2019 has undoubtedly been one of Netflix's most challenging years to date.
It's the first time in eight years the streaming giant has lost US subscribers – the company had predicted that it would gain 300,000 new customers in the second quarter of 2019, but it lost around 130,000.
And despite attracting 2.7 million more subscribers globally, those weren't the 5 million promised to investors.
There's also the mounting pressure from a raft of new streaming services – Disney+, HBO Max and Apple TV+, among others – part of which will involve losing fan-favourites, such as Friends and The Office, as they are clawed back by their distributors.
Netflix's public image has also taken a battering this year following a raft of big cancellations.
Santa Clarita Diet, Designated Survivor, The OA and Tuca & Bertie are all no more after they were cut from the roster, and BoJack Horseman is about to enter its sixth and final season on Friday, October 25.
What to Read Next
Aaron Paul, who voices Todd Chavez in the adult animation, made it clear on Twitter that the series would have continued had Netflix backed it.
"Goodbye Bojack," he wrote. "6th and final season is here. My God it's been an emotional ride.
"We had a wonderful time making Bojack. Couldn't be more proud. Fell in love with these characters just like everyone else did but sadly Netflix thought it was time to close the curtains and so here we are."
Ratings play a huge role in deciding whether a show stays or goes, but that's not the only metric Netflix looks at.
Chatting to Business Insider (BI), the corporation's chief product officer Neil Hunt explained that unlike traditional broadcasters, who are purely focused on ratings given the role that advertising plays, Netflix's core focus is whether a TV series or film will drive subscriber growth. Then it looks at whether that content is able to keep those people on its books.
That is based on something called "valued hours". It's not just about the length of time a viewer spends on Netflix as a whole, watching a raft of different shows. The data looks at exactly how that time is spent. BI explains that if a person is paying for Netflix every month but only committing to one or two shows, their value is immensely high.
But there is still some confusion among both subscribers and creatives about what constitutes Netflix's unique ratings system specifically.
While we'll never know the full picture – like any big corporation, Netflix keeps its cards close to its chest – some new information has surfaced.
What has attracted the most interest is how Netflix measures its viewing data, giving both subscribers and creatives a "brief" but better understanding of why one show might be cancelled while another lives on.
Ratings are divided into three categories:
- "Starters" – households that watch two minutes of a film or one episode.
- "Completers" – households that watch 90% of a film or season of a series.
And between the two, there's the metric that Netflix shares with the public (its top ten most-watched shows) and the people making their content – "watchers" – which are households that watch 70% of a film or single episode of a series.
The company looks at how shows perform in both the first seven days, which should "help creators understand how their original titles perform once they are released", and across the full 28-day window in a bid to understand "how members engage with their title from start to finish".
Cindy Holland, vice president of content acquisition, previously revealed at NTV in Jerusalem (via Broadcast) that Netflix puts "projection models" in place prior to a show's release. That data helps them "assess the size of the audience" that they think will tune in.
If that target isn't hit, the company has to "consider the point of continuing to invest in something that isn't performing".
As fans of The OA have demonstrated, Netflix cancellations equal noise, and lots of it – the drama was shown the door after after two seasons.
But the picture is not the same across the board. Stranger Things is returning for its fourth season, and executive producer Shawn Levy told Entertainment Weekly that "there's very much the possibility of a fifth".
The company recently revealed that a whopping 64 million households watched the show over its first four weeks, which we know equates to 70% or more of the series.
Other shows in the top ten were The Umbrella Academy (45 million), La Casa de Papel aka Money Heist (44 million), You (40 million) and Sex Education (40).
All of the above have been renewed for future seasons, which indicates that they drive subscriber growth, retain those subscribers, and more viewers than not are watching enough of the series to warrant renewal.
While Netflix didn't reveal why it chose not to renew The OA and other seemingly big titles, on the basis of this new data, those targets were simply not met.
Digital Spy is launching a newsletter – sign up to get it sent straight to your inbox.
Want up-to-the-minute entertainment news and features? Just hit 'Like' on our Digital Spy Facebook page and 'Follow' on our @digitalspy Instagram and Twitter accounts.
