The Price Of Engagement: How Streaming Platforms Now Make More With Less

In 1H23, Netflix spent $73 per thousand viewing hours making and licensing TV and films.

If the above sentence makes you cringe, read on.

If you’ve worked in entertainment long enough, you know that averages are meaningless. Of course. What use could you possibly get from knowing what’s the average cost per episode of a scripted TV drama in 2024? “I’d like to make an average TV show”, said no one ever. Creative ambition and budget consciousness have long been thought as anathema to one another, even as the industry cycled through periods of belt-tightening and euphoria.

To say we’re in a period of belt tightening is an understatement. But this one is different: it comes with data that will make comparisons only more relevant and more frequent. 

It’s easy to dismiss a comparison between the budget of a Game Of Thrones versus a procedural drama. But when every platform is looking to make the economics of streaming work, it is logical that they’ll wonder: what’s the cost of adding – or retaining – the next viewer?  

I’ve long been fascinated with that question, as well as its counterpart: what’s the next viewer worth?  For this article, let’s focus on cost.

The Netflix Christmas Gift

Last December, Netflix surprised the world by releasing global viewership data for 18k titles for the first six months of 2023. Since then, we’ve been combining that data with other sources, to help our clients better understand viewing patterns around the world and how they tie back to unit economics. With titles categorized by language, release year, production company, genre, and other variables, we can see areas of increased interest, including unscripted, or shows produced in Korean or Spanish. We can also see the huge engagement derived from long-running, studio-owned library shows, which wasn’t apparent from the initial ‘season by season’ rankings released by Netflix. 


But looking at the ‘big picture’: 

  1. Netflix now sees Viewing Hours as their KPI, likely because they predict retention
  2. Collectively, their subscribers watched 94 billion Viewing Hours in 1H23
  3. Netflix spent $6.9bn making and licensing TV and films during that period
  4. Thus, Netflix spent $73 per thousand Viewing Hours (from now on, “CPMVH”)

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