Netflix eventually wants to be able to understand its customers so well that it can match shows to their mood as the streaming service looks to own the so-called ‘binge era’ it arguably started.
A/B testing has been a core if closely guarded element of Netflix’s rise to prominence over the last eight years. It’s constantly testing what’s working for consumers in a bid to streamline the viewing experience as much as possible so that consumers are more comfortable having that level of personalisation at a time when they’re warier of what corporations are doing with their data.
Eventually, this will mean knowing what people want to watch based on how they’re feeling, said chief executive and co-founder Reed Hastings during his CES keynote. “We seek to find the right movie or series to put in front of you at the right time. We do this through continuous learning and understanding what each person watches and whether they leave after ten minutes or whether they come back to complete the series or not
"Every year the business does “hundreds of A/B tests to refine what each person watches, Hastings added. This includes different variations of the look and feel of its interface and features like automatic voice commands, which will allow it to “one day get so good at suggestions that we’ll able to suggest exactly the right film or TV show for you when you turn Netflix.”
That level of personalisation and customer insight will be pivotal in the company’s transition from media distributor to media owner. It’s cheaper for Netflix to produce its own content underpinned by its own customer data than it is to fork out huge sums to license high profile shows and so consequently the distribution service is becoming a media owner in its own right. And with the likes of Idris Elba, Donnie Yen, Brad Pitt and Will Arnett already signed up to shows and films, Hastings' plan is starting to take shape and causing further disruption as a result.
“The technology is there, it’s just the business models that stand away,” said Netflix content chief Ted Sarandos at the same event. “It’s why Netflix decided to move into original programming in 2013 with House of Cards…. linear TV must aggregate a large audience at any given time of day and hope whatever it is they’re selling will attract enough viewers. That’s not the case with Netflix and it means we can spend less on marketing and spend more on content that traditionally wouldn’t usually be commissioned.”
It’s worth noting how much of Netflix’s growth has been – and is still – dependent on the proliferation of faster broadband around the world, improved payment services and shrewd deals to have the service pre-installed on various televisions. All three aspects regularly cropped up during both Hastings and Sarandos’ speeches, which both linked the impact they’re having on accelerating the “binge era” of premium content.
“You are witnessing the birth of a global TV network,” boasted Netflix’s boss, who went on to announce a 130 new countries for Netflix (6 January), including Nigeria and India, pushing its total number up to nearly 200.
“We dream of the day when the internet will enable us to deliver TV shows and movies to the billions of people all over the planet,” added Hastings. It means Netflix is live in nearly every country of the world but China (where it hopes to be in the future). "