LOS GATOS, California – Although your video streaming service Shines with a Hollywood glow, Netflix still has its roots in Silicon Valley to stay one step ahead of traditional TV and film studios.
The Los Gatos, Calif., company, headquartered more than 300 miles from Hollywood, often taps into its technological toolbox without viewers even realizing it. It often uses just a few subtle tweaks to the viewer recommendations buttons to help keep its 270 million subscribers worldwide pleased at a time when most of its streaming rivals are seeing waves of cancellations from inflation-weary subscribers.
Even when hit TV series like “The crown” or “Bridgerton” have wide appeal, Netflix is still trying to cater to the divergent tastes of its vast audience. A portion of that revenue includes customized summaries and trailers about its smorgasbord of shows to suit each viewer’s personal interests.
Therefore, someone who enjoys romance might view a plot summary or video trailer for “The Crown” highlighting the relationship between Princess Diana and Charleswhile another viewer more interested in political intrigue might see a clip of Queen Elizabeth meeting Margaret Thatcher.
For an Oscar-nominated film like “Nyad,” an action lover can see a trailer of the title character immersed in the water during one of his epic dives, while a comedy fan can see a light-hearted scene with some fun banter between the two stars, Annette Bening and Jodie Foster.
Netflix is able to derive these variations through the deep understanding of viewing habits it gains by analyzing historical data from subscribers to its service – including those from customers who signed up in the late 1990s, when the company launched a DVD-by-mail service that continued to operate until last September.
“It’s a secret sauce for us, without a doubt,” said Eunice Kim, Netflix’s chief product officer, when discussing the nuances of the ways Netflix tries to attract different viewers to watch different shows. “The North Star we have every day is keeping people engaged, but also making sure they are incredibly satisfied with their viewing experience.”
As part of this effort, Netflix is rolling out a redesign of the home page that greets subscribers when they watch the streaming service on their TV screen. The changes are intended to package all the information that might appeal to a subscriber’s taste in a more concise format to reduce “eye gymnastics,” said Patrick Flemming, senior director of membership products at Netflix.
What Netflix is doing with its previews may seem like a small thing, but it could make a huge difference, especially as people looking to save money start to cut back on the number of streaming services they own.
Last year, video streaming services collectively suffered around 140 million account cancellations, a 35% increase from 2022 and nearly triple the volume of 2020, when the COVID-19 pandemic created a boom in demand for entertainment by people trapped at home. according to numbers compiled by research company Antenna.
Netflix doesn’t disclose its cancellation or churn rate, but last year its streaming service gained 30 million subscribers — marking its second-largest annual increase, behind its own growth spurt during 2020’s pandemic lockdowns.
Some of last year’s subscription growth flowed of repression in viewers who took advantage of Netflix subscribers sharing their account passwords. But the company is also benefiting from technological expertise that helps it continue to funnel shows to customers who like them and make them think the service is worth the money they spent, according to J. Christopher Hamilton, assistant professor of television, radio and television. film at Syracuse University.
“What they have done is quite ingenious and very, very strategic,” Hamilton said. “They are definitely ahead of traditional media companies that are trying to do some of the same things, but just don’t have the level of sophistication, experience or the history of the data in their archives.”
Netflix’s geek heritage was once ridiculed by an entertainment industry that looked down on the company’s geek world.
“It’s a bit like, is the Albanian army going to take over the world?” Former Time Warner CEO Jeff Bewkes said about Netflix during a 2010 interview after being asked about the threat Netflix posed at the time.
Not long after that criticism, Netflix began mining its viewing data to figure out how to produce a slate of original programming that would attract more subscribers — an ambitious expansion that forced Time Warner (now merged into Warner Bros. Discovery) and other longtime entertainment companies like Walt Disney Co. in a mad scramble to build their own streaming services.
While these expansions initially attracted hordes of subscribers, they also resulted in massive losses that resulted in management changes and drastic cutbacks, including the abrupt shutdown of a CNN streaming service.
What Netflix is doing with technology to retain subscribers and grow its fortune – the company’s profit increased 20% to $5.4 billion last year – it is now widening the divide, with rival services still trying to stop their losses.
Disney’s 4-year-old streaming service recently became profitable after an overhaul engineered by CEO Bob Igerbut he thinks more work will be needed to keep up with Netflix.
“We need to be at their level in terms of technological capability,” Iger said at a conference earlier this year. “We’re now in the process of creating and developing all of this technology, and obviously the gold standard is Netflix.”
Netflix isn’t going to help its rivals by divulging its secrets, but slicing and dicing often starts with understanding which viewers tend to gravitate to certain genres – broad categories include action, adventure, anime, fantasy, drama, horror, comedy, novel and documentary – and then dive deeper from there.
In some cases, Netflix’s technology will even try to guess the viewer’s mood at any given time by analyzing which titles are being browsed or clicked on. In other cases, it’s relatively easy for technology to figure out how to make a movie or TV series as appealing as possible to specific viewers. If Netflix’s data shows that a subscriber has watched a lot of Hindi productions, it would almost be a no-brainer to feature clips of Bollywood actress Alia Bhatt in a role she played in the American film “Heart of Stone” rather than the film’s protagonist. actress, Gal Gadot.
“We want to do a great job of putting the things you prefer in front of you,” Kim said. “Part of this is the content recommendations themselves, but it’s also about how we present the content to you.”
This story originally appeared on ABCNews.go.com read the full story
