Netflix betting Big data: dream of becoming a streaming home theater

Beijing time, November 30, Wired Magazine Network edition recently published article said, streaming video service provider Netflix is betting on big data, dream of becoming the next generation of HBO television network, without having their subscribers subscribe to cable TV services. The article points out that Netflix is using data mining and algorithms to provide an advantage because it has a huge dataset of 29 million subscribers ' viewing habits and preferences.

The following is the full text of this article:

Ride Hastings (Reed Hastings) has a dream. In fact, it should be said to be an obsession. The Netflix chief executive wants his streaming video service to be the next-generation HBO network (the American Home Theater channel), but can dispense with the hassle of subscribing to cable TV services. This is a bold plan, and if Netflix really completes the project, it will change the way people watch TV.

Netflix is trying to get the "legacy" of home theater original content, and its first exclusive series, "Lillyhammer", was published in January 2012. In addition, the popular sitcom "Stunted Development" (arrested Development) is also recovering, and is being played out exclusively on Netflix. In addition, the original drama "The House of Cards" starring Kevin Speci (Kevin Spacey) will be premiered early next year, directed by the famous director Fincher (David Fincher).

At the start of Netflix, the company was targeted at people who were too lazy to return rental discs to physical video stores, and often had to pay late fees. For such a company, the dream of becoming the next generation of HBO networks is certainly a big news. Instead of using exclusive content to compete head-on with the established cable networks, Netflix wants to take advantage of what is missing from traditional television networks, which is a perception of people's habits and preferences. Netflix knows what audiences like to see and bets on algorithms that help them determine which episodes will become popular episodes.

In addition, by delivering a full season of episodes, the company will put all its rights into the hands of the audience, potentially subverting the "event TV" model.

However, getting original content or vacation content with "pocketed full" or ensuring that its network can handle weekend streaming media playback is two different things. However, Netflix still believes it needs original content to maintain its leading position in streaming video to meet the challenges from Amazon, Vudu and even HBO go. Netflix wants to be the first real television network in the Internet arena.

To achieve this goal, Netflix would be better off moving faster.

Netflix's share of the streaming media peak download market is now 33%, according to data released by the network traffic tracking agency Sandvine, and the closest competitor is Amazon, which accounts for only 1.8%. This is a pleasant lead for Netflix, but even Hastings has come to realize that the company must make itself a provider that distinguishes itself from other streaming video-playback service providers to keep its lead.

"If we can do our job well, there will always be a reason to be a Netflix member, both on the original side and on the authorization side," he said. Hastings in the third quarter earnings conference call.

To get people excited about their original content, Netflix needs a "blockbuster" and the company's "Gold Rush" is different from the traditional cable TV network. TV dramas like The Walking Dead are "just out of the gate" and rage, as The X-Files are becoming more and more popular as the series matures. Netflix, like all television networks, wants to get a series of popular episodes, but unlike other television networks, Netflix has not taken a lot of content, hoping some of it will resonate with the audience. Instead, it uses a huge dataset of 29 million subscribers ' viewing habits and preferences.

Traditionally, cable networks are ordering on the basis of what appears to be "experimental", while Netflix has ordered two complete episodes of the Solitaire (a total of 26 episodes), but has not seen a picture of the show. It has been reported that Netflix has won the premiere of the show for more than $100 million, defeating HBO and AMC because of its full belief that the TV series will become a "blockbuster".

Why is Netflix so sure? The reason is that the company is using data mining and algorithms to provide an advantage for itself. Netflix knows how many people are watching Spacey and Finch's films, and how many people like to watch political thrillers. If the audience is big enough, it would make sense to get the exclusive premiere of the card house.

"We know what people are watching on Netflix, and according to people's viewing habits, we have the ability to understand how big the audience for a given episode is likely to be, and to have a high degree of confidence in us." "said Jonathan Friedland, head of Netflix communications," Jonathan Friedland. "We want to continue to provide content for all." As time goes on, we are becoming more and more adept at selecting content and bringing greater audience participation. ”

All these comments about data mining and algorithms sound impressive, and this is likely to make a big difference in Hollywood. But Stephen Hootstein, the joint executive producer Stephen Huttstern of the USA receptacle drama "The Woman Next Door" (Covert Affair), is not so sure. He did not know the formula Netflix used to parse the audience's data, but said it was hard to tell whether the company was going to keep up with the trend or to Mong the innovative episodes. In addition, betting on the card house or stunted development is actually something that needs no brain to think about.

"Basically, they're betting on an already famous episode, a pre-existing BBC TV series." In addition, they are betting on talented people who have the "secrets" of success. Huttstern said in an interview with Wired magazine.

Huttstern that Netflix is not betting on something new. But he admits there is a way to impress the Netflix data mining. "If you allow ordinary people to do this (meaning to create original content) and still succeed, then basically I think they have found the right idea that can fully prove that anyone can do it." If you are only supporting a talented person, then of course you will get good results. "he said.

Of course, even for a TV show with a strong cast and a famous writer or director, success is not necessarily a thing. There is no algorithm to fix the Sorkin (Aaron Sorkin Studio on the Sunset strip) at Sunset Boulevard 60th. Television is a ruthless world; in the end, only the audience can determine whether a series has succeeded or failed.

There are other challenges that could crush Hastings's dreams, says Michael McGuire, a media analyst at Gartner, a market research firm, Michael Mack. Releasing a TV network is one thing, and making the content on the Web a part of what people want to see is another matter.

"Creating original content and maintaining this trend are two different things. "said Micah. What he wants to know is what will happen if the people of the series such as "stunted development" do not reach the level that Netflix wants. Netflix is making a big bet on the show because it has ordered an entire season or two-season series. In other words, even if the show is not responding well, the company cannot be canceled, as cable networks often do.

Aside from this, Netflix's rise is much like the HBO network in many ways. When HBO first debuted in 1972, it focused on delivering films to cable TV subscribers ' families. In the 1980s, the HBO network began offering original content, launching "Dream on", "the Fraggle Rock" and "not necessarily". By the beginning of this century, home theater has been known for its compelling original content. The Sopranos (The Sopranos), the FireWire (the Wire), the Dead Wood (Deadwood), the prison scene (Oz) and Sex and the City (Sex) have made the HBO network an essential channel in the television revival process.

Today, if you subscribe to the content of the HBO network, it's not because you can watch movies on this TV--you can watch it on Netflix, Amazon, or any other streaming service provider's Web site--but because you want to watch the Atlantic Empire (boardwalk). Empire), "Game of Thrones" (Game of Thrones) and "Urban Girls" (American) and other original content.

But Netflix's quest for original content and exclusivity is slightly different from the HBO network. Netflix does not really have the series that it will premiere in its service, but will get it in the right time. The card house will be broadcast exclusively on Netflix for two seasons and will then be "taken away" by any company that wants to defeat Netflix.

On the other hand, HBO has its own original programme. The television network can do anything it wants to do with the Game of Thrones-Blu-ray, sell it to another network, or keep playing until George (George R. Martin) completes the seventh book. For HBO, the television network is capable of doing so, both in terms of capital and history. According to Time Warner's recent third-quarter results, the operating profits of HBO and Turner Broadcasting are $1.2 billion trillion, while Netflix's recent third-quarter earnings show that the company's net profit was only $8 million.

For now, it is financially meaningful for Netflix to get content rather than to have the original content in an empowering way. But even this approach can bring huge financial risks to the company. Still, Netflix wants to change the way you watch TV.

The full episode of the first season of the card House will appear on the Netflix web site next February 1, and users will be able to watch it streaming, no longer having to wait a whole week to watch what's going on down there.

"It will change the way people watch TV. "Friedland said. "By showing all 13 episodes on the same day, everyone has the opportunity to watch at their own pace, which is going to be a big moment," he said. It will be an interesting time for us to let consumers control their experiences. ”

(Responsible editor: The good of the Legacy)