Genre-Driven Streaming Video Content Strategy | Altman Solon

Altman Solon is the largest global strategy consulting firm exclusively working in the TMT sectors. Our team analyzed Netflix’s recently released Engagement Report to understand Netflix’s performance within the “mid-tail” of titles. This report explores opportunities for streaming services and studios to develop a genre-driven content strategy.

Netflix’s Engagement Report has spawned a flurry of analysis across the media industry. The infamously opaque streamer provided audience data for the first time for over 18,000 TV series and movies. Not surprisingly, top titles like The Night Agent and Ginny & Georgia generate hundreds of millions of viewership hours. Indeed, the top 3% of titles generate about 37% of hours viewed, and a “long tail” of more than 10,000 titles accounts for approximately 4% of viewership. In a world where streaming services compete for viewers, unlocking the potential of the other ~60% of Netflix’s “mid-tail” viewership is key to attracting and retaining subscribers. Streaming services have opportunities to build on findings from Netflix’s report to quantify audience preferences, develop more cost-effective content strategies, and differentiate from competitors.

Drawing on insights from our 14^th annual Consumer Video Study, Altman Solon developed and applied a proprietary content genre taxonomy to Netflix’s Engagement Report to understand performance by genre in the mid-tail. We analyzed content sub-genres across key criteria: runtime (hours of content available) in Netflix’s catalog, viewership, efficiency (hours of viewership per hour of runtime), and alignment with stated consumer preferences. Key findings reveal:

• More than half of the runtime in Netflix’s mid-tail catalog is focused on Kids & Family, Drama, and Action & Crime TV series, while movies comprise 17% of the runtime.
• From a viewership perspective, the leading content sub-genres are for kids or are family-friendly.
• Thriller & Horror is the leading TV series sub-genre when it comes to efficiency.
• Monster, Action Comedy, and Law Enforcement lead the movie sub-genres in efficiency.
• TV series and movies have similar efficiency, with the most efficient sub-genres having in the range of 500,000 to 1 million monthly hours viewed per hour of content available in Netflix’s mid-tail.
• Netflix’s efficiency per sub-genre is highly correlated with Altman Solon’s measurement of self-stated consumer preference by sub-genre. Outliers that over-perform on efficiency versus stated consumer preference include plot-driven genres like Gangster & Heist TV series and movies. True Crime and “light” subject matter tend to underperform, possibly due to poor execution or viewer abandonment.

While “hit” content is driven by marketing and word-of-mouth, mid-tail content is genre-driven

Viewership of “hit” content is largely driven by consumer awareness of specific titles thanks to marketing and word-of-mouth. In contrast, the mid-tail is where consumers decide what to watch based on genre preferences rather than interest in specific titles. As studios decide what content to produce and streaming services decide what to license in the mid-tail, it’s important to understand consumer interest at the genre and sub-genre level.

Recognizing the importance of genres and inconsistent genre categorizations used in the industry, Altman Solon developed a detailed genre taxonomy as part of our 14^th annual Consumer Video Study. The study analyzed the top nine U.S. subscription video-on-demand (SVOD) services, taking inventory of their TV series and movies, classifying them into sub-genres, and capturing episodes, runtime, and other data for each title. A subsequent 5,000-respondent online survey with choice instruments assessed consumer interest by sub-genre and likely SVOD adoption as content and price variables fluctuate. We measured and compared our Consumer Video Study findings alongside Netflix’s Engagement Report, excluding international titles.

Bulk of mid-tail genres include kids’ content, drama, and action & crime TV series

Analysis of Netflix’s mid-tail shows that more than half of the runtime is focused on Kids & Family, Drama, and Action & Crime TV series. Movies make up 17% of the runtime.

Hours of Runtime by Genre (TV Series & Movies)
2023, mid-tail runtime hours of Netflix catalog in thousands, all genres applicable to Netflix catalog

Unsurprisingly, TV series sub-genres are more highly represented in Netflix’s mid-tail catalog than movie sub-genres. Kids’ content is highly represented across both TV series and movies. The top six movie sub-genres by runtime are historically less expensive to produce than those like Thriller, Gangster & Heist, and others.

2023, Altman Solon sub-genre preference scores (driven by MaxDiff Analysis) vs. view time (000s hrs)/runtime (hours)

Netflix’s emphasis on kids’ content raises the question of how well the video industry overall can monetize this sub-genre. Kids’ content is inexpensive to produce and generates substantial viewership. Still, it can often be readily replaced—Max, Hulu, Disney+, Paramount+, and Peacock each have several thousand episodes of content for young kids—and may be less effective than other genres in generating ad revenue, reducing churn, or driving new subscribers.

The correlation between consumer preference scores and efficiency is even stronger for movies than for TV series. Here, most overperformers appear to have more suspenseful sub-genres as drivers of interest, with True Crime potentially underwhelming in quality versus expectations.

Content Efficiency by Preference Scores (Movies)
2023, Altman Solon sub-genre preference scores (driven by MaxDiff analysis) vs. view time (000s hrs)/runtime (hours)

Ultimately, there is a correlation between the sub-genres people prefer and those they actually watch, but differences emerge at the sub-genre level – driven in part by the quality of titles, degree of engagement, and other factors.

Leveraging genre data into a content strategy

It’s important to keep in mind that genre preferences vary significantly by consumer segment and extend beyond Netflix’s portfolio. Netflix is just beginning to experiment with live programming, but it is a significant preference driver, especially for older consumers, who have a much higher interest in live sports and news than younger consumers.

Ages 18-24 MaxDiff Scores by Sub-Genre (TV & Movie)
2023, ages 18-24, top 15 sub-genres

While analysis of Netflix’s Engagement Report and sub-genre preferences is one part of developing an overall content strategy, video producers and services should also consider:

• Using current audience versus prospective audience demographics and genre preferences to strike a balance between providing more of what current audience members want and expanding into new sub-genres to attract new consumer segments
• Monetizing impact by sub-genre to factor in differences by sub-genre with regard to advertising potential, subscriber/viewer acquisition, and churn reduction
• Analyzing per episode and per movie by sub-genre as part of developing an overall ROI assessment
• Determining industry “oversupply” and “undersupply” by genre, including which sub-genres have opportunities for growth or for pruning by monitoring inventory of competitors’ catalogs
• Understanding competitors’ audiences and their preferences to determine where to compete and where to differentiate by sub-genre
• Designing a distribution strategy that outlines how to license or window content to other platforms depending on genre and audience

About the study

Netflix’s Engagement Report has given us a unique opportunity to compare findings from our annual Consumer Video Study, conducted in summer 2023, to Netflix’s viewership measurements. Since our study was conducted in the U.S., but Netflix’s viewership report is global, we excluded internationally sourced content from our analysis and used global viewership of the U.S. catalog to measure efficiency. To focus our analysis on the mid-tail rather than on hits, we also removed the top 3% of TV series titles and the top 3% of movie titles on an hours-viewed basis. Lastly, we excluded sub-genres with fewer than ten titles.

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