Welcome back to What I’m Hearing+. I’m Julia Alexander.

Hello from Los Angeles, where I am stationed for the week to see clients. It finally snowed (briefly) in New York—something I missed for a total of about five minutes. (And I’m Canadian…)

Tonight: dispelling the myth of the co-exclusive, a term that traditional studios are using to rationalize licensing shows to streamers. Theoretically, these deals allow legacy media players to both monetize library content and leverage a larger platform to raise awareness of the title. But, alas, it doesn’t often work out that way…

But first…

• Assessing the Netflix “decline”: Last week, reports suggested that time spent streaming TV and movies in 2023 declined by 7 billion hours compared to 2022—a 17 percent drop. But what does this mean? And how does this data cohere with the larger—seemingly incongruent—economic reality? In 2022, after all, Netflix’s stock cratered by half and ushered in a great correction for both the company and the industry. These days, of course, its market capitalization is sitting at around $208 billion, making it 20 percent larger than Disney.

  In recent years, Netflix has become more transparent with its data, which has helped analysts (to a degree) assess the efficiency of its content spend. Back in the old days, when Netflix was more coy, we could only estimate completed views based on the limited numbers it did report—such as the fact that 78 million households watched The Old Guard in its first four weeks of release back in 2020. The issue: Netflix considered two minutes of consumption a “view.” Netflix even had categories for different viewers: beginners (less than 2 minutes), watchers (more than 70 percent of a title), and completers (more than 90 percent). Then Netflix rolled out the Top 10 list, which looked at total hours viewed for a title, before it shifted once again last June to include a ranking by “total views”—a subtle move suggesting that engagement was more important than simple interest. That’s a lot of change in a short amount of time, making year-over-year analysis a little more complicated.

  Simply put, it’s not fair to compare two data sets where the rules have changed. Navigating these contextual aspects of data analysis will become increasingly important as other companies start releasing, modifying, and reworking their own data sets. It’s going to get a lot more complicated.

“Co-exclusive” is the new P.R. term of art deployed to describe not-actually-exclusive licensing arrangements between legacy studios, like Warners or Paramount or Disney, and pure-play streamers, like Netflix and Amazon. On some level, there’s an economic logic to these deals: Large media companies with barely profitable streamers and mountains of debt need to amortize their catalogs while paying lip service to their streaming brand. And if a title isn’t performing well on its own platform, why not syndicate it elsewhere and hope that renewed interest can juice value? (Let’s call that the Suits Strategy.)

There is a legitimate rationale for licensing to Netflix, even if it means eroding the perceived exclusivity of I.P. and brands. Warner Bros. Discovery recently attained profitability in its streaming division with this very strategy. If the goal is to boost revenue in the short term in order to rebuild content pipelines or pivot programming strategies, then “co-exclusivity” deals could be the smart play.

And that’s the issue: There simply aren’t enough intriguing series to entice the volume of customers these companies need. Meanwhile, they’re giving Netflix ammo to reduce its own churn even as it raises prices so it can invest in more content. Netflix isn’t perfect, of course: Its original film strategy is a mess (Rebel Moon reportedly cost north of $200 million and generated less than 60 million completed views in its first two weeks, surpassed by Sony’s The Equalizer 3 in its third week); its expansion in India has yet to pay off; and Netflix’s live events and sports strategy is still in flux.

But these aren’t existential crises, especially when everyone else is in far worse shape. Paramount is licensing Yellowstone to Netflix internationally, and movies like Warners’ The Meg 2 are appearing on Netflix not long after playing in theaters. It’s challenging, and there’s no easy answer—studios need cash to pay for streaming, which they can’t seem to quit, and they have tons of largely unwatched content that would be better monetized by Netflix or Amazon on a nonexclusive (sorry, “co-exclusive”) basis. At least then somebody will be watching it.