As I sit down to write this article, I fall back into memories of what it was like to rent a movie 15 years ago. It was a process: dress up, get in the car, drive, pickup, come back, enjoy and finally don’t forget to return on time. Repeat… Co-founder of Netflex Reed Hastings is often quoted saying that he decided to start Netflix after being fined $40 at a Blockbuster store for being late to return a copy of Apollo 13.
Arrival of movies on demand in your mail box was a breakthrough, and, we could keep them as long as we wanted. But the real change that we all came to embrace and now consider a norm is the content delivery though the web. The keyword is "content" and Netflix is the ultimate content marketer.
Content for companies is a matter of life and death. I know this firsthand. In mid-2000 I worked for Lycos (black lab search engine for these who don’t remember). One of their most promising products was Lycos Cinema. It was an amazing product that allowed users to watch movies over the net. We were the pioneers of this technology but the problem was - content. All Lycos Cinema had to offer was open domain content. Charlie Chaplin silent movies, Min and Bill and Under Roofs of Paris dominated the watchlist and very few were watching. Lycos Cinema was straggling to get steam due to lock of content and as a result the project was closed and we all were let go.
Creating excellent content builds an audience
Netflix early on was a streaming service presenting us with TV shows licensed from other companies but this alone wasn’t enough in order to stand out. They were looking for ways to avoid relying on others’ content to gain success. Its content strategy become very tactical and Netflix started to invest in original content so much that it can almost market itself.
Now their original series such as (House of Cards, Daredevil, Stranger Things) are some of the most anticipated shows in the world. In 2017 Netflix spent over $6 billion on new content creation. This content strategy helped them hit the record 117.6 million subscribers in last quarter of 2017. For comparison, there are about 94 million pay TV subscribers in the U.S.
Netflix is a Big Data company
Like any good marketer, Netflix is using data analytics and research to improve user experience for their customers. In 2006 the company was seeking to substantially improve the accuracy of predictions about how much someone is going to enjoy a movie based on their movie preferences. The competition was open for three years and developers of winning algorithm awarded $1 million.
Netflix also often conducts surveys of their audience preferences. Their 2013 survey found that 73% of users, like to binge watch television series. This confirmed their content marketing decision to upload all episodes at once, the trend they continued ever since.
Netflix big data analytics also helps to predict the success of original content and content acquisitions. For example, Netflix used viewership data to predict the success of House of Cards, its first foray into original content.
Embedding marketing into content marketing
Netflix is always on the lookout for ways to better reach their audiences where they are, such as mobile. Most impressively Netflix created a number of interactive marketing campaigns for their show releases for Orange is the New Black in New York Times and Narcos in Wall Street Journal.
“We have migrated over the last two to three years to be more content forward in our marketing, more digital in our marketing, we’re getting smarter and more efficient about how we put those dollars to use,” David Wells, CFO Netflix.
Personalized user experience
Everything in Netflix UX is driven by data. Their new recommendation engine uses customers’ viewing, search, scroll, and ratings data as well as time, date, and the device being used to predict what a viewer will be interested in watching. This is layered on top of the content, which has been tagged with metadata to find similarities among pieces of content.
Starting watching a movie on one device automatically continues on another and makes it seamless experience. As a result, approximately 100 million hours of content are viewed on Netflix every day. Collected data allows Netflix to personalize each subscriber’s experience and recommend content we likely to watch and enjoy.
Studies prove that personalized content delivers a 6x higher transaction rate and Netflix is a great example of a success story. Netflix is an innovative company at the top of its game and it has something to teach all content marketers.
Tell us how your company is using personalization and content marketing and what difference it make in your business.