How does Netflix manage its viewers so well?

Today's Netflix is ​​focused on changing behavior through storytelling. There are three reasons for this.

Six years ago, Netflix released a pilot series of House of Cards by David Fincher. This was the first of the so-called “original” series created and produced by Netflix itself. Since then, the company has produced hundreds of successful shows and films, including the already very cult Very Strange Things , Eighth Sense , and Narco . Today it’s already clear that Netflix has influenced our culture, changed the entertainment industry and made Hollywood shudder.

In the last months of 2018, Netflix released The Birdbox with Sandra Bullock, which was watched by 80 million households (this is 58% of all subscribers) and You , seen by 40 million (29%). Netflix seems to have mastered the mass production of successful and exciting stories .

Ben Badzharin from TechPinions believes that Netflix works according to the “history as a service” scheme (Story as a Service, similar to other “as a service” models), and in this area it is far ahead of all competitors. Netflix shows like books: they make you read, swallowing one chapter after another. The rest of the TV channels - HBO, CBS, ABC and others - only release a series of stories connected by one storyline. If you look at this, Bajarin concludes, Netflix has few competitors besides Amazon, Disney and Apple.

I see three main reasons why Netflix so cool sets the audience on their shows.

[1] Obsession with users - in a good way. Gibson Beadle, former Netflix vice president of product management, says Netflix’s key to product success is user obsession and enthusiasm. The company makes decisions based on consumer science, works with data, conducts research, surveys and A / B tests of new ideas. Netflix is ​​trying to identify and satisfy non-existing, future user needs - and increase the enthusiasm of its subscribers in the long run. In the process, the company creates new market niches and increases its margin . Netflix recognizes that its primary goal is user attention.

In the USA, we won about 10% of television screen time, and mobile less. In other countries, our share is even lower, since the penetration of our service is lower. We select consumer screen - television or mobile - time from completely different competitors. We challenge (and lose) Fortnite rather than HBO. [...] Our growth is based on the quality of Netflix impressions, which is compared with all other user impressions. We focus not on Disney +, Amazon and others, but on how we can give our subscribers the best experience. - Reed Hastings, Netflix CEO

[2] Storytelling: storytelling . The Netflix show - with many plot twists, understatements, multi-part storylines - is associated with the company's main metric - a user subscription. On television, the content is secondary, it is created to maximize the profit from advertising on the air. Netflix wants its users to get the best content, and it works no less effectively than marketing campaigns.

[3] Metrics . Netflix is ​​known for its unusual metrics . For a subscription service, focusing on increasing the number of new users and retaining old ones is commonplace. But calculating these parameters is sometimes difficult.

• Netflix measures success in a “ valuable watch, ” a variant of “viewed hours,” which counts the fraction of time a user spends behind a screen. This shows us that the time that subscribers spend on Netflix is ​​not an end in itself for the company. Netflix wants users to watch more movies that really matter to them. This metric is associated with a long-term subscription.
• Enjoyment is another Netflix metric. It also does not look like traditional metrics like user satisfaction or consumer loyalty index (NPS). The company used to measure the quality of content on a five-star scale, but at some point it switched to the binary finger-up or finger-down rating that can be given at the end of the show. Combined with a user profile, this data allows Netflix to predict the likelihood that its subscriber will enjoy a particular show.

All in all, Netflix is ​​one of the leading tech companies that have made behavior change the foundation of its success. Its key methods are consumption science, a grocery approach and storytelling.

Text: Alexey Ivanov, Diana Letskaya @ 757nf
Community: @ponchiknews