without A Net (Prime Video)
* Cobra Season Three Premiere (PBS)
* Domino Day Season One Finale (AMC+)
* Hart to Heart Season Four Finale (Peacock)
* Kleo Season Two Premiere (Prime Video)
* Primos Series Premiere (Disney Channel)
* Shadrach Series Premiere (Great American Pure Flix)
* The Ainsley McGregor Mysteries: A Case For The Winemaker (Great American Pure Flix)
* The Decameron Series Premiere (Netflix)
* The Kardashians Season Five Finale (Hulu)
* The Killer With No Name (LMN)
* The Responder Season Two Finale (Britbox)
* Tokyo Swindlers Series Premiere (Netflix)
* Troppo Season Four Premiere (Prime Video)

FRIDAY, JULY 26TH:
* Antiques Roadshow Recut Season Four Premiere (PBS)
* Brambleton (PBS Kids)
* Elite Season Eight Premiere (Netflix)
* House Of Ga'a (Netflix)
* Love After Lock-Up Season Premiere (WE tv)
* Non Negotiable (Netflix)
* Olympic Games Paris 2024 - Opening Ceremony (NBC/Peacock)
* Olympic Highlights With Kevin Hart And Kenan Thompson (Peacock)
* Playground Series Premiere (Hulu)
* Pulang Araw (Netflix)
* The Dragon Prince (Netflix)
* Wonderland (Netflix)

SEE YOU ON FRIDAY