How Netflix uses Big Data in practice
Legendary Hollywood screenwriter William Goldman once said, “Nobody, nobody – not now, not ever – knows the least goddamn thing about what is or isn’t going to work at the box office.” Netflix has been determined to prove him wrong by building a business around being able to predict exactly what its customers will enjoy watching. As such, Big Data analytics is the fuel that fires the “recommendation engines” designed to serve this purpose.
More recently, Netflix has started positioning itself as a content creator, not just a distribution method. Unsurprisingly, this strategy has been firmly driven by data. For example, data showed that Netflix subscribers had a voracious appetite for content directed by David Fincher and starring Kevin Spacey. After outbidding other networks for the rights to House of Cards, Netflix was so confident the programme fitted its predictive model for the “perfect TV show” that it bucked the convention of producing a pilot and immediately commissioned the first two seasons. Netflix has since added many other original shows, like Orange is the New Black, to its offering. The strategy has been a great success – 90% of Netflix members have engaged with the company’s original content.
The technical details
Netflix’s recommendation engines and new content decisions are fed by data points such as what titles customers watch, how often playback is stopped, ratings given, etc.
The company’s data infrastructure includes Hadoop, Hive and Pig, plus traditional business intelligence tools like Teradata and Micro Strategy. It also includes Netflix’s own open-source applications and services, Lipstick and Genie. And, like the rest of Netflix’s core infrastructure, this all runs in the Amazon Web Services cloud.
Ideas and insights you can steal
Netflix shows us how, these days, just about anything can be predicted with incredible accuracy – even those things thought previously impossible. Indeed, we can expect to see more and more content providers invest in predictive content programing. What any business can learn from this is that it’s getting increasingly easy to understand exactly what your customers want – whether it’s what they want to watch after work, what kind of yogurt they want to eat, or whatever. So, rather than acting on assumptions about what customers want, businesses should be basing their decisions on hard data.
You can read more about how Netflix is using Big Data to drive success in Big Data in Practice: How 45 Successful Companies Used Big Data Analytics to Deliver Extraordinary Results.
Bernard Marr is an internationally bestselling author, futurist, keynote speaker, and strategic advisor to companies and governments. He advises and coaches many of the world’s best-known organisations on strategy, digital transformation and business performance. LinkedIn has recently ranked Bernard as one of the top 5 business influencers in the world and the No 1 influencer in the UK. He has authored 16 best-selling books, is a frequent contributor to the World Economic Forum and writes a regular column for Forbes. Every day Bernard actively engages his almost 2 million social media followers and shares content that reaches millions of readers.