Netflix uses big data to make their streaming video service as frictionless as possible. With this knowledge, Netflix is able to make intelligent choices on what titles they should offer as well as what movies they should avoid. In a recent interview, Netflix CFO David Wells revealed the company’s strategy for success and how Netflix uses big data.
How Netflix uses big data analytics started when Netflix was just a start-up. At the time, the streaming video company had just gone through a massive amount of reorganization. In order to streamline their business and cut expenses, Netflix turned to big data analytics to help them make the right moves. Big data analytics helped Netflix determine which programs would be of more interest to customers and the recommendation engine actually influences nearly 80% of all the video content streamed on Netflix.
The streaming video company has used big data analytics for several years, especially since its founding in 2021. The advent of internet TV on demand and DVD rentals on NetFlix led to an influx of customers and a high demand for television viewing. Because of the high demand and competition from cable providers, Netflix quickly learned that it was imperative to have a better strategy. The streaming video giant created the Netflix recommendation algorithm to help weed out undesirable or unqualified viewers. Today, Netflix boasts over two million subscribers and continues to experience explosive growth.
Netflix continues to make changes to increase customer retention and build better customer relations. One of the latest is the addition of an external IP address to all of their web sites. The change improves security and makes the network much more robust. The added security and robustness improve customer retention because customers who can’t log into the website are less likely to stay. The latest Netflix use of big data analytics helps the company map viewer behavior and develop tools to help retain customers.
Netflix’s recent release of its movie service, dubbed ‘NETFLIX ON DEMAND,’ also makes use of big data analytics. The release includes a recommendation system that allows users to recommend movies they want to see based on popularity, topic, or even genre. Netflix uses data to recommend movies based on demographics and overall user experience. Netflix not only makes money off of DVD sales but also streams the films directly from servers to millions of computers around the world.
Netflix’s decision to add a recommendation system to its website is an example of how big data and internet marketing can improve customer retention. Customers want to be able to look forward to seeing what new movies they can expect to enjoy. When they can look forward to watching a movie they have been looking forward to, they are more likely to stay with the company and recommend it to others. Netflix uses big data analytics to identify how movies are performing across the board, which helps improve customer retention. Recommendation systems are another example of how internet marketing can lead to better customer retention.
Netflix uses data to suggest what movie they think their customers will enjoy the most. They collect information from each customer survey and use it to create a recommendation engine. Each time a customer plays a movie on Netflix, the website recommends the most popular movies. If the customer enjoys one movie more than the others, Netflix will offer them a third movie free. This allows the customer to see three movies without having to continually search through the large library of titles on the Netflix website.
The recommendation engine is just one of several features that Netflix utilizes to maintain customer loyalty. Data and analytics are using to create programs that will continue to help retain customers. Big data and analytics can help Netflix identify which films and shows are most likely to spark customer interest in order to promote them more effectively. In addition, customer service experts use this type of analysis and data to make sure that their customer service representatives are always prepared and efficient. Netflix’s ability to analyze customer data and utilize it for recommendation creation and improved customer retention is unprecedented.