How Netflix Uses Analytics To Select Movies, Create Content, & Make Multimillion Dollar Decisions. In 2. 00. 6 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 1. However, Netflix never did implement the algorithm, saying: “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.”But Netflix didn’t shun all algorithm and data efforts. To the uninitiated, it may seem that Netflix’s analytics go only as far as views. 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. The $1. 00 million show wasn’t green- lighted solely because it seemed like a good plot. The decision was based on a number of factors and seemingly almost entirely on data.

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The reality is that Netflix is a data- driven company. Saying that Netflix chooses new content based on “whoever they can get a license with” is a very thin and vague statement. Netflix does need licenses from studios, but they don’t just pick movies and television shows at random.

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Read on to learn more about the future of television programming and how analytics is helping Netflix become a better business and service. Analytics at Netflix. The core job of analytics is to help companies gain insight into their customers. Then, the companies can optimize their marketing and deliver a better product. Watch She Wants Me Online.

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. So how does Netflix use analytics?“There are 3. Netflix.”– Joris Evers, Director of Global Communications. At current count, Netflix has 1. Having this large user base allows Netflix to gather a tremendous amount of data. With this data, Netflix can make better decisions and ultimately make users happier with their service.

Traditional television networks don’t have these kinds of privileges in their broadcasting. Ratings are just approximations, green- lighting a pilot is based on tradition and intuition. 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. Let’s look at an example. 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. 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.

Let’s say it’s 7. Then they ask “Where was the common cut off point for users? What did the other 3. How big of a ‘time gap’ was there between when consumers watched one episode and when they watched the next? We need to get a good idea of the overall engagement of this show.”They then gather this data and see user trends to understand engagement at a deep level. If Netflix saw that 7.

Arrested Development. They know there’s a good chance users will watch the new season.

But the data gets deeper than that. Here’s a look at some of the “events” Netflix tracks: When you pause, rewind, or fast forward. What day you watch content (Netflix has found people watch TV shows during the week and movies during the weekend.)The date you watch. What time you watch content. Where you watch (zip code)What device you use to watch (Do you like to use your tablet for TV shows and your Roku for movies? Do people access the Just for Kids feature more on their i. Pads, etc.?)When you pause and leave content (and if you 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. They take various “screen shots” to look at “in the moment” characteristics.

Netflix has confirmed they know when the credits start rolling; but there’s far more to it than just that. Some have figured these characteristics may be the volume, colors, and scenery that help Netflix find out what users like.

Why does Netflix want to know when the credits roll? They probably want to see what users do afterward. Do they leave the app or go back to browsing? Notice how Netflix now offers movie recommendations (they have personalization algorithms that aim to accurately predict what users will watch next) soon after credits start (or, for television shows, they automatically play the next episode). Because if users leave the app after watching a show, that may mean they are more likely to cancel. Allow me to explain: Through their analytics, Netflix may know how much content users need to watch in order to be less likely to cancel.

For instance, maybe they know “If we can get each user to watch at least 1. If they drop below 5 hours, there is a 9. So now that they have this data, they can ask themselves “How do we help users watch at least 1. One idea: enable post- play, which automatically plays the next episode of a TV show unless the user opts out. For movies, show movie suggestions (based on the rating of the movie just watched) right after the credits start rolling and allow users to press play right from that screen. Netflix can add this feature to their web and mobile apps and, again, through analytics, see the results.

This is only a theory of how Netflix came to the decision to implement post- play and an example of how analytics can help Netflix make decisions. I don’t have any inside information. So all of this data and the large user base allow Netflix to quickly see trends and formulate opinions.

Later, we’ll get into the factors that made them green- light House of Cards. The Recommendation Algorithm.

As part of the on- boarding process, Netflix asks new users to rate their interest in movie genres and rate any movies they’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. Watch Frozen Kiss IMDB.