2013 In Review: Why Can't Netflix, Amazon And Apple Be More Transparent?

Every company needs its secrets. Some facts are trade secrets, some are just embarrassing and others just serve no real purpose if they were made public. I'm fine with a lack of transparency in a lot of areas in the business world. It's just part of the wonderful world of capitalism.

But to properly cover a company, you need a core set of metrics to judge success or failure. And technology-driven media companies seem genetically incapable of making public even the most basic numbers concerning their business. Even more galling, when reporters try and figure out the numbers independently, they're likely to get pushback from the companies complaining that their numbers "aren't accurate."

Granted, the push for transparency isn't helped by TV and media reporters who focus on the wrong numbers. For instance, one consequence of various network executives complaining about Netflix's refusal to release ratings numbers during last fall's TCA gathering is that their argument was relayed pretty much as stated by the high-paid stenographers that pass for segments of the TV press. That's not to say that there weren't a number of fine critics who wrote pieces dissecting the logic of the complaints. But far too many journalists are happy writing something along the lines of "Hey, I got to interview a bigshot executive and now I'm going to repeat what he said, with no context."

The problem is that the "Why won't Netflix release their viewing numbers?" was the wrong question. Sure, it would be an interesting stat to know and the legacy TV networks would love to have some figures that they could cherrypick in an effort to make Netflix seem less important. But how many viewers watch a particular show - original or not - has no reflection on Netflix as a whole. And comparing Netflix viewer numbers for a specific show to a specific show on HBO or FX really is a case of apples vs. oranges. You're trying to parse viewer numbers in an effort to compare two very different business models. It's an interesting intellectual exercise, but it's not really determinative of the strength of the company.

If Netflix deserves grief for not being transparent, then let's start with their efforts to hide when specific TV programs and movies are expiring from their service. Earlier this year, Netflix stopped sharing expiration dates through their API, making it impossible for outside companies to aggregate the information. Netflix does note on the individual program page when the expiration date is getting close, which means that the only way to report the expiration lists is to use something like this Reddit thread, in which customers post upcoming expiration dates they've noticed in their accounts. It's an insanely clunky way to aggregate information which should be easy accessible to the public. And yes, Amazon should be making the same information available as well.

But when it comes to Amazon and their Instant Video service, they apparently believe that they're immune from providing even the most basic information about their business. They don't report subscriber numbers to their Amazon Prime service, which also includes access to their rival to Netflix, Amazon Instant Video. Amazon has admitted that the service has "tens of millions" of subscribers, but not only is that number worthless, there's no sense of how many Amazon Prime subscribers actually take advantage of the Instant Video portion of their subscription. There has been some speculation that as many as a third of Prime subscribers rarely or never use Instant Video. But even if that were true, one third of "tens of millions" is a pretty vague number.

Then there is Apple, a company which is notorious for its lack of transparency and general distrust of the press. While you can find iTunes Top Sales Charts for lots of categories in music, TV and film, what you won't find are any actual sales numbers. So what does it mean when "The Walking Dead" is the most purchased TV program last week? Who knows. Well, that's not fair. Apple knows and so does the copyright owner and/or the entity who owns the digital rights. But there are no public disclosure of sales numbers, making it impossible to offer any metrics for success or failure.

These are just a few of the basic business metrics that remain invisible to the public and to the journalists covering major media companies. Secrecy serves the purposes of Apple, Netflix and Amazon, but it's a disservice to their customers and to investors.

The secrecy over basic information also is ultimately destructive for the company's relationship with their customers. Netflix's sensitivity over "Look what's expiring on Netflix" stories may have led it to make it more difficult to aggregate the data. But that difficulty also makes it more likely that customers (and journalists) will be surprised by these expiration dates. Being more transparent would make the expiration dates just another piece of data that will be passed along without the current level of editorial angst.

Data transparency goes against the natural inclination of companies that see secrecy as a way to control the narrative about their company. But in many cases this lack of transparency is also bad for their bottom line. But secrecy - like affairs with your local barista - always sound better while you're doing it than it does after its all been made public.