How Big Data Helped Netflix Be­come a Force to Reckon With

With con­sumer data and avail­able tech­nol­ogy Netflix has used big-data an­a­lyt­ics ef­fec­tively. It is also one of the ear­li­est adopters of Ama­zon cloud ser­vice

PCQuest - - CONTENTS - – Sid­harth Shekhar

Fi­nally the en­tire buzz re­gard­ing Netflix be­ing launched in In­dia has turned out to be true. The pop­u­lar provider of on- de­mand stream­ing In­ter­net me­dia has been launched in In­dia along with 130 other coun­tries. Many DTH oper­a­tors might feel the heat but it would be too soon to as­sume the real im­pact, as the In­ter­net band­width in In­dia could be a de­ter­rent, es­pe­cially in tier II and III cities.

Big data and an­a­lyt­ics have played a key role in Netflix’s suc­cess, which it has man­aged to lev­er­age at the right time, well ahead of oth­ers.

How Netflix Lever­aged Big Data

Through the pop­u­lar Amer­i­can drama se­ries, House of Cards, Netflix brought tele­vi­sion to the In­ter­net and now, its world­wide pres­ence is set to in­crease man­i­fold with this launch. Be­fore pro­duc­ing House of Cards, Netflix knew through its users’ brows­ing be­hav­ior that Kevin Spacey and David Fincher’s movies were pop­u­lar among them. Also, the Bri­tish ver­sion of House of Cards, which was re­leased in 1990 was very pop­u­lar at that time which made the com­pany to give a go-ahead to this $100 mil­lion in­vest­ment for cre­at­ing a U.S. ver­sion of House of Cards. This high de­gree of con­fi­dence and trust based on the di­rec­tor, the pro­ducer and the ac­tors was only made pos­si­ble through in­tri­cate al­go­rithms which helped Netflix to de­ter­mine peo­ple’s in­ter­est in political drama.

In a nut­shell, it knew about the ex­act type of con­tent re­quire­ment of the mar­ket and House of Cards was a con­tent mass-per­son­al­iza­tion ef­fort on its part based on real-time user anal­y­sis. So, when­ever users visit Netflix home­page they leave a dig­i­tal trail that the com­pany rou­tinely mines to un­der­stand their pref­er­ences.

A few things that Netflix tracks are: The date/day/time when con­tent is watched User zip code De­vice type used If the con­tent is paused User rat­ings Searches Brows­ing be­hav­ior

It doesn’t end there. In fact, it was Netflix’s’ un­der­stand­ing of its au­di­ence be­hav­ior through back­end big-data an­a­lyt­ics that made the com­pany so sure about the suc­cess of its other high-end pro­duc­tions like Dare­devil and Jes­sica Jones based on Marvel Comics post House of Cards. In the last five years, 23 Hol­ly­wood movies based on DC and marvel comics char­ac­ters have been re­leased. Netflix tapped all such con­tent mar­ket in­for­ma­tion and from rent­ing out third party con­tent in 1997 through mail sub­scrip­tion, it geared it­self into orig­i­nal con­tent de­vel­op­ment from 2013 based on user in­for­ma­tion gath­ered in the last cou­ple of years.

This is a ma­jor event in the an­nals of on­line con­tent stream­ing in­dus­try and big- data an­a­lyt­ics has played a ma­jor role in it. In­dia is a po­ten­tial niche mar­ket for Netflix and avail­abil­ity of great va­ri­ety of con­tent can be a ma­jor draw. On­line con­tent stream­ing has been

around via YouTube, Ya­hoo and Hulu to name a few, but the key flag­ship brand like Netflix was miss­ing.

Big-data Vir­tu­al­ized

Netflix has adopted some of the most so­phis­ti­cated Big Data tools with pri­mary fo­cus on cus­tomers and tech­ni­cal pro­fes­sion­als who con­stantly tweak the al­go­rithms based on an­a­lytic read­ing. With on­line stream­ing tele­vi­sion al­ready pre-loaded with a wealth of data on user view­ing habits, Netflix can make a mark and stand out, pro­vided it uses the right tal­ent and di­rec­tion. Add to that the fact that Netflix doesn’t blindly pick any movies for stream­ing as li­cens­ing cost is very ex­pen­sive, so con­sumer data is used to make a de­ci­sion.

Con­sumer In­ti­macy

Open the Netflix web­page for sign-up and you can see on the page, “Just two more steps and you’re done! We hate pa­per­work too.” This no-fuss ap­proach in the age of in­stant grat­i­fi­ca­tion where con­sumer is just a click away from loads of con­tent is an added plus for the brand. This not only helps the user but also the brand which knows the kind of data re­quired for gen­er­at­ing tar­geted be­hav­ioral in­for­ma­tion once a con­sumer starts us­ing the ser­vices. From users’ view­ing be­hav­ior to an­a­lyz­ing in­de­pen­dent search terms Netflix has all the data it needs for a sound de­ci­sion mak­ing when it comes to con­tent pro­duc­tion.

To Con­clude…

By de­ploy­ing an­a­lyt­ics and data com­pa­nies can run their busi­ness ef­fec­tively and its use is cru­cial for them to main­tain a com­pet­i­tive edge over their peers. All has not been rosy for Netflix though, as there have also been many con­cerns on the im­por­tant eth­i­cal ques­tion of con­sumer pri­vacy is raised. Netflix has been in soup over this in the past few years. It vi­o­lated fair-trade laws and a fed­eral pri­vacy law pro­tect­ing video rental records, when it launched its pop­u­lar con­test – Netflix prize – in Septem­ber 2006 for the im­prove­ment of in-house al­go­rithm, called Cine­match. It was sued for re­leas­ing the plain­tiff’s dataset to the con­tes­tants which iden­ti­fied her sex­ual ori­en­ta­tion. Later, a set­tle­ment was reached with the plain­tiff.

Over­all how­ever, the com­pany has done well for it­self by us­ing Big Data. Let’s see how the com­pany does in In­dia.

Netflix creates a pro­file based on users’ choice

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