Netflix Secrecy Starting To Anger Studios (NASDAQ:NFLX)

Giants in the streaming world like Netflix, Amazon Prime, and Hulu are using the secrecy of the streaming industry to their advantage, which is starting to anger the studios that do business with them. The studios are making billion-dollar deals with Netflix, but they have almost no clue how their shows are performing because Netflix will not release the data. This gives streaming companies like Netflix the ultimate bargaining chip.

Because they possess all of the data on how many and what kinds of people watch their TV shows and movies, the streaming companies can refuse to release it for wider examination. The major studios are making deals with streaming companies without knowing whether the dollar amounts align with the performances of those titles on the streaming platforms.

Streaming companies releasing their numbers publicly would take away their advantage. If a studio knew how its content is performing, a more level negotiation for the content would take place. The streaming service would no longer be in control of the price of the deal.

Many in Hollywood want that standard to change. More and more people in the industry want some hard data on the number of people watching shows through streaming companies like Netflix. The filmmakers responsible for making streaming content are almost as clueless as anyone else.

Numerous third-party companies are beginning to pop up that have built algorithms to provide data about viewership through streaming services. However, the estimations made by these companies are nowhere close to being as reliable or specific as the internal information possessed by the streaming companies.

Streaming companies make their money from direct user subscriptions, completely different from the old media model of making money from advertising and fees from cable providers. Some believe that if one of the media conglomerates were to insist on streaming companies being transparent with their data during negotiations, it would level the playing field. It may take a major player walking away from a billion-dollar deal to change the status quo.