How analytics has given Netflix the edge over Hollywood

Success is an elusive recipe for Hollywood and traditional content producers. The mix between subject, style, plot, stars, directors and other factors has been analyzed for decades and nobody seems much the wiser, other than the more the better: beyond stating the obvious that talent, plot and proven themes help, little else is known, while the success of low-budget productions are still seen as exceptions due to some quirk in public taste. Over the decades, predicting success has rightly been compared to trying to alchemy.

The content industry is being subjected to the same factors as other sectors: success now depends on business models able to leverage the generation of highly detailed data, and in light of the GDPR, must also respect our privacy, as well as being capable of feeding sophisticated data models, algorithms of properly trained machine learning to understand the business: predictions, expectations, exceptions and all kinds of information that must be managed in an increasingly quantitative, more accurate, more scientific way.

The latest Netflix series is not being made because a producer had a divine inspiration or a moment of lucidity, but because a data model says it will work. In that sense, Netflix is a 21st century analytical model, while Hollywood is still stuck in the 20th century. As a consequence, Netflix’s sustained success and growth, for those who understand the power of analytics, algorithms and machine learning, comes as no surprise.

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