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For example, the people at Netflix could ask themselves “How many users who started Arrested Development (from season 1) finished it to the end of season 3?” Then they get an answer. If you’re watching a series like Arrested Development, Netflix is able to see (on a large scale) the “completion rate” (for lack of a better term) of users. Netflix has the advantage, because being an internet company allows Netflix to know their customers well, not just have a “persona” or “idea” of what their average customer is like. Ratings are just approximations, green-lighting a pilot is based on tradition and intuition. Traditional television networks don’t have these kinds of privileges in their broadcasting. With this data, Netflix can make better decisions and ultimately make users happier with their service.
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Having this large user base allows Netflix to gather a tremendous amount of data. – Joris Evers, Director of Global CommunicationsĪs of July 2018, Netflix has 130 million worldwide streaming subscribers. “There are 33 million different versions of Netflix.” (Without analytics, companies are in the dark about their customers.) Analytics gives businesses the quantitative data they need to make better, more informed decisions and improve their services. Then, the companies can optimize their marketing and deliver a better product. The core job of analytics is to help companies gain insight into their customers. Read on to learn more about the future of television programming and how analytics is helping Netflix become a better business and service. Netflix does need licenses from studios, but they don’t just pick movies and television shows at random.
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Saying that Netflix chooses new content based on “whoever they can get a license with” is a very thin and vague statement. The reality is that Netflix is a data-driven company.
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The decision was based on a number of factors and seemingly almost entirely on data. The $100 million show wasn’t green-lighted solely because it seemed like a good plot. They may also think that the show House of Cards was chosen because Netflix “thought subscribers might like it.” But the truth is much, much deeper. To the uninitiated, it may seem that Netflix’s analytics go only as far as views.
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“ We evaluated some of the new methods offline but the additional accuracy gains that we measured did not seem to justify the engineering effort needed to bring them into a production environment.”īut Netflix didn’t shun all algorithm and data efforts. However, Netflix never did implement the algorithm, saying:
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In 2006 Netflix announced the Netflix Prize, a competition for creating an algorithm that would “ substantially improve the accuracy of predictions about how much someone is going to enjoy a movie based on their movie preferences.” There was a winner, which improved the algorithm by 10%.