The success of Netflix through big data

The third series of the popular Netflix original TV show House of Cards streams tomorrow. Fans have been counting down to 27th February for weeks. However, based on Netflix’s use of big data, did we ever have a chance to dislike the show?

Netflix's use of big data

The streaming giant spends approximately $3 billion a year on TV and film rights, with about $300 million being used for making Netflix original shows. And, unlike traditional media outlets who had to trust to limited market research numbers and instincts, Netflix uses and analyses the viewing habits of its 44 + million subscribers worldwide to customise the customer experience, but more importantly, to land on a hit show. Netflix uses and analyses the viewing habits of its 44 + million subscribers worldwide. Netflix collects Big Data to understand how its users behave on the site and what their preferences are. The company take into consideration: what their subscribers’ watch, when they watch, where they watch, what they search, the ratings they give …and the list goes on and on. Based on all this data they collect, Netflix could safely determine that certain ingredients would lead to the phenomenal success of House of Cards. A healthy amount of subscribers streamed David Fincher’s ‘The Social Network’ on the site and watched the film from beginning to end without leaving. Also, Kevin Spacey films on Netflix have, on average, 5 star ratings from customers. Finally, the original British version of House of Cards was extremely popular with Netflix users. And so the company bought the licence to the show without even watching the pilot.

House of Cards ads

After having dedicated $100 million of budget to acquiring the show, Netflix again turned to Big Data to promote the show. Netflix created 10 different advertisements to feature on the site. [caption id="attachment_961" align="alignnone" width="852"] An example of one of the trailers Netflix used[/caption] For customers who had previously watched “chick flicks," Netflix pushed Robin Wright and Kate Mara’s strong female characters in the ads. Additionally, when die-hard Kevin Spacey fans (those who had rated his films highly) logged into their Netflix accounts, they saw advertisements that introduced Kevin Spacey’s character. And so forth, until all subscribers were segmented into 10 large groups and received their own customised House of Cards ad.

Criticism

However, despite the popularity of Netflix with users across the globe, the company and its use of Big Data has received its fair share of criticism. When Netflix “recommends” content to its subscribers to watch, many wondered what stopped Netflix from using the algorithm to push Netflix Original TV shows over the other programmes streamed on the site? Additionally, some critics have suggested that the TV and Film industries will lose their creative flair in favour of using Big Data to create hit shows. Other bits of information that Netflix gathers on consumers are called "events," which include:

1. When you pause, rewind or fast forward
2. What day you watch content--Neflix has discovered that people watch TV shows during the week and movies on the weekend
3. When you pause and leave content--and whether you return to finish the show or film
4. Browsing and scrolling behaviour
5. Searches--globally there are 3million per day

I am a massive fan of House of Cards, having binged watched every series to date. However, it is strange to think that, without meaning to, a lot of information about myself can be inferred from my Netflix viewing habits. This begs the question, is there such a thing as privacy in today's day and age? And if there isn't, how is the use of Big Data monitored and controlled?

Every click you take

The road bump facing regulators is, how can they control the collection, storage and trading of personal data online when these activities, and the companies themselves, operate in several countries and across many jurisdictions? In the UK the Information Commissioner's Office (ICO) will fine those who run a foul of the Data Protection Act (DPA). In July 2014, the ICO published its first Big Data guidance document, which acknowledged that companies collecting data on consumers must keep the information secure and encrypted, ensuring that the data is not held for longer than necessary and is "adequate, relevant and not excessive." US retailer Target have shown how collecting Big Data and using it for promotional opportunities can lead to a faux pas. Tracking their customers browsing and purchase habits, Target was able to work out when female customers appeared to be pregnant. To encourage greater sales and customer loyalty, Target would send discounts to these expectant mothers as their due dates approached. However, an angry father confronted a Target store manager when his daughter was sent discounts on baby items. He believed the inclusion of such discounts was inappropriate. The daughter had yet to reveal that she was pregnant, which she had to admit following the situation. This case clearly displays the power of Big Data and the importance of data protection, data security and privacy. The laws and regulations surrounding Big Data are still evolving as its usage is still relatively new. Make sure to stay updated on privacy concerns around this issue, as companies collecting and using Big Data to inform their marketing campaigns, promotions, landing a hit show and more will only become more advanced.

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