Inside the startup that infuriated Netflix by claiming to know how many people were watching its shows

Jessica jones marvel netflix review 2Myles Aronowitz/NetflixNetflix’s superhero drama, Jessica Jones.

Last month, NBC kicked off a firestorm when its head of research claimed a startup called SymphonyAM had uncovered the secret of how many people were actually watching Netflix. And that the numbers weren’t good.

Netflix fired back, calling the data “remarkably inaccurate,” and taking shots at NBC’s own low ratings.

The reason this issue is so contentious is because Netflix is notoriously secretive about its viewership numbers, to the point where even its show creators often don’t know how many people are streaming their work. Netflix says this is because public ratings are actually bad for the process of creating great shows, and because it wants to retain its data advantage.

But not knowing where they stand in relation to Netflix drives networks like NBC up the wall. And they will pay good money to get a glimpse behind the curtain.

That’s where SymphonyAM (Symphony Advanced Media) comes in. The startup has developed an innovative way to measure viewership, not just across TV and streaming, but also across platforms like smartphones, laptops, and tablets.

Here’s how it works.

It all starts with the smartphone, CEO Charlie Buchwalter tells Business Insider.

“These devices are admirably suited to be meters of media usage,” he explains. “The microphones are very good, the batteries last longer and longer. And they are ubiquitous.”

Because of this, the smartphone is how SymphonyAM measures what its volunteers are watching. SymphonyAM pays people between $5 and $11 per month to have its app installed on their phone. So far, Buchwalter says they have built a representative panel of 15,000 people, which will be up to 20,000 by end of March.

Kevin spacey house of cardsNetflixSymphonyAM hears what show you’re watching.

Once the app is on someone’s phone, the app uses the microphone to listen to sounds coming from a TV.

SymphonyAM has worked with Gracenote, which provides information about audio and video content to big players like Apple’s iTunes, to figure out unique audio codes for different shows on 210 national channels plus streaming services like Netflix and Amazon. Once the app recognises what someone is watching, it logs it. Participants also install the app on devices like laptops and tablets, so even if the app can’t hear the audio, it knows what you are watching on those platforms.

Buchwalter says SymphonyAM has indexed 60 to 70 original shows from Netflix and other premium streaming services.

One of the advantages of SymphonyAM is that it tracks shows for 35 days after they have been released, as opposed to the “live plus seven days” that is the industry standard. This makes it more effective for measuring streaming, according to Buchwalter.

“Up to 40% of the viewing is happening beyond [the 7 day timeframe],” he says.

How accurate is the data?

Buchwalter says he is confident in the numbers his company gives to clients, but TV executives have expressed some doubts.

Even NBC’s Wurtzel admitted, “The methodology is not perfect. They have only been providing data for six months. They have hardly been around long. There are plenty of growing pains.” But the industry has had similar doubts about the accuracy of Nielsen ratings, which are still considered the industry standard.

While the absolute numbers might be in dispute, SymphonyAM certainly is providing the ability to compare streaming shows against each other for the first time. “There is a lot of interest in the ability to look at streaming originals side by side,” Buchwalter says. “People are trying to understand how consumer behaviour is changing.”

SymphonyAM’s ultimate goal is to perfect a metric that tracks consumption everywhere, something that Nielsen doesn’t do — yet. Cross-platform data is what the networks want, according to Wurtzel.

And right now, no one can quite give it to them.

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