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TheStreet Open House

The 'Binge Viewing' Fallacy and the Ugly Death of Netflix

Stocks in this article: NFLX AMCX TWX

NEW YORK ( TheStreet) -- If the CEO of Netflix (NFLX - Get Report), the endlessly entertaining Reed Hastings, was a dance-club-dwelling bachelor on the prowl, he would score every single night of the week. If Netflix's content guy, Ted Sarandos, rode shotgun with him, Hugh Hefner would have nothing on the duo.

The Playboy Mansion could barely hold the meat market conquests of these two, assuming, of course, they could somehow bottle and transfer the charm they use on the media and transfer it to the world of available women. Like capturing the way you smell when you come back from the beach in a bottle of cheap perfume.

That's how the always-excellent Businessweek teased, on Twitter, an article about ratings for the series finale of "Breaking Bad."

The piece doesn't editorialize much so I'm not sure how the author feels about that 50,000 datapoint.

But, when you think about it, it's pretty paltry. Granted, that's an intense marathon binge view of the entire fourth season of Breaking Bad, but still 50,000 represents -- rough math here -- less than 0.2% of Netflix's subscriber base. That's worse than paltry. So, if we assume another 2 million or even 5 million unique subscribers watch reruns of Breaking Bad on NFLX over time, what does that really mean?

Of course, it's good news for AMC Networks (AMCX - Get Report) ...

But wait ...

As much as I love eating up the things Hastings and Sarandos tell us like a plate of al dente rigatoni, I must stop down for a minute ...

Not everyone agrees with the power and glory of the people watch reruns on Netflix, subsequently boosting current season viewership trajectory. Here's an excerpt from Albert Fried analyst Richard Tullo's latest research on NFLX and AMCX:

Moreover we also think Breaking Bad is a driver of NFLX success as opposed to NFLX driving Breaking Bad.

The average Google Trend of Breaking Bad is about 10x greater than the same trends measured for House of Cards and Orange is the New Black.

We think Breaking Bad is a better driver of AMCX revenue as compared to NFLX and it's also a driver of NFLX costs.

Netflix pays how many millions of dollars for reruns ( wait ... right, we don't know!), a small segment of its subscriber base -- even if we're way generous -- watches them and somehow this is a good thing? Not at $8 a month with the sum representing the only meaningful line of revenue in Netflix's business model.

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