LOS GATOS — While its video streaming service shines with a Hollywood sheen, Netflix is still drawing on its Silicon Valley roots to stay ahead of traditional TV and movie studios.
The Los Gatos, California-based company, located more than 300 miles from Hollywood, often reaches into its technological toolbox without viewers even realizing it. It often uses just a few subtle twists of the dial on viewer recommendations to keep its 270 million global subscribers happy at a time when most of its streaming rivals are seeing waves of cancellations from inflation-weary subscribers.
Even as hit TV series like “The Crown” or “Bridgerton” have broad appeal, Netflix is still trying to cater to the diverse tastes of its vast audience. Part of that recipe involves tailoring recaps and trailers across the range of shows to suit each viewer’s personal interests.
So someone who enjoys romance might see a plot summary or video trailer for “The Crown” that highlights the relationship between Princess Diana and Charles, while another viewer more interested in political intrigue will see a clip of Queen Elizabeth during a meeting with Margaret Thatcher.
For an Oscar-nominated film like “Nyad,” an action fan might see a trailer of the title character submerged in water during one of her epic swims, while a comedy fan might see a light-hearted scene with some amusing banter between the two stars. , Annette Bening and Jodie Foster.
Netflix is able to create these variations because of the deep insight into viewing habits it gains from collecting data from subscribers’ histories with its service – including that of customers who signed up in the late 1990s when the company launched a DVD-by-mail service that continued to operate until September last year.
“It’s definitely a secret sauce for us,” Netflix Chief Product Officer Eunice Kim said as she discussed the nuances of the ways Netflix tries to convince different viewers to watch different shows. “The North Star we have every day is keeping people engaged, but also making sure they are incredibly satisfied with their viewing experiences.”
As part of that effort, Netflix is introducing a new homepage design that greets subscribers when they view the streaming service on a TV screen. The changes are intended to package any information that might appeal to a subscriber’s tastes into a more concise format to reduce the “gymnastics with their eyes,” said Patrick Flemming, Netflix’s senior director of member product.
What Netflix does with its previews may seem like a small thing, but it can make a big difference, especially as people looking to save money start to winnow the number of streaming services they have.
Last year, video streaming services were collectively suspended by about 140 million account cancellations, a 35% increase from 2022 and nearly tripling the volume in 2020, as the COVID-19 pandemic created a surge in demand for entertainment from people cooped up at home , as figures show. compiled by research agency Antenna.
Netflix doesn’t disclose its cancellation or churn rates, but last year its streaming service added 30 million subscribers — marking the second-largest annual increase after its own growth spurt during the 2020 pandemic lockdowns.
Some of last year’s subscription growth stemmed from a crackdown on viewers who poached Netflix subscribers who shared their account passwords. But the company also benefits from technological know-how that helps it direct shows to customers who like them and make them think the service is worth the money, said J. Christopher Hamilton, assistant professor of television, radio and television . film at Syracuse University.
“What they’ve done is quite ingenious and very, very strategic,” Hamilton said. “They are definitely ahead of the traditional media companies that are trying to do some of the same things but just don’t have the level of sophistication, experience or history of the data in their archives.”
Netflix’s nerdy legacy was once mocked by an entertainment industry that looked down on the company’s nerddom.
“It’s a bit like asking: will the Albanian army take over the world?” Former Time Warner CEO Jeff Bewkes said about Netflix during a 2010 interview after being asked about the threat Netflix posed at the time.
Not long after, Netflix began mining its viewership data to figure out how to produce a slate of original programming that would attract more subscribers — an ambitious expansion that forced Time Warner (now rolled into Warner Bros. Discovery) and other long-time entertainment companies like Walt Disney Co. in a mad scramble to build their own streaming services.
While these expansions initially attracted hordes of subscribers, they also resulted in massive losses that have resulted in management shakeups and drastic budget cuts, including the abrupt closure of a CNN streaming service.
What Netflix is doing with technology to retain subscribers and thus grow its fortunes (the company’s profits rose 20% to $5.4 billion last year) is now widening the divide, with rival services still trying to pare their losses.
Disney’s four-year-old streaming service recently became profitable after an overhaul by CEO Bob Iger, but he thinks more work will be needed to overtake Netflix.
“We need to be at their level in terms of technological capabilities,” Iger said at a conference earlier this year. “We’re creating and developing all that technology now, and obviously Netflix is the gold standard.”
Netflix isn’t going to help its rivals by giving away its secrets, but the slicing and dicing generally starts with gaining insight into which viewers tend to gravitate towards certain genres – the broad categories include action, adventure, anime, fantasy, drama, horror, comedy, romance and documentary – and dive deeper from there.
In some cases, Netflix’s technology will even attempt to determine a viewer’s mood at a given moment by analyzing which titles are being viewed or clicked on. In other cases, it’s relatively easy for the technology to figure out how to make a movie or TV show as compelling as possible for specific viewers. If Netflix’s data shows that a subscriber has been watching a lot of Hindi productions, it would almost be a no-brainer to show clips of Bollywood actress Alia Bhatt in a role she played in the American film ‘Heart of Stone ‘ instead of starring in the film. actress Gal Gadot.
“We want to do a really good job of putting the things you prefer in front of you,” Kim said. “Some of that is the content recommendations themselves, but it’s also about how we present the content to you.”
