By Hernan Lopez.
Companies mentioned: Dhar Mann Studios, Disney, HBO, Holywater, Fox, NBCU, Netflix, NFL, Paramount, Sony, UFC, WB, WWE, YouTube
Questions answered: Did the dog eat your engagement? What percentage of Disney’s and WB’s Streaming revenue comes from advertising? What is ARPU Parity? What is the Optimization Trap?
When Netflix gave its fourth explanation for slow-growing engagement over the last two years, I was not alone in wondering what was up. So razor-thin was the math that, for the first time, Netflix added a group of titles with low viewership, ensuring it could comfortably say engagement was up 2%.
The company had an otherwise great story to tell: record revenue and profits, and a new subscriber milestone (325M, up 25M in a year). But that raised another question: wouldn’t this imply that engagement per-subscriber went down? Netflix essentially admitted as much, noting as an example that if new members come from countries like Japan, where viewers watch less TV, they would drag down the average. Engagement in the US did grow, ending the year at a 9% share of US Viewing on TVs in December, according to Nielsen, a platform-best.
Management quickly pivoted to a qualitative explanation...