Background:
Netflix, founded in 1997 as a DVD rental-by-mail service, has since transformed into the world’s leading streaming service with over 200 million subscribers globally. This transformation and subsequent success were not solely due to its early adoption of streaming technology, but also its heavy reliance on market research and robust information systems.
Challenge:
As Netflix transitioned into streaming, it faced numerous challenges:
- A rapidly changing entertainment landscape with a surge in online content consumption.
- Increasing competition from established media giants and new entrants.
- The need to cater to a global audience with varied content preferences.
Solution:
Netflix turned to market research and advanced information systems to address these challenges:
- Viewing Data Analysis: Netflix meticulously analyzed user data, noting what, when, and how users watched. This helped them understand user preferences in real-time.
- Personalized Recommendations: Using advanced algorithms, Netflix offered personalized show and movie recommendations, enhancing user experience and engagement.
- Original Content Creation: Market research provided insights into gaps in the entertainment market. Netflix began producing original content, like “Stranger Things” and “The Crown,” based on these insights, ensuring they had unique offerings that catered to audience desires.
- Global Expansion Strategy: To cater to international audiences, Netflix conducted extensive market research to understand regional content preferences, leading to the production of non-English originals like “Money Heist” (Spain) and “Sacred Games” (India).
Outcome:
Netflix’s commitment to market research and data analysis has made it a dominant force in the entertainment industry. By 2021, its original content had won numerous awards, and its user base continued to grow, testifying to the power of its data-driven approach.