A lot of people seem to assume a network-TV economic model applies to netflix, where ‘ratings’ are inherently good, and high rated shows beget renewals, and so on…
But, Netflix subscriptions are much more in the ‘gym membership’ economic model.
People watching shows on Netflix costs Netflix money. They would much rather take your money and have you not watch anything.
The ideal Netflix subscriber is someone who won’t cancel because they think they might want to watch something some time, but who whenever they browse the shows decides not to bother starting a show right now.
This strategy seems optimized for maximizing that audience.
I don't really think this makes sense - they pay a relatively large engineering team, and they spend an inordinate amount on purchasing content to get engaged viewers. The cost of servicing the viewers is probably fairly trivial given the peering agreements they currently have in place and their distributed content infrastructure.
I think the real problem is that if you're very measurement based - you make poor product decisions. You might be able to optimize all sorts of metrics, but if you can't measure it (or measuring it is hard/noisy/laggy), you tend to lose sight of it.
In this case - Netflix isn't adequately measuring consumer satisfaction, and they haven't ever really been able to measure show quality without long term viewership numbers.
At best, they correlate show quality with viewership, but that's a tricky game, and it's often a very laggy measurement - viewership at release is a very poor gauge. Netflix became the behemoth they are today by focusing on the long tail of shows - shows that had consistently moderate viewer counts over a long period of time - rather than focusing on boom and bust blockbusters.
Personally - I think they're fucking up. I also cancelled this year after more than a decade.
I know what you are saying but from what I understand the network costs per user are pretty negligible. I think its more that if a show is not a hit and does not become a big draw for users Netflix will nix it especially because the way most deals are done subsequent seasons cost them much more than the first.
I have read the above in the past but can't find a good source at present as I am on mobile so apologies.
The point is just the relationship between show quality, show production/residual cost, and viewership, and subscription signups/renewals is waaaaay more diffuse than it is for ad funded networks.
We don’t have their data. They are so gun-ho on cancellations for a reason. I presume it’s because people who never watch Netflix end up unsubscribing at a steady rate, so they need to woo them back.
Hence, new exciting shows they’ll hear about from outside Netflix to get them back in the app.
But, Netflix subscriptions are much more in the ‘gym membership’ economic model.
People watching shows on Netflix costs Netflix money. They would much rather take your money and have you not watch anything.
The ideal Netflix subscriber is someone who won’t cancel because they think they might want to watch something some time, but who whenever they browse the shows decides not to bother starting a show right now.
This strategy seems optimized for maximizing that audience.