Netflix has dribbled out some viewing data on Martin Scorsese’s “The Irishman”: The epically long mobster film was watched by 26.4 million Netflix households worldwide in the first seven days — to at least 70% completion, according to content chief Ted Sarandos.
In the first 28 days, Netflix expects about 40 million account holders to have watched “The Irishman” at least 70% of the way through, according to Sarandos, speaking Tuesday at the UBS Global TMT Conference in New York. The film was released Nov. 27 on Netflix after a limited theatrical run.
Sarandos said the internal Netflix numbers — which can’t be corroborated by a third party — are all the more amazing considering “all the other things you could do on those screens now… And people still choose a relationship with a film… They sit down to watch a three-and-a-half-hour movie.”
Netflix has selectively doled out metrics, and Sarandos’ touting of “The Irishman” viewing comes after Nielsen last week released estimates for U.S. viewers of the movie, pegging 17.1 million unique viewers in the first five days and an average minute audience of 13.2 million viewers over that time frame. According to Nielsen, on the Nov. 27 premiere date, roughly 18% of the total viewers of “The Irishman” watched the movie in its entirety — which, according to the research firm, was on par with the premiere day of thriller “Bird Box” (18%) and greater than “El Camino: A Breaking Bad Movie” (11%).
Netflix plans to start regularly releasing viewing numbers publicly, but “we’re trying to make sure that we’re conditioning the market to what it means,” Sarandos said at the UBS conference. The company’s stats, he said, aren’t comparable to box-office figures or Nielsen ratings points.
Sarandos claimed Scorsese was happy with the viewing numbers for his sprawling mafia pic. According to Netflix, “The Irishman” is drawing smaller crowds than Sandra Bullock’s “Bird Box,” which the company claimed was watched by 45 million members worldwide in its first week and an estimated 80 million in the initial four weeks.
Sarandos also called out Netflix’s big Golden Globe Awards nominations haul this week with 34 nods across TV and film (17 in each category), including four best-movie nominees — and “The Irishman” getting five alone. Netflix picked up more nominations than any other entertainment company.
“It’s a good mark of quality — both for the industry and for consumers, meaning you want to be at that place where all the good stuff is happening,” Sarandos said. “Creators mostly want to be in the culture… and Netflix can do that like nobody else.”
Sarandos said he’s gotten kudos for greenlighting “The Irishman,” which had a reported budget of upwards of $175 million. But, he quipped, “Betting that Martin Scorsese is going to make a great mob movie with Robert De Niro and Joe Pesci and Al Pacino doesn’t seem like a long shot.”
If the only way Netflix could monetize the investment in a film like “The Irishman” was selling theater tickets, “it’s not a great payback,” Sarandos said. “But our monetization is different… [Netflix’s movies] don’t have to do a big, opening weekend to get the payback.”
Sarandos said Netflix remains committed to releasing films in theaters and on streaming day-and-date. He claimed about 80% of ticket buyers for Netflix movies at theaters are Netflix subscribers. Long theatrical windows are “anti-consumer,” Sarandos said. The company tried to negotiate a middle ground with theater chains for a cinema-only window of “The Irishman” but couldn’t come to terms, he added.
Netflix evaluates at how well content performs by its ability to drive new member signups and reduce churn. But Sarandos admitted that it’s very hard to determine with precision what the impact of an individual title is on subscriber metrics. “There’s no hold-back test where I could say, ‘Let’s not make “The Irishman” available in some part of the world to see how that works,’ we definitely don’t want to do that.”
More broadly, Netflix is facing major new competition, including from Disney Plus and WarnerMedia’s forthcoming HBO Max — and Wall Street is uncertain how the streaming wars will shake up its business.
Shares of Netflix fell 3.1% Tuesday after Needham & Co. analyst Laura Martin issued a downgrade note predicting that the streamer will lose 4 million U.S. subscribers in 2020. “We believe that Netflix’s premium price tier of $9-$16/month is unsustainable because its perceived price/value ratio will fall over time,” Martin wrote in her note, cutting her rating on Netflix stock from “hold” to “underperform.”
At the end of the third quarter of 2019, Netflix had 60.6 million U.S. streaming customers and a total of 158.3 million worldwide.
At the UBS conference, Sarandos, as he’s said many times before, explained that Netflix expected media companies to eventually launch their own streaming services and would “not want to sell us their programming,” which is why the company embarked on acquiring original content in 2011. “I think it’s exactly what we saw coming for a long time,” he said.
Netflix’s binge-dropping strategy for episodes has “had a profound impact” on the creative process for TV shows, according to Sarandos. He said “House of Cards” was the first TV show written to be consumed in a binge-watching context, and he noted that Netflix ordered two seasons (26 episodes total) out of the gate, which was unusual at the time.
Even with the rise of streaming rivals, in general, the cost of TV and film projects has been “quite stable,” Sarandos said. A few projects “get very heated,” he acknowledged, and what Netflix is in a position to do is decide, “If that project that is expensive and heated and competitive is going to have an enormous business impact, we should buy it.”