Professional Documents
Culture Documents
Table of contents:
By
Saket Toshniwal
ISEG School of Management
Why I chose Netflix
Netflix launched the Netflix prize, offering $1 million to the group that
could come up with the best algorithm for predicting how its
customers would rate a movie based on their previous ratings.
The winning entry was finally announced in 2009 and although the
algorithms are constantly revised and added to, the principles are still
a key element of the recommendation engine. At first, analysts were
limited by the lack of information they had on their customers only
four data points (customer ID, movie ID, rating and the date that the
movie was watched) were available for analysis.
Big Data analytics is the fuel that fires the recommendation engines
designed to serve this purpose.
Netflix uses this data to predict its customer patterns. This data
mining technique helps in cross selling, upselling, responsive
optimization, and a lot in the development phase of aCRM.
3. Quality of experience
To this end, the way that various factors affect the quality of
experience is closely monitored and models are built to explore how
this affects user behavior. Improving user experience by reducing lag
when streaming content around the globe, this reduces costs for the
ISPs saving them from the cost of downloading the data from Netflix
server before passing it on to the viewers at home.
By collecting end-user data on how the physical location of the
content affects the viewers experience, calculations about the
placement of data can be made to ensure an optimal service to as
many homes as possible. Data points such a delays due to buffering
(rebuffer rate) and bitrate (which affects the picture quality if youre
watching a film on Netflix that suddenly seems to switch from razor-
sharp HD to a blurry mess, youve experienced a bitrate drop) are
collected to inform this analysis.
Netflix has used Big Data and analytics to position itself as the clear
leader of the pack. It has done this by taking on other distribution and
production networks at their own game, and trumping them through
innovative and constantly evolving use of data. Many managerial
questions can be asked and answered with the use of descriptive,
predictive, and prescriptive analysis.
This news is just released today. It shows how Netflix is using data
from human behaviors to give a better customer experience.
Now you see how Netflix makes informed decisions based on data.
Clearly, data cannot make every decision; there are some situations
where intuition has to take over. For instance, data could not predict
that a show like Breaking Bad would be a success. The creator was a
former writer on The X-Files, and dramas are 50/50. In these cases,
decisions are heavily based on the people and team behind the idea of
the show. Whether Netflix can make a successful show like this (one
with little to no data) is yet to be seen.
What analytics and data can do is give you insight so you can run a
better business and offer a superior product. People with data have an
advantage over those who run on intuition or what feels right.
Do you have data to help you make decisions? If not, Netflix provides a
good case for why you should do so. Netflix Rocks! Analytics Rocks
Harder!!
Sources
https://blog.kissmetrics.com/how-netflix-uses-analytics/
https://getpocket.com/a/read/902639174
https://pr.netflix.com/WebClient/loginPageSalesNetWorksAction.do?c
ontentGroupId=10477
Saket Toshniwal
ISEG School of Management
MSc Digital Marketing and Customer Relationship Management 2015-
16