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Netflix Takes a Subtle Jab at Amazon

By Rick Munarriz - Sep 24, 2015 at 7:00AM

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The leading video service knocks its rival's pilot previews. (AMZN 0.25%) is at it again. Fresh off the multi-Emmy success of Transparent, the leading online retailer is hoping to stock itself with more gems for its growing digital vault.

Amazon Studios unveiled six new shows that it may add to its roster. It will make the pilots to all of the shows available later this fall, incorporating viewer ratings and comments into the decision of which ones to finance for complete first seasons.

This isn't the first time that Amazon tries to democratize the green-lighting process. It did so two years ago, leading to the eventual birth of several shows including Alpha House and Betas. Leaving the decision to bankroll future shows up to the masses -- and Amazon makes the free pilots available to everyone, not just Amazon Prime members -- can be dangerous, but it does help generate initial buzz as Internet video consumers buy into the shows that are ultimately selected.

This would seem to be a good time be Amazon, but now we have Netflix (NFLX 1.56%) trying to crash the pilot party. Just as Amazon Studios was unveiling a star-studded lineup of pilots on Wednesday, Netflix was putting out a press release arguing that it takes time for folks to warm up to hit shows.

The dot-com darling analyzed its global streaming data, looking at the inaugural seasons of a dozen of the most popular shows available on the site. It tried to determine the moment when a view was hooked, a metric that Netflix defines as the episode where at least 70% of the viewers wind up watching the entire first season. 

It wasn't until the third episode of Netflix's own House of Cards and Orange is the New Black that viewers were hooked by Netflix's measuring stick. It took as long as eight episodes for How I Met Your Mother to stick. The two shows with the quickest paths to addiction -- Breaking Bad and Bates Motel -- grabbed its audience by the second episode.

Netflix's theory -- and its jab at Amazon -- is that pilots aren't enough.

"Given the precious nature of primetime slots on traditional TV, a series pilot is arguably the most important point in the life of the show," Netflix Chief Content Officer Ted Sarandos is quoted as saying in the release. "However, in our research of more than 20 shows across 16 markets, we found that no one was ever hooked on the pilot. This gives us confidence that giving our members all episodes at once is more aligned with how fans are made." 

Is it a coincidence that Netflix is bashing pilots as a predictor of success on the same day that Amazon is announcing that it will decide the fate of a half-dozen shows on the performance of its initial episode? It's not. Netflix is being transparent -- even if it missed out on Transparent

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