Netflix's Top-Heavy Show Approach Evolves With Spending Shifts

The following is a selection from Brandon Katz of Parrot Analytics.

The graph below, from Parrot Analytics, looks at the average audience demand for all Netflix shows since 2015. Of course, the most well-known and popular series enjoy higher demand levels, but the majority of shows fail to resonate (one reason why streamers have fought against transparency is to conceal this very fact from Wall Street).

• Basically, for every Stranger Things and Squid Game that emerges as a breakout broad appeal hit, there are numerous forgettable misses that generate demand levels around 1x or lower. 
• The average demand for Netflix shows has been declining since a spike in 2020, from 2.7x to around 2.0x in 2023; which coincides with public comments from Netflix leadership in recent years about stabilizing the content budget.
• As the company continues to mature and face stiffer competition, it’s no longer about unearthing a game-changing hit every quarter to make up for the caravan of content that goes nowhere.
• It’s now about focusing original programming spend on what works (Squid Game reality series spinoff!), strategically licensing, and building a library that improves the perceived value of the entire service. 

[read the rest of Brandon Katz's post on TVREV]