Recap: In ‘EP01: The Beginning’, we explored how OTT has gained dominance in India, and how some players are at war for grasping your attention (EP02: The War). The dark horse, the raging bull among them is Netflix. What differentiates Netflix? What gives them a unique advantage?
The answer lies in Netflix’s profound usage of Artificial Intelligence - algorithms that drive user recommendations and interactions.
Woah. Slow down.
EP03: The Finale
The presence of AI today is becoming more and more apparent — particularly as large companies like Netflix, Amazon, Facebook, Spotify, and many more constantly deploy AI-related solutions that directly interact (behind the scenes) with consumers every day.
What is AI? AI or Artificial Intelligence is the use of machines to understand and interpret complex, often unrelated information, and operate at super-human efficiency. Basically to achieve levels of ‘machine-thinking’ which humans can only dream of.
Remember Jarvis, from Iron Man?
Netflix's Deploys A.I. in:
1. Personalization of Movie Recommendations —This is perhaps the most well-known feature of Netflix. Netflix uses your watching history, compares it with users having similar tastes to recommend what you may be most interested in watching next so that you stay engaged. It isn’t magic that shows like Dark randomly pop into your recommendations. (Everything is connected)
2. Auto-Generation and Personalization of Thumbnails and Artwork — Using thousands of video frames from a movie or show, it ranks each image in an effort to identify which thumbnails have the highest likelihood of resulting in your click. These calculations are based on what other viewers (who are similar to you) have clicked on.
3. Location Scouting for Movie Production (Pre-Production) — Using their immense repository of information, the AI builds a model to help decide on where and when best to shoot a movie set to overcome constraints of scheduling (actor/crew availability), budget and production scene requirements.
4. Streaming Quality — Using past data to identify bandwidth usage to help Netflix decide when to use regional servers during peak demand (to reduce stress on existing servers).
Netflix seems to be a class apart from traditional media companies not only in what they recommend but how they recommend it to their users.
Netflix’s immense specialization in data science and AI capabilities enables the personalization of the streaming experience based on user behaviour. It classifies and tags content to get a view of consumer preferences.
(Netflix has developed over 1,000 tag types that classify content by genre, time period, plots, mood, etc. Content classification, combined with a proprietary recommendation engine, enables Netflix to serve a better customer experience).
Netflix’s Senior Data Scientist, Mohammad Sabah stated in 2014:
“75 per cent of users select movies based on the company’s recommendations, and Netflix wants to make that number even higher.”
Mind-blowing!
This unique formula seems to have worked well for Netflix pretty much everywhere and is the reason why Netflix stands miles ahead in the global streaming space. Given the time and investment that its peers would need to understand customer behaviour and make such models, Netflix is optimally placed to take the OTT war to the next level.
The Change
Unlike conventional networks where programming and viewing are heavily related to the time of the day or even the season, OTT works on a simple premise – let customers choose whatever they want to see, whenever they want.
However, customers are still not willing to pay much, and most of the OTT players are not looking to monetise through advertisements. They are sticking to their subscription revenue model for now (except Hotstar, which has both, ad revenue + subscription fee).
Seeing how these platforms are blowing up, advertisers are keeping a close tab on how things play out. And so are we.
Winner-winner, chicken-dinner!
Things are just looking to get more intense.
You ask who’s the winner in this war?
It’s you, silly. The consumer.
We loved writing this series. Hope you loved reading it :)
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