Netflix is an innovating machine. On the cloud side, the company that took the wind out of Blockbuster’s sails has built a massive, hyper-optimized, flexible and scalable infrastructure that serves as a shining example to its peers.
On the Big Data side, Netflix is gathering and analyzing data at a breathtaking pace and in eye-opening ways. The company has received high marks for its original TV series, Orange Is the New Black and House of Cards.
The traditional television model uses pilots and focus groups to make a decision on whether to order a full season of episodes. Netflix, however, used its rich pool of data to decide whether or not it would invest in House of Cards, according to a report from The New York Times.
Executives at the company knew it would be a hit before anyone shouted “action.”
Netflix, which has 27 million subscribers in the nation and 33 million worldwide, ran the numbers. It already knew that a healthy share had streamed the work of Mr. Fincher, the director of “The Social Network,” from beginning to end. And films featuring Mr. Spacey had always done well, as had the British version of “House of Cards.” With those three circles of interest, Netflix was able to find a Venn diagram intersection that suggested that buying the series would be a very good bet on original programming.
Big bets are now being informed by Big Data, and no one knows more about audiences than Netflix. A third of the downloads on the Internet during peak periods on any given day are devoted to streamed movies from the service, according to Sandvine, a networking provider. And last year, by some estimates, more people watched movies streamed online than on physical DVDs.
The second season of House of Cards is set to hit Netflix tomorrow, on Valentine’s Day, and demand for the show is so strong that many fans have hits the tweets to petition the company for an early release of the show. Based on this kind of enthusiasm, the data clearly steered Netflix in the right direction in terms of giving its audience what it wants.
Such predictive use of analytics is obviously in its infancy, but using data for fortunetelling could change the way business gets done. Imagine a restaurant that could whip up new recipes before being asked for them, or a fashion designer who could find guidance to suggest a demand for certain designs.
While some might fear that data-based decisions will sap creativity from business, that isn’t the goal of such initiatives. Done correctly, Big Data and business intelligence should help steer the ship, not replace the captain.