By David Z. Morris
November 5, 2017

The media trackers at Nielsen have announced viewership numbers for the second season of Netflix’s Stranger Things, revealing 15.8 million Americans had watched the first episode of the show by the third day of its release. That puts the show in the ranks of television hits such as Game of Thrones, The Walking Dead, and even the World Series.

And while that would seem to be great news for Netflix, the streaming company has already vociferously disputed the accuracy of Nielsen’s numbers. Nielsen announced in October that it was tracking streaming numbers, reportedly by using audio data gathered using the boxes it places in the homes of tens of thousands of volunteers. But Netflix objected immediately, saying “the data that Nielsen is reporting is not accurate, not even close, and does not reflect the viewing of these shows on Netflix.”

Netflix likely has a factual point – for instance, Nielsen’s method reportedly doesn’t capture streams on laptops or tablets, or outside the United States. But Netflix also must have had a fairly good idea when it made its statement that, even with imperfect methods, some of its shows would get headline-generating numbers. So why muddy the waters?

Most fundamentally, because making ratings public has little or no upside for Netflix. The company’s revenue is driven entirely by subscription fees. Instead of having to tout their shows to advertisers, Netflix just announces their steadily-rising subscriber numbers with their quarterly earnings reports.

But there’s another, more insidious reason Netflix might be motivated to undermine Nielsen’s ratings – because secrecy is part of their competitive sauce. Netflix uses its mass of data on viewers’ preferences to plan development of future shows, and at least in theory, wouldn’t want those insights publicly available.

Raw viewership numbers may be less useful than more subtle data, such as the complex taste profiles Netflix generates to guide users to the right shows for them. But every little trickle of information is something that competitors gunning for Netflix could use to gain ground.

There’s also a much broader lesson to be drawn here about the changing nature of business. The internet has destroyed the structures that once sorted consumers: everything from television channels to neighborhoods are less meaningful than they once were. In their place, user data has become the fundamental building block of business – giving companies every reason to keep it secret.

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