Netflix as the Main Original Content Creator
While Netflix has not yet fundamentally altered the face of television, it has certainly expanded
the definition by offering creators a new playground in which to experiment and by pushing
the boundaries of what is considered commonplace. Since its inception, Netflix has been
changing the ways that viewers access, control, and watch television. Founded in 1997 by Recd
Hastings and Marc Randolph, Netflix began as a mail order DVD service. Instead of going to
a local store like Blockbuster, Netflix delivered entertainment right to your door. While
Blockbuster offered customers the ability to obtain new releases on demand, Netflix capitalized
on a separate, undervalued part of the market. By appealing to the desires of customers who
didn't need their movics immediatcly but would prefer the convenience of delivery and the cost
effectiveness the company provided in comparison to Blockbuster, Netflix carved out its own
share of the in-home entertainment market. Fast-forward two decades later, and Netflix is now
a 2lst-century staple. Ten years after delivering its billionth DVD, Netflix expanded into
internet video-on-demand, which offered a revolutionary way of watching TV (CITE). Instead
of airing episodes weckly, viewers could consume an entire season in one sitting. which has
come to be understood as binge-watching.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
However, while they were doing exceptionally well at the time, they quickly realized the
limitations of the design of their platform. Because none of the content they were streaming
belonged to Netflix, they were paying the original network for cach show and movie, and there
was no guarantee that they would have the rights to stream everything forever. One prominent,
recent examole of this is The Office, which used to be avai able on Netilix. but the liberties
have recently been taken away, and now it can only be streamed on Hulu In response to this
curb, Netflix expanded from just a streaming platform to becoming the creator of original
content.
The first attempt was the Netflix original series House of Cards", which passed with flying
colors. This success was of no surprise to the company, as the show was entirely created out of
data that indicated there would be a consistent, loyal audience for it. As suggested by this
example, much of Netflixs success derives from its ability to leverage big data. Before
streaming services like Netflix, networks had a monopoly on television. In the words of Kevin
Reilly, former chairman of Fox News, "if you wanted to do television, you were coming to
network television first' (SSS: BDFE). Networks were the golden ticket to success. But the
advent of Netflix allowed creators to sidestep the control and restrictions imposed by networks.
Traditional television, which refers to lincar platforms such as broadcast networks, basic cable
channels, and premium cable networks, had to comply with specific rules and regulations.
These lincar platforms are restricting because their shows are distributed, often weekly, through
time slots on a live schedule. Broadcasters are limited to a standard broadcast schedule that
meets the needs of all of thair vicers; thus, they cannot play 13 hours worth of one show as that
would crowd out all of the network's other programming for the day (SSS: BDFE). Structurally,
television shows have to fit into precise 22-or 44-minute chunks, depending on whether the
show will be broadcast in a 30-minute or 60-minute slot (CITE). Within those slots, the writer
has to build in time to refresh viewers of plot clements from previous episodes aired a weck
prior, as well as time in the middle for commercials. Lastly, they also need to include mini cliff-
hangers to keep the audience on edge so they will be back for next wook's opisode (SSS:
BDFE). But before writers can even make it to this stage, they are required to have their pilot
episodes approved. Television networks rely on pilot episodes to determine whether there is an
audience for a show. Creating a pilot episode is not casy, not only are they expensive, but they
also require the writers to introduce and develop the show's characters, plot clements, and story
arc in a 30-or 60-minute broadcast time slot (SSS: BDFE). If the network likes the pilot, they
might initially order six to twelve episodes, but even then, there's no guarantee that the series
will go any further. The networks maintain control over shows, giving the creator's little
creative liberty, and if the show does not succeed off the bat, then they have no problem cutting
it off.
Recently, Netflix conducted a study using its data to detail how long it takes audiences to get
hooked to different shows. Certain shows, such as 'Breaking Bad', have a majority of its viewers
hooked after two episodes, while Arrow took around eight episodes to get the same results. If
Arrow was only given the chance to succeed in six episodes, it would not have made the cut,
which represents a crushing blow for the manner in which Network Television packages its
product; not a single show's hook point was its pilot. These statistics suggest that networks'
dependence on pilots to predict a show's future success can be a risky process, and that
streaming services have a unique edge with viewers because of their ability to disseminate
entire shows at once.
It is also important to note that not all content is created equally. Not only arc Network
television writers and producers limited by time constraints they are also regulated in terms of
the actual substance of their shows. Scries that air on cable television are hold to traditional
censorship guidclines, while content that streams online is, for all intents and purposes, a free
for all. Streamed content may expose viewers to an explicit nudity or a gory bloody battic at
any moment and it can be this risqué touch that draws us in. As the number of avenues for
programming has grown, croators have several distribution options, each offering varying
degrees of creative freedom and autonomy. Programs aired on TV are regulated by industrial,
organizational, and commercial factors that have a substantial impact on artistic frocdom. The
FCC has long rogulated broadcast tolevision, consoring any content it determinos to be
obscenc, indecent, and profano. Although the Television Code of tho National Association of
Broadcastors has boon dissolved, much of their regulations are set (such as tho prohibition of
profanity, drunkenness, and the irreverent portrayal of God), and continue to porsist within the
notworks individual standards and practices dopartments, limiting to this day what can and
cannot be shown on broadcast tolevision. In 1996, government prossures resulted in the
establishment of a content rating system, which grouped programs into catogories that ranged
from TV-Y (appropriate for all chilcron) to TV-MA (mature audiences only). Basic cablo,
which is not subject to regulation from the FCC, is still restrained by guidclines and
expectations.
Netflix, free of commercials and regulation, allows and even encourages nudity, profanity, and
violence, often using these attributes as a way of differentiating itself from broadcast and basic
cable. One component of streaming services branding is their tendency to push boundaries in
ways that other networks cannot Netflix's approach to programming is to give virtually free
reign to creators. Across broadcast, cable, and streaming, each network approaches the
production of a series in a way that is unique to the preferences and priorities of that individual
service (CITE). These methods and practices can have varying implications on the creative
froedoms of their respoctive programs. Furthermoro, no-ad breaks and bingo-watching
capabilitics aren't just making TV more convenient; they ro changing the ways tolevision's
stories are told. Allowing vicwers to watch one episode after the next with no interruption has
given writers the liberty to do much more with their stories. With more time to sparo, writers
can devolop characters on a dooper level, leaving viewers hooked long after they watch the last
cpisodo. Additionally, writers don't have to worry about building up suspense before and after
commercial broaks, but rather they got to leave their cliff-hangers for the last few seconds of
the episode, tempting the viewer to continue watching the next episode, and the next, and the
next. Becauso vicwers can watch one episode after another, a higher degree of narrative
complexity is achievable
Additionally, not every show has to appeal to every subscriber. Because Netflix provides an
on- demand streaming platform with a library of a plethora of different options, it can risk
offending individual subscribers with the content in some of those options (SSS: BDFE). In the
world of broadcast networks, you can deliver only one show at a time to your audience, so that
show theoretically has to appeal to as many viewers as possible. Conversely, if a Netflix
subscriber is turned off by a gruesome scene or an inappropriate comment, he or she can 'choose
from more than 100,000 hours of other Netflix content (SSS: BDFE). To build its subscriber
network, Netflix makes use of the long tail theory by diversifying its portfolio and licensing a
huge library of content that targets niche demands. Because of the wide array of options, each
show can have more specialized markets with a distinct voice and a loyal fan-base instead of
mass appeal. For decades, the Big Three broadcast networks, ABC, CBS, and NBC, dominated
American television. During their reign, television was a mass medium; most programs aimed
to appeal to the entire television audience. As the gamut of entertainment outlets has expanded,
and barriers to entry have dwindled, the ways in which television audiences are divided, as well
as how scripted series are created, distributed, and received has drastically changed.
Consequently, Netflix commissions and delivers its scripted series to many different small-but-
loyal audiences. Netflix's head of original content Cindy Holland stated, "I don't think any
genres are off-limits to us. We have a large subscriber base that consumes a wide variety of
content...We hope to reach the entire subscriber base with at least one original series". Ted
Sarandos, Chief Content Officer of the company, advances this concept of a boundless brand
identity by insisting. I'm not looking to find a single show to define Netflix. Thats almost the
opposite of what we're trying to do. Our brand is all about personalization.
The goal is not to target one audience or one interest, but to allow each individual user to have
the experience that he or she wants. As a result of taking place entirely on the Internet, Netflix
streaming collects every viewing habit of a viewer and uses this online cata to create the
ultimate viewing experience. Utilizing data, Netflix has pushed this idea of personalization to
the next level. Consumers want products that are easy to use and tailored to fit their personal
preferences. Unlike the media moguis of the traditional entertainment industry dictating
national tastes, with Netflix, the consumer is deciding "what they want, when they want it, and
how they want it just by using the platform. The more you watch, the more Netflix learns your
tastes (Mcconnell, Jos: Windsor, Ont). Netflix uses "what people watch, when they watch, how
much do they watch, what time of day, on what device, what they watch (before or after) and
on what profile" in order to determine what content to put in front of what person at what time
(Mcconnell, Jos: Windsor, Ont). Instead of relying on the general preferences of even the
metrics people might choose, Netflix relies on the behavioral choices of users. While one might
explain themselves as being an action film junkie, if he or she watches The Notebook 5 times
in one week, how much value does that statement hold?. Based on these viewing patterns,
'everything is a recommendation. Each individual has his or her own profile highlighting shows
already watched as well as recommendations based on these preferences. Essentially, each
person has a TV channel created just for him or her; no two Netflix profiles are the same.
Netflix is, quite literally, a continuously learning machine. Not only has this data been integral
in creating ideal user profiles, but it has also contributed to the success of original content by
providing insight into what works and what does not in a show, so that they can continuously
iterate within their constant cycles of content publishing.
Traditional entertainment authorities do not have the luxury of a direct rolationship with their
consumers. Nielsen ratings provide incumbent television networks with the general
characteristics of viewers from company estimates and other surveys, but they rarely know
who their viewers are as individuals; even if they do, there is no casy way for them to promote
content directly to those consumers (SSS: BDFE). The closest networks can get to offectively
targeting an audience for a new show is to promote it alongside a similar established show
(SSS: BDFE). Sinco 1950, The Nielsen Company, a marketing research firm, has been
measuring television audiences and tracking progressions in viewership over time.
Programmers and advertisers have been using Nielsen ratings for decades to evaluate their
successes and failures, as well as to observo significant trends and phenomena. However, as
new technologies have emerged and viewing chavior has evolved, through concopts such as
time-shifting and mobile viewing, a single airing is no longer representative of a show's actual
audience size. Insteal, traditional entertainment authorities' decisions are based on long-
established patterns rather than direct insight, and typically, these conventions load to
unfavorable choices.
One characteristic that separates Netflix and other streaming services from traditional
television outlets is that their series are delivered exclusively over the Internet, giving
streaming networks access to vast amounts of data on viewing behaviors and trends that can be
used to inform programming decisions. Because other networks rely on third-party platforms
for mass distribution, they do not have the same level of access to data collection. In 2013,
Netflix became the first streaming service to be nominated and win a Primetime Emmy Award
for its web-only original series, House of Cards. This consequently shook up of the
entertainment industry, but this win came as no surprise to the company. Before even seeing a
single episode of House of Cards, Netflix committed to two seasons-or 26 episodes-of the
show. They did so without hesitation, claiming, "We know what people watch on Netflix, and
we're able with a high degroc of confidence to understand how big a likely audience is for a
given show based on people's viewing habits". Netflix originals are not tailored to a
demographic the way Network TV operates, but rather are based around what you supposedly
want. So, if you're not happy with the most recent series of Orange Is The New Black, then
arguably, you've only got yourself to blame really.
The key to streaming success is identifying ovcrlapping patterns of data Utilizing data, analysts
can identify whether audiences might exist for a combination of a producer, their writing style,
a particular genre, specific cast, or some other trait of the show. It is not a matter of mercly
identifying people who have watched a specific show or enjoy a particular actor, but rather 'to
figure out what everybody who liked 'Benjamin Button', 'Seven', 'Fight Club' and 'Social
Network has in common. It's that they love David Fincher's stylc of storytelling You look at
Kevin Spaccy fans, and then you say, "How about people who love political thrillers?' We went
back and pulled all the political thrillers people have watched and rated highly. So you've got
all those populations, and right, where they overlap in the middle, is the low-hanging fruit. If
we can got the show in front of these peoplo, they will watch it and love it. (NETFLIX PRIZE).
Big data has not only helped shape content to embody audience preferences, but it has also
informed the most effective means for marketing this content. Once Notflix has Icarnod
customers' preferences, they market products directly to customers on tho basis of this data,
giving thom a distinct odgo over notworks that raly on drawn out timescales and third party
insights. Not only can Notflix directly moasure the effectiveness of different promotional
strategios, they can also design specific promotional campaigns for difforent types of
customors (SSS: BDFE). For examplo, bafora relcasing 'Housc of Cards, they croated multiplo
trailers for the show. Onc foatured Kovin Spaccy (for subscribars who had likes Spaccy's
movies); another foatured the shows fomale charactors (for subscribers who looks movies with
strong fmalc loads); yot another focused on the cinematic nuances of the show (for subscribers
who had likod Fincher's movics) to ensure they attracted all possible target audiences. Through
their inhorent floxibility, control of their content, and innovations in the viewer experience,
Notflix has carved out a more than significant stake in television and movic consumption.
While there will likaly always be a sect of the market that yarns for the classic movic theatre
experience or genuincly enjoys having their Tuesday nights dedicated to their favorite show,
Notflix has provided a much sought after outlet for those who prefer refreshing, personalized
content viewed on their own schedule
Having evolved in a near parallel manner to their clientele's demands, Netflix has been able to
keep up and at times outpace competitors and their own viewers, which explains much of how
and why they have seen continued growth over the past decade despite turning the company s
mission statement on its head. While the market will continue to evolve with the introductions
of new streaming services and innovations in the market, Netflix will almost certainly be right
in step with its new competition, as it is important to remember that Netflix's success is not
predicated on capitalizing on any singular trend, but rather on their ability to effectively adapt
and iterate continuously. For these reasons, it is hard to foresee a scenario in the near future in
which Netflix is overrun or outdone by any one competitor. More often than not, it is Netflix
setting the tone for the competition.
