BI Case Study

The Data-Driven Proof Netflix Needs To Buy A Blockbuster

26 February, 2015

The Data-Driven Proof Netflix Needs To Buy A Blockbuster

According to Netflix quarterly earnings, the company currently has over 53 million streaming customers worldwide. With such a large amount of users, Netflix has the ability to gather massive amounts of data in order to make better decisions about which television series to buy, kick and keep as well as get a better sense for what original show types will do well among their audience.

For example, the Netflix series House of Cards, was not choses simply because it seemed like it had a good plot, but rather, the $100 million dollar show was given the green light because data proved subscribers would like it.

Using big data analytics, Netflix is able to track an endless amount of information, including: when you pause, rewind or fast forward, what day and time you watch content, where you watch it from (based on zip code), what device you use to watch, the ratings you give, the things you search for and your browsing and scrolling behavior.

All of this data gives Netflix an unmatchable advantage against traditional television networks that have to make broadcasting decisions based on tradition and intuition. T.V. stations have to create a likely “persona” of their customers, while Netflix is able to get an accurate knowledge of their customers before making decisions.

Not only does this allow Netflix to avoid the risk of buying into a big flop, but it also allows it to create an algorithm that automatically recommends movies and shows the user will likely find interesting based on past trends. This keeps users watching, which in turn, prevents them from cancelling their subscription—Netflix’s main objective.

Netflix has proven to be a prime example of how data and analytics can give vital insight for both running a better business and offering a superior product.

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