Too Much TV: Everything You Know About The Streaming Business Is (Probably) Wrong

Here's everything you need to know about the world of television for Thursday, April 24th 2025:

EVERYTHING YOU KNOW ABOUT THE STREAMING BUSINESS IS (PROBABLY) WRONG
There is a lot of misinformation about the streaming business. In part, it's because streamers such as Netflix are notoriously uninterested in explaining their business model to the industry or to the public.

But an equally challenging problem is that many of the reporters writing about the industry came up in the cable bundle era. Which for all of its many upsides, also had a very different revenue model and cost stream.

This newsletter has picked up a large number of new subscribers over the past few weeks, so it seems like a good time to link to some of my older pieces which dive into the less familiar intricacies of the streaming business. I've been able to speak to a lot of executives on background over the past couple of years and I think that experience provides me with a slightly different perspective of the streaming business than many reporters.

So here are some pieces I think will be useful as you navigate the non-linear TV future that awaits us all:

The Profitability Of Streaming TV And The Innovator's Dilemma
That's where we are in the life cycle of the streaming video business. Disney and Warner Brothers and then Viacom/Paramount didn't move into the streaming video business because they were hypnotized by the magical thinking of Netflix. At different levels, they saw the underlying weaknesses in their linear businesses and identified that streaming was the only business out there that was capable of eventually providing anywhere close to a comparable revenue stream down the line.

What these media executives either didn't understand or underestimated was the challenging and steep curve of streaming video's technology life-cycle (TLC). Think of any successful technology as looking like an "S" or a bell curve. Building the business requires a huge capital investment on the front side of the curve. That often means substantial losses and the prospects of failure are high. But if you execute successfully, the TLC matures. Investment costs drop, profits rise and the resources needed to continue to grow the business decline substantially.

You can't build a new business without a great deal of financial pain. And that's not one or two quarters of losses. That means deciding that if it requires torching existing business models to get there, you believe in this idea enough that you are willing to gamble everything in pursuit of success.

Why Does Netflix Decide To Cancel A Show? Spoiler: The Answer You Have Is Probably Wrong
A primary Netflix metric is called the "adjusted view share," which is a combination of more than 30 factors that attempt to assign an overall "value" for any piece of content. An example I was given was that it's possible to track which content was most watched by brand new subscribers last month. That content would be considered more valuable because it presumably was one of the reasons why viewers subscribed. But if those viewers exit after a month or two, that lessens the value of the content. The assumption being that some percentage of the canceled subscriptions came from people who subscribed primarily for a specific show.

It depends on where people are watching. A show that is more popular in a region such as the U.S., where the ARPU (average revenue per user) is higher has a greater value than one that tracks more in regions where the ARPU is lower. Although that indicator is weighted less than some others and whether the content is attracting subscribers in a territory where subscriber retention costs are high also factors into the equation. Netflix also tracks how many people complete a TV show within a week, the percentage of people who rewatch a series (although if the number is too high, it's discounted as possible fan manipulation). And there are many more. Each of the factors is weighted differently and the weighting can apparently change as the company's strategy evolves.

Should Most Streaming Original Movies Receive A Theatrical Release?
Basically, the data at least implies that the highest value viewers - longtime subscribers, hyper-engaged users as well as new subscribers who join because of the film's availability - are more engaged with the title if it is a streaming premiere rather than a title that had a theatrical run. The tipping point seems to be that 14-day period, which is one of the reasons you see Netflix and some others pushing so hard for that accelerated theatrical window. It's not ego or some sort of streaming business mass hysteria. There is a strong belief in some circles that a longer theatrical window lessens the value of the title to the streamer even though the overall viewing numbers won't change much. Because in the world of streaming, the type of subscribers and their engagement is more important than the overall viewing numbers.

Netflix And The Moneyball Of Streaming
So Netflix applies a "Moneyball" approach when it comes to deciding where to spend money and how much. It has less to do with the success or failure of an individual title and more about the mix of decisions that leads to the desired outcome. Which in the case of Netflix is essentially to grow the subscriber base, keep churn as low as possible, and balance the needs of an incredibly diverse global audience with viewing tastes that can vary wildly from territory to territory.

If Netflix has one creative goal, it's to present what seems to be a never-ending stream of new stuff in as wide a spread of genres and budget points as possible. It overspends on original movies starring globally recognizable names because it needs to have some percentage of those titles in the catalog. But then it needs to use its own version of Moneyball to balance those big-budget projects (which help keep Netflix's churn rate well below rivals) with a mix of carefully chosen licensed titles. And if you haven't noticed, Netflix has gotten very good at licensing films that didn't do well at the box office but that also feature known stars. The films can be picked up at a bargain, although Netflix will often overpay the going market rate in order to get exclusive rights for a short period.

Netflix Isn't A Movie Studio, It's The Costco Of The Streaming Industry
Traditionally, studios focused their efforts on making sure each individual movie or TV series was a success. They set the budget, spent money advertising and marketing it and worked to maximize the revenue in each window. And at the end of the day, the financial success or failure of that project was fairly easy to determine. And except in very rare cases, the efforts put towards each individual title don't bleed over into other projects. No one is out there making sure they see every film made by Universal or Paramount. Any more than breakfast lovers are out there sampling every cereal made by General Mills. For traditional media, the projects are the product.

But a pure-play subscription-based business such as Netflix more closely resembles Costco. Each decision it makes is based on increasing revenue from subscribers, lowering new customer acquisition costs, preventing subscriber churn and building the overall brand.

TWEET OF THE DAY




ODDS AND SODS
* Reality Blurred's Andy Dehnart has an interview with Tournament Of Champions winner Antonia Lofaso.

* Proving that sports parents can suck no matter what country you live, Football Parents is a new comedy series that follows the bad behavior of a group of parents in the Netherlands. The series premieres Friday, May 16th on Netflix and here is a first look at the trailer.

* When I was younger I always enjoyed Hee Haw, which always felt more like a documentary of my life in Southern Indiana that a TV variety show. Series regular Lulu Roman died on Wednesday at the age of 78, and not only did she appear on 168 episodes of the show, she built a career as a gospel singer, eventually releasing ten albums. I was just thinking about the show the other day, after reading in an interview with the NY Times that Tracy Chapmen decided she wanted to learn to play the guitar after watching episodes of Hee Haw as a child. 

* NBC can't convince viewers to watch Suits: LA. So of course it is apparently considering a reboot of Royal Pains, with Mark Feuerstein returning as the star.

* The documentary Antidote — a stunning and immersive look at the cost of opposing Russian President Vladimir Putin, will premiere Tuesday, May 6th on the PBS series Frontline. The documentary "chronicles the lives of Christo Grozev, a Bulgarian investigative journalist whose reporting has exposed hundreds of Russian spies, assassins, and those involved in the poisoning of opposition leader Alexei Navalny; and Evgenia Kara-Murza, the wife of prominent political activist Vladimir Kara-Murza, who was poisoned twice and sentenced to 25 years in a Russian prison."

* CBS has announced Nikki Glaser will return as host of next year's Golden Globe Awards, which will air on Sunday, January 11th, 2026.

* Part one of Tyler Perry's She The People will premiere Thursday, May 22nd on Netflix. Part two will premiere Thursday, August 14th. Here is the official logline: "Lieutenant Governor candidate Antoinette Dunkerson runs a successful campaign and now must figure out how to thrive under a sexist and condescending governor while attempting to keep her family in line now that they're all in the public eye." Here is a first look at the trailer.

* The new travel competition series Expedition X is set to premiere Tuesday, May 27th on NBC. Hosted by Jeffrey Dean Morgan, "Europe is turned into a real-life gameboard as complete strangers are invited to participate in the trip of a lifetime and the ultimate geo-guessing contest. These adventurous players will traverse each country on a blacked-out “Destination X” bus with the goal of figuring out where the “X” they are each week. In each episode, the players disembark the bus to visit unique and unfamiliar tourist attractions that have been gamified into experiential challenges. They will need to rely on their knowledge of pop culture, history, geography and observational skills to win clues to their current location and earn an all-important advantage. Contestants must tap into their own personal expertise, identify hidden clues that are disguised as artifacts and discern intentional misdirects from competitors to ultimately determine their whereabouts." Here is a first look at the trailer.

WHAT'S NEW TONIGHT AND TOMORROW

THURSDAY, APRIL 24TH:
Black Snow (AMC+)
Étoile Series Premiere (Prime Video)
I, Jack Wright Series Premiere (BritBox)
Ronja, The Robber’s Daughter Season Two Premiere (Viaplay)
Vanderpump Villa Season Premiere (Hulu)
You Season Premiere (Netflix)

FRIDAY, APRIL 25TH:
Dope Thief Season One Finale (Apple TV+)
Fréwaka (Shudder)
Gold Rush: White Water Season Premiere (Discovery)
Havoc (Netflix)
Jessica Kirson: I'm the Man (Hulu)
Jewel Thief: The Heist Begins (Netflix)
Memento Mori (Prime Video)
Morimoto's Sushi Master Season Premiere (The Roku Channel)
Pokemon Horizons (Netflix)
Weak Hero (Netflix)
WondLa Season Two Premiere (Apple TV+)

SEE YOU ON FRIDAY!