Startup a hit with streamers
TV data metric measures ‘demand expressions’ to help subscriber growth
Nielsen has umpired television’s winners and losers since the medium was new. Who won the West Coast? Who lost in late night? For decades, the entertainment industry has relied on the ratings giant to measure the value of everything from “All in the Family” to “Young Sheldon.”
But how do you prove a show’s worth in the age of streaming?
A startup, Parrot Analytics, says it has come up with a metric that can measure what a program means to a streamer like Netflix. It not only counts viewers but also calculates their enthusiasm. From there, Parrot says, it can anticipate what matters most to a streaming network: How many subscribers a show is likely to attract.
Wared Seger, the chief executive, said the company was built on the idea that a measurement system must take into account the momentous change in viewing habits. “We could each be watching different shows, on different platforms, at different times,” Seger said. “You need a new standard.”
Parrot tracks what Seger, 32, calls “demand expressions” — a twitchy metric he helped devise that, he said, takes into account a host of “signals” across the internet. It factors in Google search terms for a series or film, as well as Facebook likes, pirated downloads and Wikipedia traffic to determine its popularity.
“The Witcher,” a fantasy series that Netflix released in December, generated 57 times the average demand for all shows measured by Parrot from January to April, making it one of Netflix’s biggest hits. Netflix confirmed Parrot’s interpretation, saying “The Witcher” was its “biggest Season 1 TV series ever.”
Netflix changed the rhythms — and economics — of home viewing. With 183 million subscribers worldwide, it has no live programming, no commercials, no prime time. And unlike network TV, Netflix doesn’t make more money when viewers watch more hours of programming. Its revenue rises when people sign up.
A streaming show’s success depends less on how many people are watching than on how many subscribers it can deliver.
Parrot aims to measure the ability of a show or film to grab a viewer’s attention now that content is endlessly expanding, Seger said. That’s why the company rates shows in relation to overall demand, rather than use an absolute figure like a ratings point.
After analyzing the two longest-running streamers, Netflix and Hulu, Seger said he found a close correlation between “demand expressions” and the number of new subscribers they have taken on, he said. For Netflix, Parrot has captured subscriber growth within 3% of the actual total. For Hulu, it was within 1%.
Nielsen ratings measure the number of viewers for a show, and the broadcast networks rely on the service to set ad rates and determine the worth of their programming. In recent years, Nielsen has started using audio recognition software to measure the audiences for streaming programs. Netflix has sometimes disputed that data.
A Nielsen executive said the company’s clients “place more value in who is actually viewing streaming content,” adding that “subscriber counts paint an incomplete picture.”
Original programming tends to attract new subscribers, Seger said.
That means “The Witcher” is more valuable to a platform than “Friends,” the enduring sitcom that recently moved its streaming home to HBO Max from Netflix. New shows bring in new customers; old shows, with their potential for comfort viewing, keep subscribers from leaving, Seger said.