What Netflix viewing figures tell us about business
The business news that matter
Hello and welcome to the latest edition of Off to Lunch…
Netflix has released its most detailed information yet on what people use the streaming service to watch. It offers a fascinating insight into how to build a successful business.
The report shows that while certain products may get all the attention, it is less-heralded ones that can actually power a business. So while Netflix may use high-budget, superstar-filled original content like The Crown as a marketing tool to attract potential customers, it is broad content targeted at families and a back catalogue of older shows that subscribers then spend most of their time watching.
The report from Netflix covers the first six months of this year. The number one for Netflix is The Night Agent, a political thriller that attracted mixed reviews from critics. Number two and number nine are two separate series of Ginny & Georgia, a comedy-drama aimed at teenagers. Paw Patrol and Cocomelon, which are children’s shows, are also prominent on the list. In contrast, The Crown does not feature in the top 100.
Here are the top-ten shows…
You can find the full report here
Bloomberg has done a different version of the chart that groups the different series for each show together. This list highlights the importance of older shows like The Walking Dead and Suits…
You can find that analysis here
Netflix has previously been guarded about sharing data on what subscribers are watching. However, the company says that it now wants to share this data twice a year. “This is a big step forward for Netflix and our industry,” Netflix said in a statement. “We believe the viewing information in this report — combined with our weekly Top 10 and Most Popular lists — will give creators and our industry deeper insights into our audiences, and what resonates with them.”
There are some issues with the list to flag. For instance, by measuring shows by the number of hours watched it is biased towards those with more episodes. Also, the report does not cover what proportion of Netflix subscribers are watching certain shows.
As a reminder, Netflix is now valued at more than $200 billion (£160 billion). Its share price graph is below…
Podcast…
The new episode of our Business Leader podcast launched yesterday and it looks at one of the most promising new businesses being built in the UK. We speak to Alex Kendall, the co-founder of Wayve, about why his London-based company may hold the answer to self-driving cars being on our roads, not the tech giants in Silicon Valley or the automotive industry in Detroit.
You can listen to the episode on Substack here, Spotify here or Apple here
Other stories that matter…
1. The UK economy shrunk by 0.3 per cent in October, the latest data from the Office for National Statistics has shown. That drop was unexpected. Economists had forecast that the economy would be flat, according to a consensus forecast compiled by Reuters. The 0.3 per cent contraction follows growth of 0.2 per cent in September. You can find more details from the ONS here. Despite this, bars and restaurants are reporting bumper bookings for December so far, according to an analysis by the Financial Times here
2. Sticking with economic growth, the British Chambers of Commerce has warned that businesses are having to deal with an “anti-growth situation” in the UK. Shevaun Haviland, director-general of the BCC, told the FT there was a “lack of people” and “lack of investment”, adding: “Those two things of course go hand in glove because if you are thinking about investing in an expansion or new kit but you can’t find the people to make that happen then you’re not going to do it.” You can read more here
3. The Littlewoods building in Liverpool, a grand piece of art deco architecture that was the headquarters for the company behind football pools, is being redeveloped into new film studios. Story by the Liverpool Echo here
4. Harvard Business Review has published a guide on how to pitch unconventional ideas that can change the strategy of a business. The tips include choosing the right opportunity to make the pitch and framing your idea as a question. You can find the guide here
5. On a similar note, Amazon founder Jeff Bezos says the best leaders are able to adapt and evolve their approach as they get more information and reconsider a problem. You can read more on that in an Inc article here
And finally…
The Japanese baseball star Shohei Ohtani has agreed to join the Los Angeles Dodgers in a remarkable deal.
Ohtani has signed a 10-year contract worth $700 million (£559 million), the most lucrative sports contract ever. However, what makes this contract particularly remarkable is how it has been structured. Ohtani will take home just $2 million a year over the next decade before getting $68 million a year from 2034 to 2043. Structuring the deal in this way means that the Dodgers have more flexibility to invest in other players.
John Authers, the Bloomberg columnist, says the deal will be the subject of MBA case studies for years. “What’s most interesting is that Ohtani happens to be from Japan. He was born in July of 1994, and thus cannot remember rates of even 1%,” Authers writes. “Three-month Japanese bonds have been yielding less than that since shortly before he turned two. For his generation of Japanese, and indeed those 10 or 20 years older, the Time Value of Money has been an irrelevant and academic concept for as long as they can remember; $1 million in 10 years’ time is worth just as much as $1 million today, if you don’t need it now.”
You can read more on the contract by the BBC here. The column by John Authers is here
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Best
Graham