Netflix’s recipe for success includes ‘secret sauce’ spiced with Silicon Valley savvy

Netflix's recipe for success includes 'secret sauce' spiced with Silicon Valley savvy
Awards, including an Emmy, are displayed at Netflix headquarters Los Gatos, Calif. on March 7, 2024. Netflix wins awards for its shows like a Hollywood studio, but still relies on the sophisticated technology of a Silicon Valley company to reel in viewers and subscribers. Credit: AP Photo/Mike Liedtke

Although its video streaming service sparkles with a Hollywood sheen, Netflix still taps its roots in Silicon Valley to stay a step ahead of traditional TV and movie studios.

The Los Gatos, California, company, based more than 300 miles away from Hollywood, frequently reaches into its technological toolbox without viewers even realizing it. It often just uses few subtle twists on the knobs of viewer recommendations to help keep its 270 million worldwide subscribers satisfied at a time when most of its streaming rivals are seeing waves of cancellations from inflation-weary subscribers.

Even when hit TV series like “The Crown” or “Bridgerton” have wide appeal, Netflix still tries to cater to the divergent tastes of its vast audience. One part of that recipe includes tailoring summaries and trailers about its smorgasbord of shows to fit the personal interests of each viewer.

So someone who likes romance might see a plot summary or video trailer for “The Crown” highlighting the relationship between Princess Diana and Charles, while another viewer more into political intrigue may be shown a clip of Queen Elizabeth in a meeting with Margaret Thatcher.

For an Oscar-nominated film like “Nyad,” a lover of action might see a trailer of the title character immersed in water during one of her epic swims, while a comedy fan might see a lighthearted scene featuring some amusing banter between the two stars, Annette Bening and Jodie Foster.

Netflix is able to pull off these variations through the deep understanding of viewing habits it gleans from crunching the data from subscribers’ histories with its service—including those of customers who signed up in the late 1990s when the company launched with a DVD-by-mail service that continued to operate until last September.

“It is a secret sauce for us, no doubt,” Eunice Kim, Netflix’s chief product officer, said while discussing the nuances of the ways Netflix tries to reel different viewers into watching different shows. “The North Star we have every day is keep people engaged, but also make sure they are incredibly satisfied with their viewing experiences.”

As part of that effort, Netflix is rolling out a redesign of the home page that greets subscribers when they are watching the streaming service on a TV screen. The changes are meant to package all the information that might appeal to a subscriber’s tastes in a more concise format to reduce the “gymnastics with their eyes,” said Patrick Flemming, Netflix’s senior director of member product.

Netflix's recipe for success includes 'secret sauce' spiced with Silicon Valley savvy
Cast members pose upon arrival at the premiere for ‘The Crown’ season 6 finale, in London, Dec. 5, 2023. Even when hit TV series like “The Crown” or “Bridgerton” have wide appeal, Netflix still tries to cater to the divergent tastes in its vast audience. Credit: Photo by Vianney Le Caer/Invision/AP, File

What Netflix is doing with its previews may seem like a small thing, but it can make a huge difference, especially as people looking to save money start to winnow the number of streaming services they have.

Last year, video streaming services collectively suffered about 140 million account cancellations, a 35% increase from 2022 and nearly triple the volume in 2020, when the COVID-19 pandemic created a boom in demand for entertainment from people corralled at home, according to numbers compiled by the research firm Antenna.

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Netflix’s recipe for success includes ‘secret sauce’ spiced with Silicon Valley savvy (2024, June 9)
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