Right now, we are actually in a technology era and an AI boom, but AI power or not, the user experience is crucial for the success of software applications. These applications have become important since the whole dot-com bubble thing.
The people and brains behind these, the software developers and product designers, really focus on fixing problems and nailing what users want. Now, let's talk competition.
In the entertainment industry, it's highly competitive and intense. You've got big names like Netflix, HBO, Disney+, and Hulu all battling it out. But Netflix is at the top of its game, reaching up to 190 countries and making its bank balance jump from $1.36 billion to over $30 billion in just about 14 years.
Chanuka Nadun Perera
By 2028, they're expected to hit $128 billion. How did this crazy growing happen? It's because of Artificial intelligence technologies. Let me tell you how Netflix uses AI to win the entertainment industry.
Throughout this article, you'll find terms like Artificial Intelligence, Machine learning, Language models(LLMs), Deep learning, etc. We do have articles for each and every one of those words if you wanna find out more. But ad to contect to this article I'll explain everything briefly.
AI, ML, Data Science & Netflix
Artificial Intelligence (AI) is an advanced form of computing thinking for us. It's all about studying those cognitive patterns to make intelligent systems even smarter.
Right at the heart of modern computing, AI is the hero, automating the sifting through mountains of Big Data. The use cases are endless – from robots that could be future engineers, cybersecurity systems, and virtual assistants to those smart devices in your home.
Data Science, behind-the-scenes managing, processing, and interpreting all this data so we can make smart choices. Machine Learning (ML), is using algorithms to dig into data, learn from it, and predict what's next using technologies like deep learning.
While data science plays with unstructured and structured data, AI is busy making computers think and see. ML is about learning from data and getting better.
Machine Learning is a subset of Artificial Intelligence, and Data Science powers AI and ML. How does all this tie into Netflix? Let me explain.
How Does Netflix Use Machine Learning?
Netflix has a massive array of titles and genres for you to choose from including comedy, psychological thriller, legal drama, fantasy, and many more.
If you’re new to Netflix streaming service, you’ll probably struggle to decide on one piece to watch and enjoy, and there are thousands of options to choose from. Even if you get recommendations from friends, you’ll run out of them at some point.
How, then, does Netflix improve your user experience in this regard? How is the app able to recommend (personalized recommendations) relevant content to you from a catalog of 18,000 titles? The simplest answer is Machine Learning and Artificial Intelligence.
Machine learning technologies are at the heart of Netflix’s recommendation system. This Netflix AI mechanism is responsible for making recommendations based on your preferences and a host of other factors.
The Netflix algorithm curates all user pages, identifying patterns in their rating and watching history. Explicit and implicit data collected include thumbs-down or thumbs-up clicks, the time you watch content, the location you’re streaming from, whether you choose to binge or not, etc.
The AI processes all of this data. As of the third quarter of 2023, Netflix had about 247.2 million paid subscribers worldwide. Analyzing the patterns and user behavior using machine learning.
As a result, the algorithm enhances its ability to deliver highly precise predictions and recommendations for your future viewing choices. This significantly enhances the user experience on Netflix and naturally attracts a larger number of subscribers.
How Netflix uses AI/ML/Data Science to stay ahead
Netflix cleverly uses AI/ML/Data Science to stay ahead, even with tough competition; because of their constant product improvement, they are at the top. According to a viewer data report on 18,000 titles, people have spent almost 100 billion hours with Netflix.
Netflix's AI recommendation engine is one of the best there are. With user data in their hand, they have algorithms to make the content recommendation. They keep tabs on your favorite genres and preferences, making sure that what they suggest hits the spot.
The algorithm autonomously learns and continuously accumulates data. Just by spending more time on Netflix, you enhance the quality of the recommendations you receive.
Netflix invests close to $1 million annually in its recommendation engine, solely dedicated to improving customer satisfaction. But the engine itself worth $1 billion in annual revenue.
Netflix considers various factors when making recommendations, such as:
- What shows and movies have you watched in the past?
- How long did you watch them for?
- Did you finish them?
- What ratings have you given to shows and movies?
- What shows and movies have other users with similar preferences watched?
- How popular are different shows and movies?
Did you know most of the thumbnails that you see on Netflix are auto-generated thumbnails? Those thumbnails are a big part of Netflix's game plan. They change them based on what they think you'll like, thanks to studying your tastes with machine learning. The right thumbnail can really make you want to watch something.
Streaming quality is another big deal. Nobody likes it when videos buffer or look bad. Netflix uses machine learning to predict network traffic and keep everything smooth. Back in Q3 2023, Netflix had 247.15 million subscribers.
Just think about it: millions of people worldwide tune into Netflix every month. Netflix AI helps a lot with Video quality. Even when everyone's streaming their favorite shows at the same time, Netflix manages to keep the picture sharp and buffer-free, positioning their video assets close to where their subscribers are.
They also focus on content quality checks. With the power of Data Science, they ensure the audio, video, and subtitles are top-notch.
Remember, customer service matters, especially in a competitive entertainment industry. Netflix knows that. They have AI-powered chatbots on standby round the clock, ready to quickly sort out any questions or issues you might have.
Thanks to their ability to understand natural language, these AI chatbots can chat with you just like a human, helping out with everything from technical problems to billing questions.
Chanuka Nadun Perera
A HubSpot survey found that nearly half of the customers (47%, to be exact) are cool with getting help from a chatbot as long as it gets the job done right.
Netflix is big on predictive analytics for original content. Thanks to their smart investment in AI-driven predictive analytics. This tech helps them figure out what's likely to be a hit even before they start filming.
Their decisions are all about the data. They dig into user data and check out how we all interact with their platform.
They're pros at spotting trends and patterns. This isn't just about what's hot right now; it's about understanding the preferences and interests of many different people. That way, they can tailor their lineup to fit all kinds of viewers, from kids to grandpas, horror fans to rom-com lovers.
Netflix has a bunch of features to boost overall content quality, too. There's the customized video ranker, the 'Trending Now' section, the Top-N video ranker, page generation, and video-video similarity features.
What can you learn from Netflix AI?
Specially for a business, you can learn a lot from Netflix especially to about digital marketing.
- Gather insights on what your customers like and how they behave. This knowledge lets you fine-tune your marketing pitches, recommend products they'll love, and boost their experience with your brand overall.
- Leverage AI to sift through your customer data. It's great for spotting key patterns and trends, which you can use to make wiser choices in areas like product design, choosing your target audience, and setting the right prices.
- AI can also help you customize your marketing efforts and suggest products that hit the mark with each customer's unique tastes. When customers feel you get what they want, they're likelier to stick with you.
- AI makes it easier for your customers to give their feedback, too. This input is gold for improving what you offer and ensuring you're in tune with what your customers are looking for.
Netflix Artificial Intelligence (AI) Limitaions
Even a tech giant like Netflix has its limitations when it comes to AI. Of course, they've got a seventy percent success rate in picking shows you'll love, but flip that around, and there's a thirty percent chance they'll suggest something you might not be into or less watchable to your flavor. They even got a good randomizer as well if you feel adventurous.
The thing is, consumer data science isn't foolproof. Netflix has this massive database and super intricate computer programs and algorithms, but they can't always suggest the right thing to watch.
Chanuka Nadun Perera
Simply because our preferences can be pretty wild and unpredictable, one day, you're into comedies; the next, you're all about horror films or documentaries. If they figure out a way to include programs like Emotion AI, things might change.
These limitations in their recommendation algorithms show that even with all their data and tech, there's room for surprise. The computer science behind Netflix is constantly trying to learn more about us to offer that perfect, tailored experience.
