In one big press release a couple of weeks before announcing fourth-quarter results, which are due later today, Netflix (NASDAQ:NFLX) released a lot of information about its content plans. One Netflix original series was renewed for a second season, four shows got solid premiere dates, and we got hints about the first-season releases for another three series.
It's not often you get that much information in a single Netflix press release. Combined, these choices say a lot about Netflix's content strategy in general -- and about the company's data-driven investments in particular.
The big kahuna was, of course, the renewal of semi-historical epic Marco Polo for a second season.
"Marco Polo is everything that's wrong with Game of Thrones," said LA Weekly. The Verge called Netflix's series a "$90 million rip-off of Game of Thrones." Overall, critics hated the show: A terrible 27% of Marco Polo 's professional reviews gave it a positive review, resulting in a "rotten" overall rating on Rotten Tomatoes . A look at social media activity around the premiere showed light interest in the new show.
And yet, Netflix wanted more. Marco Polo is coming back for a second season, featuring the same sterling core cast and production crew as the first season. The production budget is likely comparable to the premiere season's rumored $90 million.
Doesn't that seem like a crazy commitment to a show so universally panned?
Here's the first bit of crucial insight you can glean from this announcement: Netflix doesn't give two hoots about what the critics say, as long as its own subscribers like what's going on.
Nobody outside Netflix knows how many viewers Marco Polo has, since the company is notoriously tight-lipped about such data points. But take a second look at the Rotten Tomatoes breakdown:
Yes, the press absolutely hates this show. But about 1,200 regular viewers weighing in on its quality disagree, giving Marco Polo a mighty fresh 93% approval rating.
These numbers compare favorably with critical favorites such as Gotham, Galavant, or Marvel's Agent Carter. All of these shows scored much higher than Marco Polo among professional reviewers, yet fell below the Netflix series in terms of crowd-sourced viewer ratings. Moreover, all of these well-reviewed shows air on mass-market broadcast networks (two on ABC, one on Fox), yet Marco Polo saw much higher viewer response volumes than two of them.
Now, I get that there are problems with accepting online user reviews as statistical gospel. It's a self-selected sample, easily tilted by artificial grassroots campaigns, and much more. Still, I'm impressed by Marco Polo 's audience scores.
And did you know that the Emmy-nominated first season of Orange Is the New Black -- another Netflix original show -- only ties Marco Polo 's user score on 31% fewer reviews? House of Cards garners a slightly higher score, but on fewer reviews. If Netflix were running an AstroTurf campaign, you'd think that it would throw a bone to proven hit shows as well.
And of course, Netflix knows a lot more about Marco Polo 's audience reception than we do. I can estimate things from tweet trends and Rotten Tomatoes reviews until I'm blue in the face, and still never come close to the actual viewer engagement.
But the content planners at Netflix can pull up actual, factual reports at the drop of a hat. What they see in those reports was enough to inspire a second season of Marco Polo. Maybe it isn't the second coming of Game of Thrones, but it's also not the massive flop that TV critics expected. All things considered, Marco Polo just might be the sleeper hit of the season.
Timing is everything
Marco Polo 's second season is the big news here. With that out of the way, I have another interesting tidbit to discuss.
The traditional "sweeps" season, where broadcasters do their best to impress advertisers and audiences with big shows and special episodes, runs from late April to mid-May. Netflix shrugs at this long-established tradition, dropping no less than three brand-new shows just before that critical period.
Starting with the Tina Fey comedy The Unbreakable Kimmy Schmidt on March 10, through the issy Spacek and Kyle Chandler drama Bloodline on March 20, to superhero starter Marvel's Daredevil on April 10, Netflix gives audiences and critics a lot to chew on in four busy weeks. These are entire seasons in the now familiar binge-viewing format that Netflix favors, released in the lull just before the sweeps.
These are no soft experiments, either. Tina Fey is a proven eyeball magnet from the Saturday Night Live star factory. Bloodline comes with a bag full of hardware, starring an Oscar winner, several Emmy and Golden Globe recipients, and much more. Daredevil is the first in a bundle of gritty Marvel shows based in New York, and an important piece of Netflix's huge content deals with Walt Disney(NYSE:DIS).
In other words, Netflix is putting its A-team to work all at once. I'm betting that the company sees this period as particularly important, or it wouldn't get all of these top-shelf assets.
That could be because Netflix has seen big marketing moves making the greatest impact just before the sweeps. Stealing the broadcast networks' thunder in a relatively quiet period might have that effect.
Or, Netflix may simply be trying to smooth out the bumps of its seasonal patterns. New subscribers signing up to enjoy the shows discussed above would count against the summer quarter's customer counts and revenue tally. The second quarter is Netflix's slowest subscriber growth period, so adding a ton of attractive content right at the start of that quarter makes sense.
Either way, Netflix investors should keep a close eye on how March and April play out. These are big, important bets. Daredevil, in particular, will set the tone for the company's superhero partnership with Disney and Marvel. Getting this launch right must be at the top of Netflix content guru Ted Sarandos' list of priorities in 2015.