The company announced Tuesday that Netflix would change the metrics it uses for ranking the most watched titles on its streaming service.
The company used to rank titles based upon the time taken to watch a movie or show on its service. In a letter to shareholders, the company stated that it has recently released rankings based upon the number of hours a movie or TV series has been viewed.
Although there are differences in [...] rankings, we believe that engagement measured in hours viewed is a better indicator of overall success and member satisfaction. It also measures TV viewing by outside services and credits rewatching.
Netflix claims that hours viewed are a better indicator of overall success for our titles than the total number of viewers.
This change will not only move one of its most important public ranking systems from viewers and hours viewed, but it should also make it easier for the public to understand its rankings. Although the company tracks things such as titles completed internally, the 2-minute metric was confusing. It could misrepresent the true success or a series/film (for instance, if an account holder only watched the first two minutes and then quit).
The company also stated that they will begin to release title metrics regularly outside of their earnings report to better assist industry members. Industry figures claim that streaming services are not transparent about success metrics, which can complicate everything, from contract negotiations to cast and crew pay to contract negotiations.
Last month, Ted Sarandos, chief content officer and co-CEO of Netflix, shared ranking titles on Netflix based on the 2 minute metric and hours watched metrics. A side-by-side comparison revealed that although there was some overlap, the titles were ranked significantly differently based upon the different metrics.
It is clear that the Korean drama Squid Game, according to many metrics, has been a huge success on the platform. Bloomberg last week reported that 89% of those who watched the show for at least 75 minutes (more then one episode) and 66% of viewers, which is 87 million, finished the series within the first 23 days.
The company revealed last week that the series was its largest ever launch. The company announced in a Tuesday shareholder letter that the show had been viewed by 142 million households worldwide, based upon its 2-minute metric.