If Netflix Is No. 1 U.S. TV Network -- And It Doesn't Sell Ads -- Should You Care?

A media critique by Wayne Friedman, Staff Writer Monday, Feb. 22, 2016   Folks everywhere from NBCUniversal to Nielsen and comScore are wondering: What are the viewing numbers for Netflix? Still, execs at traditional TV networks may be just rolling their eyes and thinking, “Netflix doesn’t sell TV advertising, and that means they don’t compete with us. So who cares?” But there are those 43 million Netflix subscribers who are watching lots of TV -- viewers who aren’t watching other things. Many analysts have pointed to a direct association between Netflix viewing and erosion for some traditional TV networks. Howard Shimmel, chief research officer of Turner Broadcasting, recently offered some eye-opening numbers. ”Based on our methodology," he said, "Netflix was the number-one rated TV network total day, U.S.-based.” Are you interested now? If TV viewing is turning to more advertising-free subscription VOD services, TV executives want to know. "Netflix reports its gross streaming hours," Shimmel said at the Media Insights & Engagement Conference, according to advertising publisher/consultant, Warc. "We've built a methodology at Turner to [assess] the Netflix numbers. We estimate how much is U.S. versus international, how many people per stream are watching, and how much is on the big TV, versus on some other device. "Is it a perfect measurement? No. Do I feel better, as a researcher, giving my management some line of sight that's based on some data and instincts and what I believe to be a pretty solid rationale? I think the answer is, 'Yes.'" And that’s the key. Forward-thinking TV executives increasingly need to think about the fast-changing media-TV ecosystem. At some point, they assume, there will be more fractionalization of media. But unlike others before it, Netflix doesn’t want any third party to measure its viewership. It is not important to its business, the company says, where it has its own first-party, heavily detailed digital data not encumbered by old TV viewing formulas. For competitors, it’s a different story. This isn’t 1992, when advertising-supported cable networks were still of little consequence to the broadcast networks, and premium cable networks like HBO and Showtime were niche viewing players. The big shifts have come, at least in part, from a company that doesn’t sell -- nor want -- traditional TV advertising.