Just How Well Has Squid Game Performed for Netflix? There's a Dollar Figure for That

Last week, Netflix said a record 111 million households watched at least part of the bloody South Korean drama Squid Game, a rare disclosure of viewership data from the tight-lipped streaming service that only periodically shares how certain programs are doing on the service. Behind the scenes, though, Netflix has other metrics to gauge Squid Game's success—and according to those figures, it believes that the series will generate an estimated $891.1 million in value for the company. That nearly $900 million in estimated value, which was reported by Bloomberg, highlights the way that Netflix measures success internally, an approach that relies not on viewership alone but on the estimated value of different subscribers who end up tuning in. It also illuminates the challenges of measuring success for programs on streaming services that look to build out attractive, well-curated programming libraries that keep viewers coming back month after month. The dollar-figure amount is borne out of several metrics Netflix uses to track success, according to Bloomberg’s extensive reporting. Netflix uses a metric called adjusted view share, or AVS, which uses both the raw figure of total viewership—Squid Game reached 132 million viewers in 23 days, Netflix said—along with the estimated value of those viewers, a number based on when viewers signed up and how often they use the service. Extrapolate from that the estimated lifetime adjusted view share, and you get Netflix’s “impact value” metric, which for Squid Game was $891.1 million, per Bloomberg. Netflix Says Squid Game Is Already Its Most-Watched Show Ever Squid Game was also relatively inexpensive to make compared to its total value creation, helping the title out in terms of its internal success at the streaming service. The series cost $21.4 million to produce, according to Bloomberg, and scored high on Netflix’s own internal metric of efficiency, which measures viewership relative to its cost. It’s unclear exactly how Netflix calculates these metrics, and because there are few agreed-upon data points from one streaming service to the next, it’s impossible to make apples-to-apples comparisons with other shows on streaming rivals. Even with those limitations, though, the information offers a rare look into how the company reviews its titles and calculates success when services are keen on keeping performance metrics close to the chest. The internal metrics also highlight the extent of the trove of data that Netflix has at its fingertips to understand how its users are watching on the service and which titles stand out, as well as how viewership numbers alone don't tell the whole story. Netflix’s publicly released metrics of viewership hinge on whether or not a viewer completed two minutes of a program, leaving plenty of room to question just how popular a series was all the way through. 87 million people finished Squid Game Internally, though, there are far better internal metrics to highlight the extent of Squid Game's popularity than the publicly shared number. About 89% of the people who started the show watched more than one episode, according to Bloomberg’s reporting, and two-thirds of the show's viewers—or 87 million people—finished the series' entire first season. That completion rate would indicate that more people watched Squid Game in its entirety than subscribe to any of Netflix's biggest streaming rivals, aside from Disney+. Netflix, which last reported 209 million global subscribers, is slated to report its third-quarter earnings Tuesday afternoon. Last quarter, the company, reporting a stagnation of growth in the U.S. and Canada, told investors it was branching into video games to keep members more engaged on the platform.