On Sunday, Bloomberg broke the news that Netflix
Netflix has publicly stated that at least 132 million pairs of eyeballs have seen at least two minutes of the show. But, Bloomberg's reporting cites confidential data that sheds new light on how the value of programming is assessed in the streaming age.
Netflix's internal figures show that "Squid Game" is a one-two punch of low costs and high popularity. The ten-part, roughly ten-hour series cost a total of $24 million to produce, which is actually less than what it cost to make Dave Chappelle's recent one-hour comedy special.
Netflix rarely, if ever, releases enough data to determine how sticky a program is or how many watched a series through to the end. An attorney for the streaming giant warned Bloomberg ahead of its reporting that publishing the data would be "inappropriate."
"Netflix does not discuss these metrics outside the company and takes significant steps to protect them from disclosure," they warned.
In terms of overall "stickiness," Bloomberg revealed that 89% of the 132 million viewers acknowledged by Netflix had seen at least 75 minutes of the program, amounting to a little more than one episode.
However, in terms of "follow through," Netflix's data revealed that 66%, or an astounding 88 million people, had seen the series through to the end. All in all, the series has 1.4 billion hours of watch time.
The Bloomberg report also gives new insight into the way Netflix assesses the value of its programming. As a streaming service, Netflix doesn't sell ad slots or the rights to shows; it sells subscriptions. To assess value, Netflix counts both the number of views and the value of those views in terms of their ability to retain subscribers. So for instance, the view from a new or infrequent Netflix user is considered more valuable, as it means they're engaging with content, and thus they might renew their subscription next month.
Netflix combines the number of viewers with their overall value to arrive at what it calls an "adjusted view share."
So how does "Squid Game" measure up in terms of adjusted view share? Keep in mind that a score of 9-10 is considered good. Well, "Squid Game" scored an astounding 355 in terms of adjusted view share, which is likely justifies Netflix's internal near $900 million valuation of the IP.
The sudden success of "Squid Game," has also fueled a rally in Netflix shares, which had been trailing previously as earlier in the year the company had reported the fewest number of new subscribers since 2013. However, since the show's release, shares of Netflix have climbed 7.1%, generating $19 billion in value for the company, or twenty times greater than the streamer's own estimate.
"We think Netflix has found a sound and profitable strategy with its content internationalization efforts, with 'Squid Game' a perfect example," Michael Pachter, an analyst with Wedbush Securities and notable Netflix bear, wrote in an Oct. 14 note.
"This and its 'Seinfeld' launch in Q4 should provide a solid cushion," he added.
