CBS Blames Netflix For Its Own Secrecy Over Streaming Video Numbers

from the I'll-show-you-mine-if-you-show-me-yours dept

Thu, Dec 18th 2014 6:09am — Karl Bode

After spending the last few years suing the hell out of every and any disruptive TV innovation on the horizon (from Dish's Hopper to Aereo), CBS recently announced the launch of its own "All Access" streaming video service. The service, only available in 14 metro markets, lets users view CBS content the day after it airs on traditional television -- with advertisements included. It's a somewhat shaky value proposition, and when pushed this month to disclose how many subscribers the service has signed up since its October launch, CBS CEO Les Moonves not only refused to get specific, he felt the need to throw a jab at Netflix:

"Moonves would say only that CBS All Access was “ahead of projections,” but acknowledged that could mean as few as 10 subscribers...I've been extremely impressed with the product,” he said, adding that its subscriber base would grow as more affiliates sign up to provide a live feed of their stations’ programming over broadband...Pressed for a hard number of subscribers, Moonves replied, "When Netflix tells you how many people are watching House of Cards, we’ll tell you how many subscribers we have."

It should be fairly obvious that when you're a subscription service, ratings matter less than when you're a traditional broadcaster dealing with advertisers, but this faux outrage at Netflix secrecy was the tone CBS took for much of last week. Case in point is CBS's chief researcher David Poltrack, who couldn't help taking shots at Netflix's original series viewership numbers:

"The average adult watches 5.2 hours of content on Netflix per week, 3 hours of which are spent watching television programming of some kind. Netflix’s original series account for 6.6 percent of that viewing, David Poltrack, CBS chief research officer, said at a UBS conference today in New York. "Self-reported behavior is always subject to error,” Poltrack said. “But it’s all we have. If Netflix disagrees with anything I’m about to report, I welcome them to provide anyone with the correct numbers."

The irony is that CBS is part of an industry that's been intentionally burying its head in the sand when it comes to emerging cord cutting trends for years now, with companies like Nielsen lagging on tracking viewing on tablets and phones, and often obscuring data that tells the industry things it doesn't want to hear. Namely, that the current cable TV cash cow model has a hard expiration date that's coming up faster than executives think. Now contrast CBS's ratings and secrecy-obsessed mindset to Netflix, which points out that ratings aren't as important to the company because they can hinder the creation of good content:

"The reason we don’t give ratings is not to frustrate the press,” said (Netflix chief content officer Ted) Sarandos. “It’s an irrelevant measure of success for us."..."Maybe it has been necessary for the business of entertainment, but it’s been terrible for the creative side of television," he said. "I do think that the ratings discussion has been negative for television."

The end result has been the heavy catering to the lowest common denominator (oh hi, didn't see you standing there, reality television). Note that Netflix isn't saying ratings are worthless, just that they've traditionally been taken too seriously, and this logic only extends so far. Netflix last week premiered its $90 million magnum opus "Marco Polo." It has the second-most expensive budget on television right now, behind only HBO's "Game of Thrones." Early reviews are rather mixed and Netflix obviously isn't going to ignore viewership numbers for a venture of that scope, but the point remains that the traditional cable and broadcast industry has been so obsessed with ratings (quite often incorrect ratings telling them what they want to hear), it has sometimes struggled to see the forest for the trees.

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Filed Under: david poltrack, les moonves, numbers, ratings, streaming, ted sarandos, tv
Companies: cbs, netflix

42 Comments

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Michael, 18 Dec 2014 @ 6:25am

The service, only available in 14 metro markets, lets users view CBS content the day after it airs on traditional television -- with advertisements included

You can't compete with free! Well, you can't compete with free by providing the same thing in only a small area of the country a day later.

I'm sure they will blame the failure on piracy.
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- JEDIDIAH, 18 Dec 2014 @ 6:50am
  
  Back to the Future, or the past, not really sure...
  ...for different definitions of the word "pirate".
  
  I am fortunate that I can tune in my local CBS affiliate with a reasonable level of signal quality. I can use standard easy to use PC hardware to record any new shows on CBS.
  
  I don't need to stream CBS stuff from anyone.
  
  They are not HBO, or even AMC.
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  - Michael, 18 Dec 2014 @ 6:58am
    
    Re: Back to the Future, or the past, not really sure...
    I can use standard easy to use PC hardware to record any new shows on CBS.
    
    Only if the cable is short enough. Based on the Aereo ruling, size DOES matter.
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    - JEDIDIAH, 18 Dec 2014 @ 7:05am
      
      Re: Back to the Future, or the past, not really sure...
      As long as I am keeping it all to myself, I don't look like enough of a duck. Then again, the Supremes could trade one really bad legal theory for another.
      
      Although broadcast stuff is completely unencrypted...
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- jackn, 18 Dec 2014 @ 7:23am
  
  Response to: Michael on Dec 18th, 2014 @ 6:25am
  Wow. I can watch TV on the TV the day after it was broadcasted on the tv.
  
  how much does this service cost?
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  - Jeremy Lyman (profile), 18 Dec 2014 @ 8:12am
    
    Re: Response to: Michael on Dec 18th, 2014 @ 6:25am
    Yo Dawg, we heard you like Internet TV on your TV, so we put the TV TV on the Internet TV so you can put it on your TV.
    
    Money now?
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Anonymous Coward, 18 Dec 2014 @ 6:49am

Netflix are right, of course.
I don't have the slightest bit of pressure on me to sign up for Netflix to watch their exclusive content right now because there's no broadcast window. If I want to watch House Of Cards, but don't feel it's worth a month of Netflix to do so, I can wait until there are two series I want to watch and maybe subscribe for a month at that point.
Netflix still gets paid whenever I subscribe, they really aren't dependent on ratings the way broadcasters are. They'll get my viewing figure as soon as I sign up, whether that's now, or next year or not for a decade.

Makes sense to me.
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- Michael, 18 Dec 2014 @ 6:55am
  
  Re:
  It's not really the broadcast window.
  
  Television advertising is really based on how many people can be expected to view the commercial. Ratings determine those figures. They cannot control what ads are displayed to which people, so they have to use ratings to guess the number that they are selling to their advertisers.
  
  Since CBS's customers are advertisers, not the people watching the content, they have to justify pricing by the number of eyeballs they put an ad in front of. Netflix customers are the subscribers watching the content - and while it is important for Netflix to provide them a product they want to watch, they are not trying to justify ad prices within specific available content.
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Anonymous Coward, 18 Dec 2014 @ 6:55am

So pray tell, what is the advantage that makes this valuable to someone that hates a commercial enough to purposely not own a tv? I can't see a single one that would encourage me to buy another. I can think of a whole lot of them not to, starting with a waste of money, followed by why would I want a spy in the form of a tv in my living room, to why would I want more reruns of brain dead entertainment, ending with no advertisements which this plainly says isn't the case.

14 metro markets tells you they are hitting only the most populous areas and no where else. They are hoping for enough people to kick it off. What I see is the same problem as with newspapers. Why would I want to see day old news when I can get up to the minute on the net? Why should I play couch potato to dreadfully boring programs leveled at the moron brain level?
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- Michael, 18 Dec 2014 @ 7:02am
  
  Re:
  Actually 14 metro markets tells us that they have implemented it in locations where they have CBS owned and operated broadcast stations rather than affiliates that they have contracts with preventing them from doing this or are only available through cable providers with similar contracts.
  
  This is the "we don't want to mess with our current business model" approach.
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David (profile), 18 Dec 2014 @ 6:55am

There's another reason Ratings are not useful for Netflix
One major reason is that ratings look at who is watching a specific show when displayed at a specific time. Netflix's model lets people watch at their pace and time. You don't know when the eyeballs are coming....
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New Mexico Mark, 18 Dec 2014 @ 7:03am

Now THAT's Innovation
"The service, only available in 14 metro markets, lets users view CBS content the day after it airs on traditional television -- with advertisements included."

Watch the same show (with commercials) the next day? Wow! Thirty years later, CBS has re-invented the VCR, only they will probably limit the ability to fast-forward through commercials (if they are not doing so already). I mean, really, who could possibly compete with that kind of cutting edge technology totally geared toward customer demand?
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- Michael, 18 Dec 2014 @ 7:07am
  
  Re: Now THAT's Innovation
  They didn't re-invent the VCR, they have brought back the Boston Strangler!
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  - JEDIDIAH, 18 Dec 2014 @ 7:10am
    
    Taking ball... going home.
    ...which reminds me. I need to check to see if the DVD release of Time Trax has come down to reasonable level yet.
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Ninja (profile), 18 Dec 2014 @ 7:10am

Sounds like a MAFIAA exec alright.

Reporter: So your last movie was a failure amongst the critics.
MAFIAA: Yes, piracy is killing the studios, the Government has to do something!
Reporter: I'm afraid this is not what we are talking about. Do you have any idea why the movie was so badly accepted?
MAFIAA: These filthy pirates are doing it!
Reporter: ... The movie was mostly ignored in the file-sharing scene.
MAFIAA: ... That pesky Netflix...
Reporter: The movie is not available on Netflix yet.
MAFIAA: CURSE YOU GOOGLE! *drools*
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- RD, 18 Dec 2014 @ 8:17am
  
  Re:
  I'm flagging this as "funny" even though its not actually satire, but rather almost an exact reflection of reality.
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- RadioactiveSmurf (profile), 18 Dec 2014 @ 8:50am
  
  Re:
  It's the *drools* at the end that really gets me.
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Anonymous Coward, 18 Dec 2014 @ 7:11am

Speaking of the LCD...
"The end result has been the heavy catering to the lowest common denominator (oh hi, didn't see you standing there, reality television)."

I would like to propose that -- since cablecos are actively monitoring viewership anyway -- that they track who's watching "reality" TV programming by household and provide that list to governments...so that everyone living in a household that watches ANY reality television is banned from voting for four years.

This would assist in removing many of the inferior people from the voter pool, which in turn might help us elect slightly better assholes than the ones we elect now.

(Come now, do you really want anyone who watches "Duck Dynasty" anywhere near a polling place? Jebus.)
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- Michael, 18 Dec 2014 @ 8:15am
  
  Re: Speaking of the LCD...
  Actually, I think it is more likely to go the other way.
  
  I'm pretty sure elections are soon going to be a nightly show where candidates go through a series of tests (eating weird things, dancing, jumping through people-shaped holes) and voters will call an 800 number to vote politicians off. There will be a finally show at the end to select the winner.
  [ link to this | view in chronology ]
  - Tony (profile), 19 Dec 2014 @ 10:40am
    
    Re: Re: Speaking of the LCD...
    Hell - that would likely produce better politicians than we have now!
    [ link to this | view in chronology ]
- Anonymous Coward, 18 Dec 2014 @ 5:21pm
  
  Re: Speaking of the LCD...
  I was watching TV last night, and during the break between Ghost Megalodon and Bigfoot Nazi Bake-off there was a commercial that showed a phone number and passcode that would let me reserve a seat on something called "Ark Ship B." Is that something I should look into? Sounds important...
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John85851 (profile), 18 Dec 2014 @ 7:34am

Great advertising for Netflix
And Netflix issued this statement: We'd like to thank CBS for using us as the standard on which they make their decisions. We're honored that almost 60 year old TV network would think so much of us, considering we didn't even offer streaming service 10 years ago.
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Chronno S. Trigger (profile), 18 Dec 2014 @ 7:40am

Netflix doesn't have to keep track of individual shows because that information doesn't matter in their much more dynamic advertising system. Advertisers don't pay to be viewed at a specific time during a specific show, any advertisement can be viewed at any time by any one.

It doesn't matter to Netflix what people are watching, only that they are watching. This frees up Netflix to include the lowest common denominator show as well as take risks on the niche shows.
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Anonymous Anonymous Coward, 18 Dec 2014 @ 7:46am

The average of average

"The average adult watches 5.2 hours of content on Netflix per week"

I don't use Netflix. Does that make me above or below average?
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- Anonymous Coward, 18 Dec 2014 @ 7:53am
  
  Re: The average of average
  that would make you below average.. cause that is how averages .. work?
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- nasch (profile), 18 Dec 2014 @ 8:02am
  
  Re: The average of average
  "The average adult watches 5.2 hours of content on Netflix per week"
  
  I don't use Netflix. Does that make me above or below average?
  
  Well let's see, which number is bigger, zero or 5.2?
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- Dangleberry the Occasionally Confused, 19 Dec 2014 @ 3:59am
  
  Re: The average of average
  He doesn't say the average Netflix viewer, or even the average Netflix adult viewer, but the average adult viewer. To me, that means the average US adult. And, since not every adult in the US has a Netflix subscription, suggests that Netflix's own content is doing really well.
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Angel (profile), 18 Dec 2014 @ 7:50am

That this requires a cable subscription to access it makes it a non-starter for pretty much any cord cutters.
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beech, 18 Dec 2014 @ 8:15am

call his bluff
If I was at Netflix I would totally release some numbers for House of Cards viewership right now. Call his bluff, see what he does.
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- John Fenderson (profile), 18 Dec 2014 @ 9:22am
  
  Re: call his bluff
  I wouldn't. What would be the point? Let Moonves whine all he wants about it, there is no advantage to Netflix to release numbers that don't mean very much and there is no disadvantage to keeping them unreleased.
  
  Not to mention that Moonves is being duplicitous here: he's saying that CBS will release the number of subscribers (a measure that's the most important in this sort of space) if Netflix release the "ratings" of a specific show (a number that is of lesser importance in this space). In other words, he's trying to rig the debate by getting everyone to compare apples with oranges.
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  - Anonymous Coward, 18 Dec 2014 @ 11:09am
    
    Re: Re: call his bluff
    Netflix posts how many subscribers there are for their service. What's the difference with CBS?? They can't post the same thing, how many subscribers to their service?
    
    What am I missing?
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    - John Fenderson (profile), 18 Dec 2014 @ 12:23pm
      
      Re: Re: Re: call his bluff
      I suspect there are two things here. The first is that by subscriber count, the CBS service is completely insignificant in comparison to Netflix, and CBS doesn't want to make that fact more obvious than it already is. The second is that subscriber counts mean as little to CBS as show ratings mean to Netflix. CBS gets it's money from ads, and ratings determine how much they can charge for particular ads. Netflix gets its money from subscription fees. Once you've paid your fee, what (or how many) shows you watch don't affect their income.
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      - Frok (profile), 19 Dec 2014 @ 12:20am
        
        netflix bluffs hd
        ... except the use of bandwidth
        
        Throttling isn't limited to bandwidth constraints. "As many DVDs as [we allow] you want." Same mindset different tech.
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    - Frok (profile), 19 Dec 2014 @ 12:21am
      
      re: What am I missing?
      Gleefully embracing the draconia?
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Anonymous Coward, 18 Dec 2014 @ 8:36am

" it has sometimes struggled to see the forest for the trees"

..more like cutting down the trees to build condos.
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Anonymous Coward, 18 Dec 2014 @ 8:53am

"I do think that the ratings discussion has been negative for television."

Yes they have , When you invest your time watching a TV series , only to have it cancelled with no ending whats the point of watching it or anything that's ruled by how many people are watching on that particular night , I ..like many others binge watch , this is why the rating system is failing the nielsen ratings are outdated and overly utilized.
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dfed (profile), 18 Dec 2014 @ 10:11am

The real question is: Can CBS balme Netflix for NCIS?
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Anonymous Coward, 18 Dec 2014 @ 10:34am

Moonves is mouth breathing on
moron.

he doesn't even realize how stupid he sounds
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Anonymous Coward, 18 Dec 2014 @ 3:31pm

the really annoying thing is, after stopping everyone else from bringing out a service of some sort, it transpires that the stopping of the others was simply because it wants(ed) to launch it's own service. the problem being that it's own service is such shit that the 'more than projected number.....of 10 customers cant wait for tomorrow so they can watch yesterdays block busters, that had equally been stopped from being shown by the MPAA or member there of!! in other words, the anti-competitive actions have jumped straight in, but have been sanctioned by the stupid fuckers on the bench that find 'when it walks like a duck and talks like a duck it's definitely a sheep'!!
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Frok (profile), 19 Dec 2014 @ 12:19am

ethical usenet continues to win
cBS: all of the promise of ethical usenet with none of the benefits

On any device I want: nope

At actual HD bitrates/nonrapeyencoding: nope

...
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Anonymous Coward, 19 Dec 2014 @ 3:07am

lets users view CBS content the day after it airs on traditional television -- with advertisements included.

adding that its subscriber base would grow as more affiliates sign up to provide a live feed of their stations’ programming over broadband...

"Live" doesn't mean what it used to.
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Anonymous Coward, 20 Dec 2014 @ 1:31pm

Australian Free to Air copycats
Now that Netflix is coming to Australia, the Free to Air TV networks have decided to come up with the same "solution" as CBS has brought out. Great Minds think alike!!

Yep, they too are scared of any real competition & are fighting back the only way they know how, bringing their customers (the advertisers) with them, when many viewers have left the TV networks' customers on the shelf & chosen advert free alternatives. Not to mention skipping the brain numbing "reality TV" shows which are a blight on the entertainment horizon.
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