NETFLIX - THINK BIG

Netflix is a streaming media provider based in US. The company, which started as a small DVD-by-mail service in the U.S., has expanded its streaming video services worldwide in the last few years.
With around $7 billion annual revenue, the success is undoubtable.

statistica.com

SECRET KEY TO SUCCESS? ANALYTICS

The main job of analytics is to help companies gain insight into their customers, optimizing their marketing and deliver a better product.  Analytics gives businesses the quantitative data they need to make better, more informed decisions and improve their services. Without analytics, company is blind.

WHAT DOES NETFLIX SEE?

Netflix see "DATA" and its importance to them. At current count, Netflix has 83.18 million worldwide streaming customers. Having this large user base allows Netflix to gather a TREMENDOUS amount of data.

TREMENDOUS DATA = BIG DATA

NETFLIX come straight to mind when it comes to Big Data.
Thinking of the word "BIG", the question pops to mind would be, how BIG?

"its not the amount of the data that matters, but what the businesses do with the data"

As starting point, understand that Netflix has the advantage as internet company that allows Netflix to know their customers well, not just have a “persona” or “idea” of what their average customer is like.
By this means, Netflix can make better decisions and ultimately make users happier with their service.

Netflix gain insights from analyzing what customer do when streaming, such as:

• What day cust watch content (Netflix has found people watch TV shows during the week and movies during the weekend.)
• What device cust use to watch (Do you like to use your tablet for TV shows and your PC for movies? Do people access the Just for Kids feature more on their iPads, etc.?)
• When cust pause and leave content (and if they ever come back)
• The ratings given (about 4 million per day)
• Searches (about 3 million per day)
• Browsing and scrolling behavior
• Netflix also looks at data within movies to find out if customer skip credits.

Why NETFLIX cares?

Through their analytics, Netflix may know how much content users need to watch in order to be less likely to cancel,

 “If we can get each user to watch at least 15 hours of content each month, they are 75% less likely to cancel. If they drop below 5 hours, there is a 95% chance they will cancel.”

So now that they have this data, they can ask themselves “How do we help users watch at least 15 hours of content per month?”

NETFLIX RECOMMENDATION is the answer

assessing customer entertainment preferences (performing better job of targeting users with offers for shows/ movies they might like based on previous watched movies by the user)

Few months ago, I, personally, registered to NETFLIX. On the boarding process, Netflix asked new user (me) to rate my interest in movie genres and rate any movies i’ve already seen.

Why do they do this right up front?

"Because helping users discover new movies and TV shows they’ll enjoy is integral to Netflix’s success."

If people run out of movies they want to watch and have no way to find new movies, they’ll cancel. It’s important that Netflix puts a lot of focus on making sure they have an accurate algorithm for this rather than having users rely on outside sources to find new movies, or even users' personal preference.

How the recommendation system works?

FORBID "RUNNING OUT OF MOVIES"

For myself, yes, movies is life. I love movies - who don't?. But often, during long-boring-summer break, I asked myself

"What more to watch?".

Netflix assure me that I wont ever have to face that problem again.

The point is, to get consumer, spend more and more time streaming on Netflix, therefore consumers have more tendency on long term subscription to Netflix.

Is the recommendation algorithm accurate and successful?
Since 75% of viewer activity is based on these recommendations,
Personally, I’d say it works very well on Netflix