Netflix's Co-CEO Ted Sarandos Addresses Season 2 Slump and Video Podcast Performance
In a recent earnings report, Netflix's co-CEO Ted Sarandos addressed the industry-wide phenomenon of season 2 slumps, arguing that the narrative around declining viewership for second seasons is overblown. He acknowledged that second seasons of Netflix shows tend to draw less well than debut seasons, but emphasized that the overall performance is still within expected ranges.
Sarandos cited a Bloomberg story detailing steep viewing declines for several shows in their second seasons, including 'Beef', 'The Four Seasons', and 'One Piece'. However, he refrained from disputing these findings, which were based on Netflix's own weekly top 10 lists. Instead, he offered a nuanced perspective, suggesting that the aggregate data doesn't reveal a significant change in second-season viewership compared to first seasons.
The CEO attributed the season 2 slump to Netflix's aggressive launch strategy, stating, 'It’s even moreso with us, because we launch our shows so big.' He explained that the platform's global reach and simultaneous release of shows enable them to find a large audience early on, resulting in strong initial performance. Interestingly, Sarandos noted that the season 2 fall-off has actually improved slightly this year compared to the previous year.
Regarding video podcasts, Netflix made a strategic push into this area this year, adding shows from notable figures like The Ringer, Jay Shetty, Pete Davidson, Brian Williams, and New York's Breakfast Club radio show. Sarandos highlighted that these podcasts overindex with mobile users and have increased engagement during daytime hours.
However, the company's data release provided limited insight into the specific performance of these video podcasts. All video podcasts are grouped into an 'other shows' category, which also includes any series with fewer than 50,000 views in the first half of the year. This grouping doesn't necessarily indicate poor performance, but Netflix's decision to lump them together raises questions about transparency.
The 'other shows' category accounted for 757 million viewing hours from January to June, representing only about one percent of the total viewing hours spent on all series during that period. This modest contribution to the overall viewing hours suggests that video podcasts are still a niche offering on the platform.
In conclusion, while Netflix's co-CEO acknowledges the season 2 slump, he presents a more balanced view, emphasizing the platform's overall performance and the strategic rationale behind its launch strategy. The limited data release regarding video podcasts leaves room for speculation, but it also underscores the need for more transparent reporting in the future.
