Commentary: How does Netflix attract viewers? It claims it has a “secret” – The Nation | Globalnews.ca

Although its video streaming service Hollywood Still, Netflix remains rooted in Silicon Valley, keeping it ahead of traditional TV and movie studios.

The Los Gatos, California-based company, more than 300 miles from Hollywood, often uses its technology toolbox without viewers realizing it. It often makes only subtle adjustments to viewer-recommended knobs to help keep its 270 million global subscribers happy at a time when most of its stream media Rivals are facing a surge in subscriber cancellations over concerns about inflation.

Even with the popularity of hit TV series like The Crown or Bridgerton, Netflix Still, attempts are made to cater to the different tastes of a broad audience. One of these is to tailor program summaries and trailers to each viewer's individual interests.

So viewers who enjoy romance might see a synopsis or video trailer for The Crown that focuses on the relationship between Princess Diana and Charles, while viewers interested in political intrigue might see a clip of Queen Elizabeth meeting Margaret Thatcher.

For an Oscar-nominated film like Nyad, action fans might see the trailer showing the main characters taking a dip in water during an epic swim, while comedy fans might see a lighthearted scene featuring some hilarious banter between the two stars, Annette Bening and Jodie Foster.

Netflix was able to make the changes because it has gained deep insights into its subscribers' viewing habits by analyzing their historical data — including the habits of customers who signed up when the company launched its DVD-by-mail service in the late 1990s, which it operated until last September.

“That’s definitely our secret sauce,” said Netflix Chief Product Officer Eunice Kim, discussing the nuances of how Netflix attracts different audiences to different shows. “Our goal every day is to keep people engaged, but also to make sure they’re very satisfied with their viewing experience.”

As part of that effort, Netflix is ​​redesigning the homepage that greets users as they watch the streaming service on their TV screens. Patrick Flemming, Netflix's senior director of membership products, said the changes are designed to package all the information that might suit a user's taste in a more concise format to reduce “eye strain.”

The change Netflix is ​​making to previews may seem like a small thing, but it could have a big impact, especially as people start cutting back on the number of streaming services they use in order to save money.

Video streaming services canceled a total of about 140 million accounts last year, up 35% from 2022 and nearly triple the rate in 2020, when the COVID-19 pandemic sparked a surge in demand for at-home entertainment, according to data compiled by research firm Antenna.

Netflix doesn't disclose its cancellation or churn rates, but its streaming service added 30 million subscribers last year, its second-largest annual gain after growth during the 2020 pandemic lockdown.

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Netflix cracks down on password sharing

Part of the reason for last year’s subscription growth is that Netflix has cracked down on viewers who charge Netflix users who share their account passwords for free. But the company also benefits from technical know-how that helps it keep pushing shows to customers who like them and make the service worth their money, said J. Christopher Hamilton, an assistant professor of television, radio and film at Syracuse University.

“They’re doing it in a very smart and very strategic way,” Hamilton said. “They’re absolutely ahead of the traditional media companies that are trying to do the same thing, but just without the sophistication, the experience, and the history of data in their archives.”

Netflix's nerdy heritage was once mocked by the entertainment industry, which looked down on the company's nerdiness.

“It’s a little like, is the Albanian army going to take over the world?” Jeff Bewkes, former Time Warner CEO, said in a 2010 interview when asked about the threat Netflix posed at the time.

Soon after that putdown, Netflix began mining its viewing data to figure out how to create a slate of original programming to attract more subscribers — an ambitious expansion plan that sent Time Warner (now part of Warner Bros. Discovery) and other established entertainment companies like the Walt Disney Co. scrambling to build their own streaming services.

While those expansions initially attracted a large number of subscribers, they also resulted in huge losses, triggering management changes and major cuts, including the abrupt closure of CNN's streaming service.

Netflix is ​​using technology to retain subscribers and grow its fortunes (profits grew 20% to $5.4 billion last year), but now competitors are struggling to stem losses, leading to a growing gap.

Disney’s four-year-old streaming service recently turned profitable following a revamp orchestrated by Chief Executive Officer Bob Iger, but he believes more work needs to be done to catch up to Netflix.

“We need to get to their level in terms of technical capabilities,” Iger said at a conference earlier this year. “We’re creating and developing all this technology right now, and obviously Netflix is ​​the gold standard in this regard.”

Netflix won't help its competitors by giving away its secrets, but analytics usually start by looking at what genres viewers gravitate toward — broad categories include action, adventure, anime, fantasy, drama, horror, comedy, romance and documentary — before diving deeper.

In some cases, Netflix’s technology even predicts what mood a viewer will be in at a given time by analyzing what they’re viewing or clicking on. In other cases, it’s relatively easy for the technology to figure out how to make a movie or TV show as appealing as possible to a particular audience. If Netflix’s data shows that subscribers watch a lot of Hindi productions, it’s almost a given that it’s better to show a clip of Bollywood actress Alia Bhatt playing a character in the American film Hearts of Stone instead of the film’s lead actress Gal Gadot.

“We want to put the stuff you like in front of you really well,” King said. “Part of that is the content recommendations themselves, but also how we present that content to you.”