Strange Things from Your Data


You know Netflix. You probably have an account, binge watch your favorite shows, have a long “My List” of content you have queued to watch. You probably flip through the “Because you watched” recommendations checking for what looks interesting.

You have likely heard of the $1,000,000 Netflix Prize. Best Netflix’s algorithm to more accurately predict user ratings.

The Netflix Prize was an open competition for the best collaborative filtering algorithm to predict user ratings for films, based on previous ratings without any other information about the users or films, i.e. without the users or the films being identified except by numbers assigned for the contest. (Source: Wikipedia)

It took a team of collaborating researchers two years to win the prize.


Why is this important?

Netflix’s competitive differentiator is user data and their prediction and recommendation algorithms. This is the foundation of Netflix’s success and growth. This is about customer experience – providing a unique service where Netflix is able to surface, recommend and guide users to video they will like.


Netflix’s new disruption

Today, you will no doubt be familiar with the fact that Netflix was one of the first media providers to launch original content programming. House of Cards has been Netflix breakout series, disrupting the industry in batch releasing content, launching today’s ‘binge watching’ phenomena.


Data and entertainment

What’s more interesting, is that House of Cards is a content asset largely defined by data. (Note: There are many articles available through Google search that detail more specifics if you like). Netflix used data to understand what customers wanted, to identify preferences in story structure, preferences in actors, preferences in style, preferences in genre, preferences, preferences, preferences. The understandings (analytics) from millions of data points gave Netflix the building blocks to design a series that customers would want to see – House of Cards.


Content shaped by data

Stranger Things is another Netflix original series shaped and guided by user data. The series, with very little promotion, has attracted Netflix users and is rapidly growing an avid following. How – users watched and provided high ratings; other users saw those high ratings and checked out the series; Netflix’s recommendation algorithms suggested the series to more users; a virtuous cycle of watch, rate, rise, recommend continues. The series is now, by all practical metrics, a runaway success.


Takeaways (Digital)

Digital….. Data / Analytics / Digital Marketing / Customer Experience. These disciplines are inextricably linked through “digital.” What Netflix has done, harnessing data to understand customers, identify unmet needs, and deliver for customers exactly what they are looking for, is translatable to all businesses. This approach translates across industries with applications in banking, healthcare, travel and transportation, retail and more.

Key = the value of analyzing customer data to spot unmet needs, identify preferences, define what users like and use those insights to create new products.

What product one creates depends upon the industry, but the process is universally applicable.


What will come next from the data?

I’m curious to see what new shows Netflix produces from customer data. What perfect series will Netflix bring for me? How will Netflix next delight me with unexpected new shows that happen to align with what I want to watch.

I’m curious to see what new offerings other businesses innovate from this approach.

I can’t wait to see what Netflix does with my data.

I can’t wait to see what you are going to do with your data.



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