In an appearance Tuesday at the UBS Global TMT Conference in New York, Netflix content chief Ted Sarandos revealed fresh viewership numbers for The Irishman and tackled topics like new competition in streaming.
The Martin Scorsese mob epic was watched by 26.4 million subscriber accounts during its first seven days on the streaming platform, he announced after pulling a note card out of the breast pocket of his blazer. The precise number, which Sarandos read digit by digit to the audience, was 26,404,081. That represents the total number of accounts making it at least 70% of the way through the film. That completion rate is the company’s standard benchmark when it reports select viewership stats. As of its last quarterly report in September, Netflix had about 158 million subscribers worldwide.
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Extrapolating from the streaming figures to identify the equivalent number of ticket-buyers in traditional movie box office terms is not an equation Netflix tries to solve, Sarandos noted. The company’s reliance on subscription revenue means it looks only at the ability of film and TV titles to generate new subscriptions or keep subscribers on board. The Irishman has been in limited theatrical release since November 1, but the company has not released any theatrical revenue figures.
In its first 28 days, Sarandos said, the film will be viewed by about 40 million household accounts.
“The thing that’s amazing about that is, think of everything those people could be doing on those screens, and they chose a film,” Sarandos said, listing social media, video games and other pursuits.
Nielsen last Friday circulated numbers for The Irishman‘s first five days of streaming, saying it reached about 13.2 million subscribers in the U.S. It said 18% of viewers watched the entire 210-minute film on its first day of availability, November 27.
The Irishman‘s Golden Globe accolades also earned a shoutout during the session, along with Netflix’s overall haul of 34 nominations, evenly split between film and TV. Sarandos called the tally a “good mark of quality both for the industry and for consumers.”
Feature film, which has become a huge focus for the company, has the potential to be more of a draw for viewers than series TV, the executive observed. “Consumers understand the value proposition of new movie watching, compared with TV series,” he said. “In New York, that’s a $100 night out.”
He added, “Some of the alternatives to watching pay-television would be watching so-called ‘free television,’ so it’s a little less clear.”
Sarandos hit on a number of other hot topics during the conversation moderated by UBS analyst Eric Sheridan, including the cost of programming, the influx of new competitors in streaming and relations with talent.
Sheridan asked Sarandos how the arrival of new streaming rivals like Disney+, HBO Max, Peacock and Apple TV+ is affecting Netflix’s content approach. “I find the market to be pretty stable,” he said. “Those competitors were already making and selling content before” they decided to go direct to consumers.
Netflix stock slipped more than 3% on Tuesday and is down 6% in 2019 to date as some analysts have predicted that new competition will loosen the company’s longstanding grip on the domestic streaming market. Laura Martin at Needham & Co. issued a downgrade Tuesday, forecasting Netflix would lose 4 million subscribers in 2020 unless it offers a lower-cost tier to match new services that cost a fraction of Netflix’s prevailing $13 monthly rate.
Release windows, another pot that Netflix is stirring, also came up during the talk. Sarandos derided Hollywood’s traditional two-and-a-half-month window between theatrical releases and ancillary platforms as “anti-consumer.” The refusal of Netflix to honor that window has cost the company the chance to play alongside major studio fare in AMC, Regal and Cinemark megaplexes, he acknowledged.
“When you look at the biggest markets and the biggest theaters, those are controlled by big chains,” Sarandos said. “When we book our films into specialty theaters, they put us in smaller rooms.”
The ideal release method would be day-and-date in theaters and streaming, Sarandos said. “When people decide to go out [to a theater], they’re going out,” he said. Company data indicate that about 80% of ticket-buyers at theatrical showings of Netflix titles are also Netflix subscribers, meaning they are choosing an out-of-home, big-screen experience. The streaming giant, despite tension with exhibitors and the Cannes Film Festival, has invested in theaters, reaching deals to run LA’s Egyptian Theatre and New York’s Paris. Sarandos also referenced multiple sellouts of The Irishman at Broadway’s Belasco Theatre during a one-show-per-night engagement this fall.
Asked about the notion of high-quality films being viewed on mobile phone screens — a scenario decried by Irishman director Martin Scorsese — Sarandos could only shrug.
“The way people consume is very personal,” he said. “The number of great films that my son, who’s in film school, watches on his phone is mind-boggling to me but very natural for him.” (David Lean epic Lawrence of Arabia is among them, the exec added.)
“Sometimes, it’s just that people don’t have anywhere to watch at home,” he said.
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