Julia Alexander

the advertising that supported it through the broadcast and even throughout the cable system with the ads they could bring in on top of the affiliate fees they were generating meant that you could take bet on longer shows because you had to fill the shelf space the ads were going to be there you needed to have shows in order to do it and as they built up those audiences they could kind of go for a longer period of time the efficiency metric which is a term that every content planning and analysis team will use within streaming services

The efficiency metric was much, much higher for those types of broadcast shows during the heyday of broadcast.

Yes, precisely.

And so if you look at Netflix, up until very recently, they were staunchly against ads.

And so everything that they did, their whole efficiency metric was, are people coming in for this type of show?

And are they not canceling because of the show?

Something that we call acquisition and retention.

Right.

And so eventually a show in its second or third season is just going to have less overall acquisition pull.

And by that point, if it's not a phenomenal show or it's only got four or five episodes or six episodes, Netflix loves the limited series in part because of this, you're going to just stop making those seasons.

You're going to try a new show and go, well, maybe we can bring in a customer or retain a customer because of this instead.

So now that the advertising economics are starting to come much more into play for premium services, especially Netflix, I think you will see them try to get to their own ER.

They tried with a show called A Pulse, and I think they had a show called The Residence, which was very kind of procedurally.

And these didn't really work out for Netflix.

So I think they do want to build it.

But again, they've just

they feel like they've run out of time in order to do it if they're going to compete in a heavily consolidated market and if they're going to compete specifically for sports rights which is also key to this conversation and they're going to compete with companies like amazon and google on securing the those sports rights then they need to be able to increase their engagement increase the amount of shows that they can have ads on kind of overnight and this was just the best opportunity

If the fact that somebody can put Michael Keaton's Batman on in the background, even if they're playing Candy Crush or watching Instagram reels, the fact that they still are opening Netflix to do so and not opening HBO Max or not going to something like Tubi, which may also have it, like that's the other thing is a lot of these titles are not exclusive.

So really the option of where to get them is becoming more of a problem for a company like Netflix and this kind of highly contentious environment for attention.

It is still a win.