{"id":3620,"date":"2023-02-07T05:00:05","date_gmt":"2023-02-06T19:00:05","guid":{"rendered":"https:\/\/2dpoint.net\/?p=3620"},"modified":"2023-02-07T06:49:05","modified_gmt":"2023-02-06T20:49:05","slug":"how-does-netflix-calculate-dollar-value-for-its-shows-movies","status":"publish","type":"post","link":"https:\/\/2dpoint.net\/how-does-netflix-calculate-dollar-value-for-its-shows-movies\/","title":{"rendered":"How does Netflix calculate $dollar value for its shows\/movies?"},"content":{"rendered":"Reading Time: <\/span> < 1<\/span> minutes<\/span><\/span>
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  1. \u00a0In 2021, Netflix shared that the famous series\u00a0<\/span>Squid Game<\/span><\/em>\u00a0generated an impact value of $891 million for the company.<\/span><\/li>\n
  2. And since Netflix doesn\u2019t generate sales based on specific titles, how the company arrived at this figure is a bit of a mystery for everyone.<\/span><\/li>\n
  3. In the case of a movie studio, revenue\/profit calculation from a title is pretty straightforward\u2014Box-office collections + movie rights sold to a TV channel.<\/span><\/li>\n
  4. Even for a TV channel, the revenue\/profit from a program can be easily calculated by determining the advertising revenue.<\/span><\/li>\n
  5. On the other hand, Netflix uses some \u201cprivate\u201d metrics to determine the value derived from individual programs.<\/span><\/li>\n
  6. An attorney representing Netflix once said: \u201cNetflix does not discuss these metrics outside the company and takes significant steps to protect them from disclosure.\u201d<\/span><\/li>\n
  7. While the figure of $891 million is impossible to determine for anyone outside Netflix, some variables likely contribute to this number.<\/span><\/li>\n
  8. To begin with, Netflix classifies its consumers into three categories: Starters, Watchers, and Completers.<\/span><\/li>\n
  9. Starters are \u201chouseholds that watch two minutes of a film or one episode\u201d in a series in the first 35 days of release (data is checked for seven days and then another 28 days).<\/span><\/li>\n
  10. Completers are \u201chouseholds that watch 90 per cent of a film or season of a series.\u201d<\/span><\/li>\n
  11. Households that watch 70 per cent of a movie or one episode in a series are considered \u201cwatchers.\u201d<\/span><\/li>\n
  12. And the \u201cwatchers\u201d data is what Netflix refers to when it says \u201c142 Million Households Watched \u2018Squid Game\u2019\u201d.<\/span><\/li>\n
  13. And when it comes to renewing a contract for a movie\/series with the producers, Netflix uses numbers from this classification to make a decision.<\/span><\/li>\n
  14. The show is considered worth renewing if the \u201ccost to watcher\/completer ratio\u201d is healthy.<\/span><\/li>\n
  15. Higher watcher\/completer numbers mean that series\/movies also have the potential to get new subscriptions or to retain subscribers at risk of cancelling their memberships.<\/span><\/li>\n<\/ol>\n
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