Netflix’s Ingredients For Success: Cooking Up An Addiction
Published last year for Momentology
It isn’t often that a major, global brand becomes a household name. Netflix have made such a massive disruption to the way people are buying and watching film and television, that in a way the brand is no longer just a content streaming provider, but a synonym of the home media digital revolution. It’s been achieved through an arsenal of innovative practices and clever marketing. What is their secret? What are the ingredients every brand marketer should be aware of to cook up success of their own?
It’s Friday night and my wife and I sit down after the kids have gone to bed. We just need one look and then my wife says, “Shall we?” I reply “yes” and within seconds we’re completely into it.
A lot of “oohs” and “aahs” follow for the next 50 minutes: we’re watching our favorite show “House of Cards”. Fifty minutes later, my wife looks at me again and asks: “one more?” The answer is the same and off we are again.
It’s a scene you will be able to see in many households on Friday nights or any other night of the week.
It’s the dream of any marketer: creating the addiction.
The success of the service is immense, with more than 50 million subscribers and revenue of $1.34 billion in the second quarter of this year.
What’s Netflix’s recipe for success? What makes consumers go back to Netflix so often? Let’s look at three of the main ingredients: understanding of the audience, creating the addiction, and making a contagious product.
Lesson 1: Understand Your Audience
Netflix understands its users and makes them feel special. This is a major reason the service has succeeded.
I’m one of 50 million Netflix subscribers, yet it feels as if they crafted Netflix just for me. That’s all because of the way Netflix organizes their product.
Netflix understands the needs of modern-day people watching TV or movies: seeing what you want whenever and wherever you want. The $7.99 per month cost is affordable for many and is much cheaper than the prices of cable companies.
Combined this is very powerful. Even though I won’t watch most of what Netflix has to offer, I also wouldn’t watch most of what a cable company offers. But because Netflix is fit to my needs and tastes, and it’s cheaper, it feels like a much better deal.
How can Netflix understand consumers so well and what can we learn from this?
Use Of Big Data
Netflix is probably the best example of a company using big data.
Marketers have been talking about personalizing content for years. We’ve been taking small steps toward a “personalized web” since Google started personalizing results for everyone in 2009 (though this has privacy implications, as Eli Pariser describes in his book, “The Filter Bubble“).
Personalization also has its advantages — namely, the ability to give people what they want or need. Netflix is a great example of how this can work. They seem to even outplay Amazon when it comes to personalizing content and getting people to stick with them and watch more and more.
Joris Evers, director of global corporate communications for Netflix told The New York Times that there are 33 million different versions of Netflix. That’s how personalized it gets. Netflix understands that nobody is the same, so everyone needs their own personal attention.
To deliver personalized content, Netflix must understand their audience on a one-to-one level. This isn’t your “average” gender/age/income type of user understanding, but understanding on a personal level, which is lot more difficult to find out. To get that understanding they rely on big data.
Netflix gathers data in many different ways.
User Data
It all starts with the data that Netflix users provide. Netflix tries to tell the difference between users in one household (though this doesn’t work on every app) and even asks the users to rate shows themselves so they have a start. And users get the option of creating a list of series and movies they want to see.
This is just the data Netflix has asked for and been given by users. What’s more interesting is the behavioral data.
Netflix tracks our every move. Which movies and series we watch are the obvious ones, but the detail data is much more interesting for Netflix. For example the exact timing we stop or pause a show or maybe even scroll back a little will tell Netflix a little bit more about our likes and dislikes.
Movies And Series Data
Tracking our behavior is one thing, but you then have to connect that behavior to the data you already have. And to make an almost perfect connection, you need a lot of data.
Netflix did their research. Even before their launch, they researched every side — not just the user side, but also the product side: in their case, the movies and series.
Netflix gathered as much information as they possibly could on every show and movie they have. All the basics (i.e., genres and categories) were covered, but Netflix went much deeper, actually paying people to watch series and films and tag them with all different sorts of metadata.
Earlier this year The Atlantic described how Netflix possesses “a stockpile of data about Hollywood entertainment that is absolutely unprecedented”. The Atlantic tried to do the same and realized how much work it must have been.
This data is extremely valuable because it connects the user data to the product.
Social Media Data
Netflix doesn’t just look at user behavior when watching one of their programs; it also looks at social media behavior.
Search for [Netflix] on Twitter and you’ll see how many people are sharing information on what they are watching. But they don’t just share.
People share their sentiment as well — what they like or dislike about shows, which characters have the most impact on how people react. All hugely valuable data for Netflix. Why? Because it tells them a lot about users.
Just look at this tweet and the amount of information it carries:
It has information on the show, characters, time of watching, and level of addiction in it. Extremely valuable for a company like Netflix.
What Can Marketers Learn From This?
Here’s what Netflix teaches us about understanding an audience:
- Nobody is the same.
- Research your audience on every level.
- Connect the research to your product data and find the overlap.
- Research social media and really listen to what they have to say (sentiment).
Lesson 2: Make Your Product Addictive
There’s something funny about Netflix series and movies: they are incredibly addictive. My wife and I have watched several series on Netflix and we just couldn’t stop. We even watched multiple episodes of the same series (think “House of Cards” and “Downton Abbey”, for example) on the same night. And we aren’t alone:
Why is that?
Netflix seems to have found the Holy Grail on making your product addictive. Is that pure luck? No — at least not entirely. There are a few elements of success we can pinpoint:
Use The Right People
Kevin Spacey is hot these days. One reasons for this is his starring in the lead role of Francis Underwood on the Netflix show “House of Cards”. But Spacey had done a lot of things before and he brought that name to the show. And it was the right name.
Netflix researched the show beforehand and found a lot of interesting information. Most importantly: they found an interesting and successful combination.
As The New York Times described very nicely last year, Netflix found that the combination of a popular British TV Show (“House of Cards” is originally British) with Spacey and director David Fincher, who had directed “The Social Network” and was responsible for other successful shows on Netflix, would be very successful. They crunched all the data available and found that this was the ideal combination:
Image source: The New York Times
So even before the show aired, Netflix had a pretty good idea of the potential success. But one could argue that this was just pure luck.
It wasn’t.
It was data.
In the New York Times article, Netflix’s Jonathan Friedland said, “Because we have a direct relationship with consumers, we know what people like to watch and that helps us understand how big the interest is going to be for a given show.”
It isn’t just the series, it’s the people who come with shows as well. Getting Ricky Gervais and Chelsea Handler onboard was a golden move for example: it attracted attention and their fans.
Netflix knows which people their audience likes and they bring those on board.
Exclusiveness
Series like “House of Cards”, “Orange is the New Black” and the revival of “Arrested Development” all had something in common: being exclusive to Netflix. People couldn’t see these shows anywhere but on Netflix.
Simply the fact that you can’t see it anywhere but on Netflix makes it partly irresistible. It makes you feel exclusive, as if the series was made just for you. The strategy isn’t unique to Netflix (HBO does the same, for example), but it works.
Watch A Whole Season At Once
Next to that it feels good to watch something exclusive (even though you are exclusive with 50 million other people), there is something really addictive about Netflix: on demand. In the “old days” you had to wait a week for the next episode; with Netflix you have entire seasons (and sometimes more) available whenever you want, without having to buy the DVD.
Netflix helped make “binge watching” a household word. This availability is so addictive to some that they can’t stop watching.
It’s Available Everywhere
As long as you’re in the right country you can watch whatever you want on Netflix on any device. It’s everywhere! You don’t have to wait anymore until you get home. Start watching on the train!
Image source: Netflix PR
What Can Marketers Learn From This?
Here’s what Netflix teaches us about turning users into addictive users:
- Get the right people involved, both the “influentials” endorsing your product as those working on it.
- Make (part of) your product exclusive.
- Offer something others don’t have.
- Make your product available in as many places as possible.
Lesson 3: Make Your Service Contagious
We’ve seen how Netflix uses big data and social media to understand their audience and with that creating the right products. We’ve also seen that the way Netflix structures their products (apps, series, and movies) makes people repeatedly come back to the service.
Now let’s look at how Netflix uses their, yours, and everyone’s social network to make their service as contagious as the flu.
Before we look into that however you have to understand that “social network” is much more than social media. A social network is basically anyone you’re connected to, directly and indirectly, online or offline.
Quality Customer Service
A very important part of getting people to talk about you in a positive way is doing your job right. But even more important is offering the right service when things go wrong.
We’ve seen examples in the past of brands being more popular after a mistake than before, simply because they did a good job fixing the problem. Netflix realized this and set up a customer service program that puts a big emphasis on social. In an article on SocialMediaContracters you can read how four things are important in quality customer service — culture, channel, metrics, and fans — and how Netflix “ticked all the boxes.”
Those Cool Kids Again
Again, getting the right people involved is important. Having people like Spacey, Fincher, Gervais, and Handler onboard provided quality, but it also provided “social proof.” If people of this stature are willing to work with Netflix, it must be good!
The fact that Handler chose to do a show on Netflix generated a lot of free media coverage. People were talking about it. Getting the “cool kids” involved definitely helped get the word out.
Connected to Facebook
Netflix has a connection with Facebook. You can login using Facebook, but you can also share what you watch on Facebook. But more importantly, you can see what others are watching.
Image source: splashpress
This gives Netflix a lot of data on their users and their connections, but it also helps the service gain some traction. It shows what people are watching, to others, which will make that their friends are at least triggered to the service and in some cases will be more tempted to use Netflix or if they already do, watch a series or movie, because their friends watched it.
Popular On Facebook Section
Netflix also has a ‘popular on Facebook’ section, which will show you as a user what other people are watching. This will without a doubt trigger you to watch some of it, especially since it is personalized like described above.
The Social Pressure
What Netflix does with Facebook is part of building social pressure. The pressure to either start using the service or watch certain shows, simply because their friends are. Netflix is very keen on this and tries to get you to put pressure on your peers, sometimes even without knowing it.
Tell Your Friends
Netflix has just announced that it is now possible to recommend your favorite shows and movies to your friends. Specific friends even. You can connect to Facebook and choose which friend should watch the series you are watching as well. No stronger recommendation is possible.
It’s the old “tell-a-friend” functionality, but just a bit smoother.
(Email is in Dutch, but hopefully you get the idea.)
Playing With Spoilers
In the “old days” we would have spoilers that would trigger you to mark your agenda for the next episode of the series you’re watching. At the end of the episode you would get a little sneak preview of what’s coming next. These days, spoilers are everywhere, especially on the web. Whether it’s a new show or a new episode, spoilers are teasing people to head over to Netflix.
Netflix makes use of this trend in a clever way by getting many spoilers out there, on TV, but also on the web. And they push these spoilers quite a bit, hoping people will share them with their own networks. Just look at the Netflix Twitter account in the U.S. and you will see lots of tweets like this:
But they even take it one step further: Netflix recently launched spoilers.netflix.com, completely dedicated to spoilers. Here they show spoilers, but they are mainly trying to trigger the audience to participate with features like “What kind of spoiler are you” and “Spoil yourself”.
A little psychological trick here is to add the warning sign, which will make people more curious.
What Can Marketers Learn From This?
Here’s what Netflix teaches us about making a service contagious:
- Offer the right service when things go wrong.
- Get the right endorsements from those who matter.
- Connect to the social channels.
- Create social pressure amongst your fans.
- Help your audience to share.
The Final Ingredients: Trust, Quality Content & A Pinch Of Luck
There are a few other important ingredients to use on every product or service we’re trying to market to consumers — trust, quality content, and a pinch of luck.
Spacey spoke at Content Marketing World a few weeks ago. What he said there was similar to what he said at the Mactaggert lecture last year: the trust that Netflix gave the creatives of the “House of Cards” show was extremely important in the success. The trust they gave resulted in quality content. Watch how Spacey explains it from minute 3:23.
Quality content is one of the most important ingredients of success for Netflix. Without that, none of the 50 million subscribers would be watching the shows and nobody would subscribe in the first place.
As a marketer it’s important to create quality content and trust those that you hire for that. If you hire the best, they will deliver.
But with all the stuff Netflix does and all the things we as marketers do, there’s always one ingredient that you need: a pinch of luck. Things have to catch on and even though you can do everything in your power to make that happen, that little bit of luck can really make a difference.
Originally published at www.momentology.com on September 25, 2014.
