Courtesy of the paradigm shift in technology, many online streaming companies like Netflix use big data and other technological upgrades to enhance viewership and customer experience.
Netflix is undoubtedly the most popular entertainment streaming platform, valued at over $164 billion, surpassing Disney. However, one of the most significant reasons behind Netflix’s success is the customer retention rate of 93 percent, which is an exception. On the contrary, Amazon Prime has a retention rate of 75 percent, while Hulu has around 64 percent.
Read along to learn how Netflix deploys the latest technologies to retain around 151 million global subscribers.
Netflix Big Technological Upgrades to Increase Viewers
Before discussing technological upgrades, let’s briefly understand the three prime factors behind Netflix’s success:
- Enhancement in streaming capabilities
- Availability of streaming platforms on different devices, such as tablets, tablets, and smart TVs.
- Continuous improvement in viewing taste due to the above two reasons.
Scalable Business Model
We all know that Netflix didn’t start the business as a streaming service; instead, it offered an on-demand DVD delivery business. However, only after the enhancements in Internet speed with different wireless technologies did Netflix create an online streaming platform for entertainment lovers.
Netflix started its operations within the US when people started watching movies online. However, as the Internet connectivity speed improved worldwide and technologies enable Netflix regional unblocking, Netflix expanded its operations to attract international customers.
Furthermore, Netflix focused on making the online platform compatible as the manufacturers started designing more smart devices, tablets, iPhones, iPods, smart TVs, firesticks, etc.
Netflix ensures easy-to-understand and straightforward pricing plans allowing the subscribers to set up an account within minutes. For instance, you can select any three plans with only a 20 percent difference with customized add-ons. Moreover, the users can always upgrade or downgrade the plan without any complex procedure.
Netflix and Big Data Analytics
Netflix uses 10 percent, which translates to $900 million in research and development. Furthermore, Netflix deploys big analytics models to collect the data of its hundreds of millions of subscribers to analyze customer behavior, liking, and subscription patterns. Hence, the streaming company uses this valuable information to recommend the moves and shows based on the viewers’ preferences.
For instance, more than 75 percent of the viewer activity depends on personalized recommendations. Not only that, but Netflix also collects multiple data points to create a detailed profile of the subscribers.
Netflix collects the response data and customer interaction for different TV shows and movies. As a result, Netflix knows exactly the time and the type of content a particular customer is watching on which device. When you pause a movie, switch to another show, add programs to the list, and rate the show, these are data points for Netflix’s big data analytics.
However, it’s not just about collecting billions of data records; instead, the success lies in carefully analyzing the data to convert it into meaningful insights.
As a result, the accurate recommendation mechanism of Netflix is responsible for a higher customer retention rate. One may wonder how idd Netflix knew that ‘Orange Is the New Black” would be a great hit. It’s because Jenji’s Kohan’s “Weeds” garnered a considerable viewership resulting in significant subscriber engagement.
If you watch shows with women as the main character, Netflix starts presenting you with different movie options with female leads. The same rule applies when watching anime, thriller movies, and documentaries.
In addition to customer retention and engagement, Netflix uses big data analytics for custom marketing. For example, Netflix cut over more than ten different versions of “The House of Cards” trailer to promote the season among the subscribers.
In addition to collecting online data, Netflix values customer feedback and encourages them to rate the shows by including options such as like (thumbs up), dislike (thumbs down), and love this (two thumbs up).
This feedback enables Netflix to personalize the main dashboard to increase the customer experience. Joris Evers, Director of Global Communication, says that there are around 33 million different Netflix versions.
Content is the King
No online streaming platform can beat the content available on Netflix. For instance, the UK Netflix library offers more than 8,700 titles, while American Netflix is the largest online entertainment repository.
Furthermore, Netflix directly distributes the original content via the streaming service without involving any middleman. As a result, Netflix efficiently scales the existing platform’s capabilities to reach a global audience.
We live in a digital era where big data and analytics make or break a business model. Netflix smartly utilizes customer insights to retain customers, improve the viewer experience, and maximize return on investment (ROI).
Follow TechStrange for more Technology, Business, and Digital Marketing News.