Welcome to Strictly Business, Variety's weekly podcast featuring conversations with industry leaders about the business of media and entertainment. I'm Cynthia Lyttleton, co editor in chief of Variety Today. My guests are Mark Hobick and Carolyn Finger of Illuminate. Illuminate is a data and insights company that focuses on audience measurement for the entertainment industry. It's a corporate sibling of Variety,
under the umbrella of our parent company PMC. Of Late, Illuminate has gone hard on the business of measuring streaming TV viewership. That's a lot harder than it sounds. Illuminate executives crunch numbers all day, every day, but they also stop every so often to produce long term reports to give real insights into what's going on and how things are changing in this very dynamic marketplace. The twenty twenty four year end Film and TV Report was issued late
last month. It's linked in the show notes to this episode and the Variety dot com story for this episode, and as advertised, it is packed with insights. Mark is executive vice president and head of Film and TV for Illuminate. Carolyn is Senior VP of Consumer Success and Products for Illuminate. The three of us have known one another for a long time through many different jobs. I think that comes
through in this conversation. There is a lot of laughs and a lot of shorthand from people who know and respect each other a great deal. That conversation is coming right up after this break, and we're back with a conversation about the year in streaming TV with Illuminates. Markobick and Carolyn Finger. Thank you so much for joining me.
This is fun because I've known you both for so long and I know you both to be absolute aces at what you do, so, dear listeners, you could not get a better overview of what the streaming landscape has wrought in twenty twenty four than these two. So thank you for coming all the way up from the seventh FLOORA.
Thank you for having us. Yes, that was a full disclosure that had to happen at each.
Other, Yes, one hundred percent. No, I've learned a lot from both of you over the years. I would like to start just by throwing it out to both of you. What you know. You crunch the numbers all day long.
I know hourly you're looking at data, and you're refining and really getting great insights and great information as you took that step back and looked at the kind of the long the long term of the year, As you took that step back and looked at the landscape of twenty twenty four, what top line what stood out to you as surprising? What didn't you know by doing this report from your day to day, hour by hour efforts.
For me, I think one of my kind of top level takeaways is really when we look at the content output, and we're looking at it on the TV side, streaming and linear together, when we look at that, while we saw a lessening of the decline year over year, we still saw a seven percent drop and that really was effect from the reverberations we're feeling from the strikes.
And you're talking about total volume, total content.
Of series premiers. Yeah, thank you. And you know, in twenty twenty three we saw a seventeen percent drop, So a seven percent drop is an improvement in that we're declining less quickly in terms of the number of series premieers we're seeing, but very significant. One of the really fascinating parts to the report is that while we see a seven percent drop in the overall number of series released.
When we look at episode orders, the episode orders declined significantly, so well we see this moderation of decline on the series side. The episodes, we saw almost a twenty percent drop year over year from prior year, and that trend has continued now two years in a row. Was seventeen percent in twenty twenty three and then almost twenty percent
in twenty twenty four. And that is the media companies are really being more stingy with when they're doing series or ordering series, just taking fewer episodes, and of course that impacts our entire entertainment ecosystem for writers, producers, directors, actors who really rely on those episodic orders.
I would say, yes, I agree, and also I guess in the biggest picture to me, all of the sign posts are looking towards kind of risk mitigation for the studios. And what I mean by that is, you know, we have these terrible strikes, so we have this huge reduction in production, and.
That was the reasons for the seventeen for a large part of the reason for seventeen percent in twenty twenty three.
Is that accurate, Yes, But then the strikes are over, you know, happiness reigns again in the land. But no, not really because then we're having these, uh, you know, this contraction on corporate level where there there's kind of fear about I think number one, there's a fear around TikTok and what are they you know, can they invest in all these shows? Who's the audience for shows? So
it's all kind of spelled out. They're trying to find different ways to produce fewer things, have more things that are part of a franchise or existing on peace, safer things, safer things, you know, the limited series which we can talk about. You know, all of these things are kind of spelling a net loss I think.
In the entertainment ecosystem. Yeah, and I like your answer kind of change mine, you know, but I think, you know, risk mitigation, and through this study we really see what's working and what's not working in terms of the risk of mitigation strategies. But yeah, I agree with what you said one hundred percent.
We did see in the report that the volume of limited series has has definitely come down because people are I think, because people are focused on those renewable resources, and also people are spending money on sports as opposed to spending you know, ten million dollars an episode on a six episode series like gee, who could have seen that that wasn't exactly sustainable, But so it seems like a good idea at the time, exactly.
But is there is there any discernible, any any quantification of like fewer series overall and an emphasis on shows that they hope to renew, you know, a limited series is limited until until it works and then yeah, right, But is there any quantifiable that that you know, focusing on fewer shows has better results because you know, you can market more heavily to one show really really promoted to be you know, really promoted to an audience as like this isn't just a one off, but you know
you're going to want to watch Noah Wiley or you know other people in these settings.
You know, I don't think we are evidence has seen that.
The thing I would say is that we do know that P and A really matters, you know, promotion advertising when we look at film, and this is a theme I think throughout content that we're seeing is that you know, to what you're getting at that if we have fewer titles, are we able to kind of promote those more and really get through the clutter and audiences can find that the recommendation just govery is a huge issue for the streamers, it's a huge issue for everybody because we have so
many choices of content.
Because of the emphasis on completion rates in streaming. It's it's just it's different. Things don't have the same kind of breathing room that they once had with linear where they were dropping one episode weak and you could kind
of see week to week. If you are in a scenario where like Netflix, where everything is dropped all at once, and maybe there is that initial m and a push, but if it doesn't get that audience initially, then it's much harder, I think, to get Yeah, so you know it gives in, it takes.
That's a that's an interesting question. So if not naming names or anything, but a six episode limited series drops and if people do you see that, like if people don't go to it, you know fairly soon to episode one or two, like they're never going to go check out They're certainly never going to go check out the rest of it. But like it is it a time sensitive thing, is what I'm saying. Like once at premieres, they if you don't go to it, it's really hard to get people to it a month or two later.
We see in streaming definitely the sampling and that those first twelve weeks is really critical. And the other thing that we know from the streamers and our discussions with our partners is that that ninety percent completion rate is very very important in order to get a second or third season, order to get those multiple season orders. So you know, we can see that in the data and in the importance of it.
Yeah, and that's also important, you know, speaking of strikes, you know, with the arrangements to get more residuals for streaming, that time frame is kind of baked into that as well as you know, the number of subscribers who are watching.
Does it follow? Do you think that as the streamer is starting to realize that that, you know, maybe they're not going to do a twenty two episode procedural, but like Max with the Pit I believe is like fifteen or sixteen episodes. Do you think that when we're talking next year about about the twenty twenty five repart you think episode council will start to inch up?
I hope.
So we did get I mean we you know, Channing.
Dungey actually made this announcement actually at Variety and in Tech. I remember when she talked about the John Wells series that they're bringing back, and they were very happy to announce they were looking at twenty two to twenty three episode orders. So I think there is that awareness of this is an underserved type of content that we're just
not producing at the same volume that we are. So, you know, our latest sort of feedback we've gotten from the streamers when we've sat down with them has been their focus is really looking at content with a global footprint, not US centric content, and time will tell whether that
translates into more episodes or not. But I don't know if they're seeing that quite yet at the streamers that they need to be producing more episodes, because as the data is showing us, they've in fact and cutting back now for two consecutive years in terms of episode of orders.
And then let's talk a little bit more about comedy, because I did notice it very very noticeable in the report, all those nice color codings, very noticeable that CBS is basically, I mean CBS is basically the only the really only big brand broadcast or streaming that has a real big comedy business. Netflix of course has a lot of comedies, but in terms of elementary yeah, oh for sure, it's.
Absolutely, oh absolutely, but I mean really, but just in terms of in terms of volume, and you know, the conventional wisdom for decades has been, you know, you can't just have one comedy on an island. You've got to have a you've got to have an environment. And CBS still seems to be kind of the last that still has that has that environment, although you know each network does have a few, but CBS seems to be Yeah.
Yeah, I think comedy is really seen as very specific culturally, and in a world where we're looking at global distribution for so many of these titles, it's just a harder sell.
And interesting like Netflix has had a it's been a buzzy hit. I haven't actually looked at the numbers, but buzzy hit with National Treasure Ted Danson A Man on the Inside, and that's a remake of a I can't it's a I believe from Eastern Europe there was a form of French. I think you're a French series or remake and I wonder if that you know that, especially as you know kind of it his play in the
Awards game. I wonder if that could be a model, you know, see if streamers will see, like maybe take the elements, the bones of comedies that are working in other places and try to adapt them for us and vice versa. I mean, that's not a new phenomenon, but I wonder if there will be you'll see more of that, because my goodness, we do need laughs.
You know.
What I think may have helped fill in the gap with comedy is maybe unscripted, even though we've also seen unscripted yeah, declients, but yeah, I think things like Love Is Blind or The Real Housewives, you know, I think people laugh at yeah, a lot of those things as well.
Sometimes you laugh with, but sometimes.
You laugh at for sure.
And unscripted, I think is a really interesting thing for us to talk about because we've seen where this you know, during the strikes, unscripted was one of those things that was protected. Yeah, but when we look at the actual data, we had declines in twenty twenty three and twenty twenty four for unscripted year over year, we're looking at eight percent drop and unscripted across broadcast, cable and streaming, And
I think what's going on there. My personal take is that we have It's not that we've exhausted ideas, but unscripted reality program in particular is so concept driven, and you have got to have that innovation of concepts. And if you look at the top show the unscripted shows, you've got Love is Blind, Love Island, a lot of shows around Connection is So Angry. Oh stopped me in my tracks. If you wanted the talkings to you, I'm.
Sorry, don't go anywhere.
We'll be right back with more insights from luminates Markobick and Carolyn Finger right after this break, and we're back with the rest of our conversation about the year that was in twenty twenty four with illuminates Markobick and Carolyn Finger.
It's hard to understand why unscripted is declined, but one of the things, you know, speaking what you're saying Mark about it's so format driven, all of those kinds of just little snippets of schadenfreude like you can get on short form content. Oh true, you know. I think maybe some specific influence have kind of filled in.
I think social media is part of that fix of seeing real people misbehaving or what have you, and that is something that you can get on TikTok and for now and Instagram in various places.
Right, yeah, no, it's it's really interesting another you know, in the continuing with the down trend here animation also, I saw you know, big decline, and you would have thought that that would have been.
A little more strike resilient from that impact.
But well, for the I think sag aren't the many of those actors in stories, so I'm assuming that's why they weren't able to do that. But also it does seem as though from a production standpoint, there's so much competition for access to animation studios and the production timeline is so much longer that that could maybe have played a role as well.
And then say, time we have seen animated features, they've had some real home runs. So maybe it's just kind of a world. You know, we've all known that, you know, Fox for whatever reason kind of has that magic magic wand on the adult animation, and virtually everybody else that has tried it, virtually everybody else has really has really struggled.
So it really does seem like it's a you know, a feature, a feature animation for family audiences and and you know, it just doesn't translate to two series anymore. I wanted one thing that really also in the report stands out. You do beautiful job of kind of laying it out Star Wars fatigue people. I mean, it's very it's very clear, and that's you know, that's got to be a concern for Disney because that lucasfilm that has
been a real, real pillar of their strategy there. Now as soon as we say that, they could have a show that comes out, you know, comes out next month and all of a sudden, we're not talking about it. But both on the feature side, that's been very well documented and on. But the viewership declining for season twos and things is really significant.
I think the franchise fatigue is really interesting. That's one of my favorite parts of the report as well. You know, when we look at some of the biggest franchises in streaming, franchises are incredibly important to the streamers in particular because this issue of really having a universe that people can access relatively quickly. But if we look at Lord of the Rings, the Rings of Power season one, which was released in twenty twenty two, the twenty twenty four second
season did not perform nearly as well. Similarly, for Marvel, we know that Agatha all Along, which I personally really enjoyed, and Echo performed under twenty twenty three releases, Low Key Season two and Secret Invasion.
And it really.
Speaks to the importance of franchise management for these media companies, and if they are spread too thin, if they're doing too many things that are not really focused on these franchises, you can get to a place where you're just not going to get the same result. And it's unfortunate something like The Rings of Power again really enjoyed it. Fifty eight million dollars per episode. They've spent almost a billion dollars off the two seasons that have been released thus far.
Beautifully shot.
I know you have some thoughts about.
For me, it was you know, I'm a nerd. I you know, I love my Hobbits. It just somehow it was too densely plotted for me or something, which is that's saying a lot after reading the two towels.
Yes, one of the starkest pages in their report is the share of original viewing chart. I mean, it makes it Crystal Claire. Not that there was much doubt, but you know, now we have the pie charts. If there's a pipe chart, it's official. There's Netflix and there's everyone else.
Yeah.
For original streaming content to share, Netflix to share is sixty three point five percent. Literally the rest of the competition combined doesn't even come out for originals for originals, which you know, which is such a huge part of this, such a huge part of the marketplace.
I think Netflix defines an audience differently than all of their competitors, except for maybe Prime, but you know, Prime is there to feed the Amazon machine and does that pretty effectively. You know, Netflix is looking I don't think they're looking at like an audience. I think they're looking at kind of the world, and so they don't feel as though they have to have something that fits into a particular brand. I mean that's just my you know,
kind of armchair thing. I feel like Apple TV they have a more boutique kind of a pro coach to TV and a more boutique audience. True, but bless them for it, you know, I would say, like, for me, the big surprise in some ways is Max. I don't want to pick on anybody, but I'm you know, I remember that a certain CEO was brought in from the cable world, and there had been a lot of success with a lot of unscripted franchises, and the brands have been a bit diluted, and HBO has always been speaking
of boutiques. So there just isn't enough there to propel its audience share. But I think to me, in some ways they're the most vulnerable of all of these.
My my takeaway is that when we look at the pie, what's really interesting. I think Netflix and Prime sort of we expect to see those in one and two, but that we see from an original content perspective, Paramount Plus is in third position, and Apple TV is in fourth position,
followed by Who and then Disney Plus. It's really interesting because you think of Disney Plus and all of the content there, but just from an original title perspective, they just haven't released that many titles in twenty twenty four.
Yeah, and Prime is you know, Prime is second at eight point five percent, Like I just that's sixty three that's sixty three point five percent.
Is very overwhelming.
It is interesting, and you know, following along that in terms of other surprises, it was a surprise to me and I watched this stuff and cover this stuff every day. It was a surprise to.
Me that Fool Me Once was Netflix's top title based on the Harlan Coben book. And I know he has a massive and I believe, you know, maybe not worldwide, but it has international fans, and I got to believe that that fandom, yeah, helped helped drive and he's a very well established author with a real a really specific brand of storytelling. But you would not I would not have cited that as the number one did that? But I know that you've crunched the numbers on a week
you know, daily and weekly basis. But did that in that year end sense? Did that really? Did that stand out to you as kind of a surprise that that would at year end that was the big show. Now, as I understand, Squid Game may have knocked it off its perch now that now that it's been out for.
Yeah, for tea English language also.
So yeah, we're only doing ro only measuring English language in this particular study. So you know, Fool Me Once they also had the benefit of premier in January first, twenty twenty four, it had the whole year. And what's interesting is when we look at that top ten list, yes, seven of those titles are Netflix. But when we look at the other three with them that top ten land Man on Paramount Pair plus Taylor Sheridan, Yes, you love this.
I can't believe it's out in the world.
But yeah, but even among the Taylor Sheridan shows, it wasn't among the most talked about, which is interesting because the interest that that chart, there's a gap between like the cool factor and buzz factor. And of course we are in a bubble, we are in the creative community bus.
But I didn't hear so many people talking about it, but obviously America and Canada. Yeah, there's kind of.
Like the People's Choice Awards. You know, it doesn't line up usually with the oscars, but it does tell you about what the broader audience is responding to.
And keep in mind that Landman didn't not all episodes had been released by the time we got to the end of the year, So we're doing that without all episodes being available, which is a tremendous accomplishment.
Yeah, he is, Taylor sharedon got to give to him.
He is tapping into some fortant. I mean, he just I mean, you know, John Ham like has great cast and has enough like there's a great balance of absurdity and yet truth. Somehow that's what's.
Any Tulsa King is number five in the list.
So with that's off, Yeah, let's close out our discussion here with the subject of a topic that is kind of appropriate to the world that we're living in right now.
Horror. Yes, but there's a lot of interesting data in there about how it's a clear box office driver and it is also, you know, very efficient box office because budgets, you know, versus like a blockbuster movie or even a big animated feature like they can you know, they can really do horror on a beer budget and get champagne box office.
Yeah, yeah, absolutely, Well, horror is one of those genres that has a built in fan base that is very committed to showing up and seeing those titles in theaters, and they're also reliably profitable, and that's a heady combination. Now, when we look at the budget for a film, we're typically looking for box office to be two point five times the budget for it to really be considered a success, and then anything above that can lead to a runaway hit.
When we look at the top ten highest grossing horror films from twenty twenty four in their budgets. What's interesting is that we see things like the Substance. The production budget on that was seventeen million dollars and a bit more than that, the box office was over seventy seven million, So just a tremendous success. And we see that again and again. Alien Romulus also highly profitable, A quiet Place
Day One very profitable. So it's just the gift that keeps on giving these two and the Substance.
Nobody on the planet, on the surface, even with Demimore, nobody on the planet would have said, yep, that's going to get five Oscar nominations. That also was really was really telling. But great work is great work is rewarded. Actually, I really want to close with a question that tacks
back to the way things work. I'm still I still have a harder time wrapping my head around millions or billions of minutes viewed versus old fashioned ratings and share what do you think in terms of from your experience as researchers, the focus on minutes versus ratings, which were you know, translated by demographic and everything they were.
I think it was just what I grew up with. But what is do you think is tracking the minutes viewed? Is that a better measure? Is that a more accurate yardstick or is it just a different form of you know, it's just a different form of ratings.
I am very passionate about this, you know. So I think minutes watched is a really it's a really inaccurate way of measuring success because it rewards longer form content. So comedies, which traditionally are shorter, are always at a disadvantage in that world. If we're just talking about television the real way, and this is the streamer are coalescing around this as well. A more accurate measurement of success is views, and that is simply taking the total minutes
watch and dividing that by the runtime. And that's something that we actually provide through our SPM product, But our rankings are still measured based off of minutes watch. So yeah, I hear you.
Yeah, It's kind of like, you know, the news used to be packaged in a very specific way, and you only kind of saw the news that was presented to you, and now it's like we see, you know, the ticker tape of everything in real time. And I think that's kind of what minutes is where you can see everyone who's tuned in for one minute and you know, decided to click on something else.
What's the holy grail that you as researchers that you can't get your hands on, but you'd love to In terms of data, data about shows, data about viewing, viewership, engagement.
It's first party data, it's party data. It's what we all want.
Listen up, streamers, Yeah.
Listen up. And you know I will say, you know, there is a light at the end of.
The tunnel because I'm not at liberty to kind of talk about those companies, but we are in active talks with certain streamers to actually share first party data. And that is if you had asked me two years ago when we were first building SBM, if this were a possibility, I would have told you they're never going to share. But I do believe that a day in the future we will have first party data and that will change everything. Will really have transparency there, and that'll be good.
For the industry. And I would say, on top of that, accurate demographic data based on kind of all devices, because we don't really have a great line of sight on who's watching everything and how they're watching it, and that's the secret to getting the young.
I would like to throw in there that I'm always I've always enjoyed looking at regional data. You know, what is the.
Southwest watching versus what is the Northwest? And that that just seems to be more and more elusive, elusive, or it just won't you know, they won't, they won't divulge it, and that.
It is now like Southeast Asia.
Right exactly, Let's narrow it down a little bit.
But yeah, well, this has been a fun, fun conversation with two people who know their stuff right and left and upside down and backwards. Thank you so much. I really appreciate it. I really appreciate all your work and the you know, ability to bring some sense of what's you know, what's actually going on out there. We don't have to just take their word for it. Thank you so much for legend.
Thank you, thanks for listening. Be sure to leave us a review at Apple Podcasts or Amazon Music. We love to hear from listeners. Please go to Variety dot com and sign up for the free weekly Strictly Business newsletter, and don't forget to tune in next week for another episode of Strictly Business.