How Netflix Uses Big Data to Create A Vibrant Media Company
Netflix has become the largest online rental DVD rental company in the world with several hundred million subscribers. However, Netflix uses big data to help consumers find exactly what they want and when they want it. This helps Netflix improve their customer experience by anticipating their behavior and recommending what movies and TV shows to watch based on their past viewing habits. They also have an excellent reputation for timing their releases so that most people have already checked them out before the movie release date. It’s no wonder Netflix is on top of the market with such great growth.
Netflix has more than 100 million subscribers and having that number of subscribers means they can examine consumer data to determine what works best to increase customer retention. Big data has been beneficial to other companies, such as Tesco, when it comes to determining their retail strategies. Netflix has applied the same principles to their recommendation system and has used it to help create a better experience for their customers. Netflix has also used big data to help identify what parts of the country are producing the most likes per month, which is key to increasing their customer retention rate.
Netflix uses big data analytics to understand their audience and recommend their best matches based on user data and other factors. Netflix even recommends specific movies based on user’s IP addresses and even looks at where they are likely to travel to go see a movie. Netflix knows from watching movies at movie theaters what their audience likes and dislikes and makes every effort to deliver a user-friendly experience at home. One reason why Netflix continues to succeed is they have a very strong user base that continues to expand each day. Netflix is also one of the only streaming services that are subscription free.
At the heart of Netflix’s success is the Big Data initiative, which aims to partner with individual users and entertainment industries. In doing so, they not only get to tap into the massive potential of digital advertising, but in doing so, they are able to better understand their customer base. When Netflix first launched, the concept was met with both skepticism and cautious optimism. However, once customers began using the service and found out how easy it was to navigate, the television viewing experience took a drastic turn for the better. At the time, the company had yet to generate even a million subscribers, let alone pay TV ads.
Netflix uses big data analytics to identify the areas in which they need to innovate to stay ahead of their competitors. By partnering with entertainment industries, such as movie producers and filmmakers, Netflix not only gained invaluable access to talented individuals, but they also gained access to information that would allow them to better serve their customers. For example, the partnership was made possible due to the incredible amount of programming available through Netflix, which made it easy for people to locate movies that were released in just the right area. As a result, Netflix has been able to increase its customer base substantially, and its market share has continued to grow.
The recommendation system is another important component of Netflix’s success that has been built upon over time. In order to encourage customers to stay and continue watching their favorite shows, Netflix developed a recommendation system that is not unlike other successful television shows in the modern era. Every episode is ranked according to popularity, allowing users to look up what they want and find it with a few simple clicks of their mouse. In addition, because Netflix allows users to rate the television shows that they watch, the company has been able to build an incredibly valuable customer retention rate.
Netflix’s use of big data also gave them access to another highly valuable resource. It has been known for some time that television shows are more likely to be profitable to rent than cable or satellite subscriptions. Through the use of streaming, Netflix was able to realize this very valuable insight. They knew exactly when their subscriber base was at its peak, and therefore were able to plan their programming so that it always had the most chances of drawing a huge audience. They used this knowledge to make their DVD rental service an incredible success.
These two primary elements of how Netflix uses big data are extremely useful for the company. While they have been utilizing it for some time, it was only in the last year that their use of it increased exponentially. Through the process of learning and leveraging streaming technologies, they have been able to transform themselves from a simple internet business to a valuable media company. While no one can deny the value of streaming, it is equally difficult to imagine how the company would be able to stay afloat without it. Netflix clearly has made use of all of the tools available to them, and their success has been directly fueled by their understanding of how to leverage streaming data.