Home » Amazon, Disruptive Innovation » Giving Viewers What They Want

Giving Viewers What They Want

26 February 2013

From The New York Times:

In the television business, there is no such thing as a sure thing. You can have a gold-plated director, a bankable star and a popular concept and still, it’s just a roll of the dice.

Or is it?

In any business, the ability to see into the future is the killer app, and Netflix may be getting close with “House of Cards.” The series, directed by David Fincher, starring Kevin Spacey and based on a popular British series, is already the most streamed piece of content in the United States and 40 other countries, according to Netflix. The spooky part about that? Executives at the company knew it would be a hit before anyone shouted “action.”

Netflix, which has 27 million subscribers in the nation and 33 million worldwide, ran the numbers. It already knew that a healthy share had streamed the work of Mr. Fincher, the director of “The Social Network,” from beginning to end. And films featuring Mr. Spacey had always done well, as had the British version of “House of Cards.” With those three circles of interest, Netflix was able to find a Venn diagram intersection that suggested that buying the series would be a very good bet on original programming.

Big bets are now being informed by Big Data, and no one knows more about audiences than Netflix. A third of the downloads on the Internet during peak periods on any given day are devoted to streamed movies from the service.

. . . .

Film and television producers have always used data, holding previews for focus groups and logging the results, but as a technology company that distributes and now produces content, Netflix has mind-boggling access to consumer sentiment in real time.

How much data does it have at its fingertips? According to GigaOm, Netflix looks at 30 million “plays” a day, including when you pause, rewind and fast forward, four million ratings by Netflix subscribers, three million searches as well as the time of day when shows are watched and on what devices.

Jonathan Friedland, the company’s chief communications officer, said, “Because we have a direct relationship with consumers, we know what people like to watch and that helps us understand how big the interest is going to be for a given show. It gave us some confidence that we could find an audience for a show like ‘House of Cards.’ ”

. . . .

 A cable executive who has talked to Amazon says that its Prime service, a nascent effort to get into original content, will also lean hard on data-driven approaches to determine its programming. The executive, who asked not to be identified because the discussions were private, said it would change the way that business operates sooner than people thought.

“I think it is a little hysterical to say that Big Data will win the day now and forever, but it is clear that having a very molecular understanding of user data is going to have a big impact on how things happen in television,” he said.

. . . .

 “Netflix and Amazon know when you stop and start a program, whether you wanted the whole thing, all of that,” said Rick Smolan, whose most recent book was “The Human Face of Big Data.” “Programmers have been wandering out and shooting a shotgun into the night sky and hoping they hit something, and I end up paying $150 for channels full of nothing I want to watch. These guys know what they are aiming at.”

Link to the rest at The New York Times and thanks to Brendan for the tip.

Obviously, Amazon uses Big Data for much more than its video service.

 

 

Amazon, Disruptive Innovation

32 Comments to “Giving Viewers What They Want”

  1. Isn’t this much like the mama bird chewing the food first and throwing it up for the baby to consume?

  2. “Isn’t this much like the mama bird chewing the food first and throwing it up for the baby to consume?”

    Barbara,

    I’ve sat and thought about what you might mean by the above, but I’m afraid I can’t quite grasp it.

    Would you be kind enough to elucidate?

    brendan

    • Lol. I actually got what Barbara meant, but for some reason your response made me chuckle, Brendon. :)

      • Mira,

        Being a higgerent customer/readah here amongst all you scary writers wot noes grammer’n’all..I feels a bit ahta me depth most of the time.

        I gotta admit, I’ve been thinking about Barbara’s comment, even after the explanation and I can’t make head nor tail of it. (I’m NOT being critical, I just don’t get it.)

        C’est la vie, C’est la guerre. I will never understand everything:) I will let it rest.

        brendan

        • You’re funny, you have me laughing. :)

          and don’t beeeeee silly, you’re a writer, brendan. You just don’t know it yet.

          As for Barbara’s comment, you sort of have to get it on a visceral level. Don’t overthink it, brendan, your mind will just get in the way.

    • As I take it:

      The big companies (mama bird) take in all the data about What They Know Sells, chew it up, and spit out pablum for baby-bird, which may have the occasional interesting bug leg or seed in it. It’ll be good enough, and maybe even pretty good, but you’re not likely to find something that is unexpectedly good, or okay-but-hits-your-buttons-just-right-so-you-watch-like-an-addict.

      It also, without outside innovators willing to take a chance, eventually collapses into mama bird pecking up what baby bird leaves behind and regurgitating that — because without new input, you get inbred copies of copies of copies of that one innovative show fifty years ago. “My Favorite Mr. Ed from Ork Martian,” maybe. Neigh-no, neigh-no.

      [Edit: Which, come to think of it, suggests that starting out, you may well get some pretty cool stuff -- there's a lot of data to crunch up and if mama bird is picking the tastiest stuff, well, hey! But the question becomes... is this sustainable? How quickly will it sink to copying copies of copies?]

  3. “Netflix has mind-boggling access to consumer sentiment in real time.”

    P.G.

    Heh…My front page of Netflix looks like a cross between a lesbian romance fetishist with a touch of Korean, diffused with a robot techno noir-ist:)

    I’d love to know what will happen to Netflix made series over time. Surely they can’t keep them entirely in-house?

    For instance, there must be a market in the UK for, “House of Cards?”

    brendan

    • We have Netflix in the UK now, Brendan. Although, the take up isn’t too great at the moment, I’m sure it will pick up. As for House of Cards, you do know it was a British series first (based on Michael Dobbs’ excellent trilogy of novels) that came out in the 1990s and starring the excellent Ian Richardson?

      Not sure how the US version is going to manage the sequel To Play the King, as it is about the battle between Francis Urquart (Underwood) and the monarch, since you Americans don’t, you know, have a monarch.

      • “you do know it was a British series first (based on Michael Dobbs’ excellent trilogy of novels) that came out in the 1990s and starring the excellent Ian Richardson?”

        Robert,

        Yes. Rather why I thought UKers might be interested to see what dem Yankees dun with a grate brit favourite. Ole FU was scary:)

        At the time it came out, I was resident in London, stepping out with a young journalist, and baby sitting a senior politician. The first series was malevolent telly at it’s best. Fell off a cliff S 2 and 3.

        brendan

  4. No, Barbara. Historically, the entertainment industry (including publishers) has been like a woman I knew who used to shower me with godawful, ridiculous gifts such as a flower pot shaped like a cowboy boot and journals covered in lace and buttons. Whenever a gift bag appeared I had to repress a groan, while at the same time wondering, Do we even live in the same universe? Who does she think I am when she foists this crap off on me?

    Now here comes Amazon and Netflix, and every time I open one of their “gifts” I’m all, “Oh! How did they know I wanted this?”

    I say good for Netflix for figuring out how to give the audience what it actually wants.

    • Okay. I used to write for television. That was before and after I wrote books. If you like what Netflix offers, I’m actually happy for you and for those writers.
      The writers I’m not happy for are those who have something surprising/different to say but are thwarted because Venn diagrams tell the bigwigs that’s not what the audience wants.
      I stand by my bird vomit comment.

      • The point I was making is that historically, entertainment has been like my flaky friend. I tell her I don’t do houseplants, hate stuff I have to dust and can’t stand cute. She insists on giving my ugly pots (with live plants), tchotckes and beaded scarves.

        In other words, she acts just like the big publishers, bookstores and network TV. According to my local B&N what I SHOULD want are James Patterson and YA paranormal romance and overpriced kids’ toys. According to network TV it’s stupid sitcoms, singing competitions and crime dramas that are indistinguishable from one another. Needless to say, I don’t shop at the B&N or watch network TV.

        Contrast that with Netflix and Amazon. They LISTEN to me. The longer I’m a customer, the better their recommendations. They understand I have a lot of choices and it behooves them to continue listening. If Netflix tries to push crap I don’t like, I can go to Hulu or Crackle or HBO or YouTube or end my war with the cable provider and get cable again.

        If the Venn diagrams go bad and the producers start making idiot crap, click click, flip flip, I’m gone.

        • “Contrast that with Netflix and Amazon. They LISTEN to me. The longer I’m a customer, the better their recommendations.”

          Jaye,

          Any time spent wandering the halls of Netflix is to scope out the maddest, worst, best, shouldn’t have been made telly and cinema.

          Stuff that nobody and his dog has seen.

          There is NO possible correlation between Netflix and BigButtPub, none.

          Netflix is, “Puccini for Beginners.” BigButtPub is James Patterson, (whoever the heck HE is today.) BBP is dying, Netflix is roaring.

          Netflix is where you go to see, “art,” movies. Even if I hardly watched a show there, it’s worth the $10 a month to keep the doors open, purely for the variety and weirdness you can’t get anywhere else.

          brendan

  5. This concept will only work for so long. In less capable hands it creates a pablum.

    I’m reminded something Steve Jobs said:
    “A lot of times, people don’t know what they want until you show it to them.”

    I’m not wowed by the calculated, but by what I didn’t expect.

    • But that’s the thing – I didn’t know I wanted a U.S.-remake of House of Cards until Netflix started touting it.

      I think a lot’s being made of Netflix’s bet paying off this one time. But if big data produces work of this quality, I’m happy that someone’s looking into it.

  6. You have to be careful with logic like this, otherwise you end up thinking:

    1. We know that my little pony is popular
    2. We know that hogwarts is popular
    3. We know that erotica is popular

    So, lets write my little warty hog erotica.

    It’s bound to be popular.

  7. @ Thomas – I don’t know. I think I might read erotica about the little pony at Hogwarts.

    ….or maybe I shouldn’t admit that?

    (just kidding)

    So Netflix is doing for T.V. what Amazon is doing for books. Tracking consumer preferences.

    Can’t argue with that. I’d love for them to make T.V. programs people wanted to watch.

    And for artistic freedom, we still have you-tube and their reimbursement program.

    • Mira, I would argue that Netflix is doing for TV what “Big Publishing” has done for most fiction and nonfiction: figure out what people have bought in the past, and concoct formulae, then buy examples of it–the more formulaic the better. This time it seems to have worked out for them. I’m not taking bets on how they’ll do when they factor this success into future concoctions.

      • Bridget – you may be right, but I think (hope) the difference is that Netflix is basing it on detailed data. Whereas Big Publishing’s market testing is limited to: It sold a million dollars, so let’s do that again.

        It’s one of my main gripes about Big Pubs. They don’t measure the market or really understand the reader.

        Of course, if Netflix is just going by formula, rather than actual market research, then I agree – you are spot on the nose!

  8. I’m going to be glad when “Big Data” is no longer the latest catchphrase. Every pop article I see about the subject is written from the “It’s magic” perspective that makes data analytics seem much more powerful than it really is and quite a bit creepier. It’s just a tool and in the movie/TV/video business all it can really do is improve an executive producer’s “gut instinct”. The power of data analytics is almost completely dependent on the accuracy of the model that is applied to the data. The less accurate your data model is, the less likely “Big Data” will help.

    I wouldn’t worry about “Big Data” crowding out “the surprising/different” stuff either. The reason is a bit counterintuitive and hard to explain, but let’s use “House of Cards” as an example. As soon as David Fincher signed on, there was no doubt that “House of Cards” would get done. It didn’t take “Big Data” to see that. “Big Data” allowed Netflix to see that the series was “The One” they needed to launch their original programming. Netflix outbid other networks because “House of Cards” was worth more to them than to the others. Nobody was ever going to spend that kind of money on “surprising/different” because it’s too big a risk.

    With the right model, “Big Data” can also find the initial market for the surprising/different things just as easily. That’s what the Amazon “alsobot” often does. The way to encourage surprising/different is lower the cost of production and increase the odds that the people who are looking for your particular type of surprising/different find you. That’s what creates the best chance for surprising/different to catch on.

    The important thing to remember is that in any entertainment industry, there are never more than a handful of productions that will be huge hits in a year. Most of the money earned by those hits comes from people who will never take a chance on surprising/different. They won’t buy something unless “everybody else” is also buying it. Surprising/different never has a chance at that money until they earn money from the small group of people who will take a chance.

  9. What I don’t understand is how anyone — Netflix, Amazon, Hollywood, the big publishers — can figure out what I want to see or read next when often I don’t even know what it will be. I’m serious.

    I had a quick glance at the DVDs & books I own, & while they show I’m an omnivorous reader (anyone else have both Portrait of the Artist as a Young Man & Mickey Spillane on his bookshelves? that’s just one example), they also show I my taste doesn’t follow consistent patterns. Another example is this: I was into the Church of the Sub Genius back when, I listen to Grunge Rock, I like shows set in Portland — yet when I watch an episode of “Portlandia” my reaction is “meh”.

    And I suspect I’m not the only one with this problem.

    It may simply be that in predicting what the public wants, the entertainment industry simply is looking for something that will capture 30-40% of the total audience, & not worry about the rest of us. That share is enough to make any tv show or book a solid hit.

    I simply wish they’d also consider counter-programming. In other words, if all the other publishing houses are releasing “James Patterson and YA paranormal romance” books, why not focus on their opposites? I remember reading years ago about the 1972 primary elections that Time & Newsweek selected some marginally important political scandal connected to the elections for their cover story, while US News & World Report (then the third ranked weekly news magazine) picked a non-elections story for their cover: US News news stands sales that week went thru the roof, & IIRC outperformed the other two magazines.

    • “What I don’t understand is how anyone — Netflix, Amazon, Hollywood, the big publishers — can figure out what I want to see or read next when often I don’t even know what it will be.”

      They don’t. They just spam you with emails recommending anything and everything and invariably get an occasional hit.

      Or maybe that’s just amazon.co.uk. Barely a day goes by I’m not being recommended an ebook I’ve already bought from the Zon, or even that I wrote myself,and although I’ve never bought anything but books and DVDs from the Zon they continue to shower me with special offers for items I would never in a million years want, let alone need or buy.

      Big Data? Dream on…

    • Geoff,

      Let me illustrate. I know something that will happen to you in the very near future that you don’t know. I can predict with some certainty that the next animal you think of will be an elephant. See, you just thought of an elephant.

      Before you dismiss this as a cheap trick, let me explain why it is just a simplified version of what “Big Data” does for Netflix, et. al. At first glance, it would appear that to make my trick work, I just need to know two things. I knew what animal I was going to mention. And I knew that when you read the letters e-l-e-p-h-a-n-t, you will think of a particular animal.

      But there is some knowledge about you that is bound up in that last bit. I had to know that you can read English. That’s easy enough because you’ve already proven that. Now, if I knew you better, I could make this trick a little more impressive to outsiders. If I knew you were a Dr. Seuss fan, I could have just written a sentence with the phrase “Horton hears a Who” and then told you that you had just thought of an elephant.

      The reason you don’t know what you will read next is that you don’t know what your choices are. Amazon knows me well enough to know that I will buy the next thing that Barry Eisler publishes. They have also figured out that x% of the people who have bought all Barry’s stuff will buy Lee Child’s Jack Reacher books, if they are offered to them. So they email all those people, including me, an offer for Lee’s books. They don’t particularly care whether or not I buy a Jack Reacher novel. They just know they will sell more books and have happier customers.

      The next thing you will want to see or read next isn’t one thing. It’s a range of possibilities. It doesn’t become “a thing” until it happens. And then it’s not the next thing, it’s the now thing. I suggest “Horton Hears a Who” by Dr. Seuss.

      • Sorry, William, but at the word “animal” I immediately saw an elongated, hirsute mammal like an opossum. (Damn, I wish it really was a cat: cats are far more pleasant creatures than opossums.) That was before I even saw the word “elephant.”

        Part of the reason your trick didn’t work was that I suspected what you were about to do: plant an idea or image in my head. Not that you couldn’t pull that trick on me, but only if I’m not expecting it. Or I’m tired. Or preoccupied. But part of it is that my decision-making process is open to a lot more variables than I expect the media accounts for. One is, I can’t always buy the next item on my Amazon list because of fluctuations in my income. Another is that I don’t always have control of my own tv (my daughter does) or movie viewing (I’ve managed to see 2-3 movies last year due to family). And I tend to be very open to the new & different: my tastes in music in the last 18 months has shifted from Grunge Rock to Classical. But that quirkiness & flexibility may make me an atypical case.

        Still, I’m not convinced. I may be too sophisticated for these tricks to work on me, but I’ve found a lot of people simply aren’t sophisticated enough for the steps the trick rely on to properly work.

  10. The original UK version of House Of Cards is also on Netflix. I highly recommend it. I think it’s about ten episodes.

    • Keeping in mind each episode is about two hours long, IIRC. I’ve just started season two. (And by “just started” I mean, “I finished the first episode of season two a week or two ago and haven’t got back to it because the length of each episode is a bit of a time commitment.”

      Season one is amazing. I’m not really sure where it hooked me, but I was sort of struggling through the first half of the episode. Actually… maybe I do know where it hooked me. The catchphrase, “You might think that…”

  11. “Keeping in mind each episode is about two hours long”

    Geoff,

    Er, 55 minutes, S1.

    S2 went to 53 minutes.

    S3, 50 minutes.

    http://movies.netflix.com/WiMovie/House_of_Cards_Trilogy_BBC/70200744?trkid=8133737

    brendan

  12. This articles strikes me as very similar, in principle, to another article discussed here recently about the growing differences between shopping for books retail and shopping for books online. It’s textbook Long Tail economics.

    Book recommendations at my local B&N or my local indy retailer are based on the marketing budgets of big corporations (i.e. as a shopper, the books pushed under my nose are the books that major houses assume readers will want), supplemented by the tastes of booksellers (the “Staff Recommendations” shelf or table) who don’t know me from Adam. THAT’s how books are marketed in retail stores.

    Similarly, DVDs available at my local Blockbuster (back when we had one) were based on what Hollywood and Blockbuster assumed most people would want to watch (and thus I could never find anything to watch).

    By contrast, Amazon and Netflix post recommendations for me based on what I -actually- watch and read, which info their systems collect from my account. This isn’t a foolproof system (ex. on Amazon, I might buy gifts that don’t remotely resemble my own taste), but it’s a system which nonetheless recommends products typically a LOT closer to my actual tastes, since it’s based on what -I- actually look at an buy, rather than being based on (as retail marketing generally is) on what marketing departments and total strangers generally assume “the masses” want.

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