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The Netflix data advantage

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Netflix has been on quite the run over the last year. Its stock has exploded as its customer base nears 40 million. What's more, the company has positioned itself well with highly regarded original content and a strong foothold in the streaming business. Despite its success, complacent is not a word that one would use to describe Reed Hastings' company.

Netflix recently released a new UI, and a subsequent Wired piece on it is highly complimentary:

'[I]t looks pretty slick. While idling on any particular movie or TV show, a series of three static images from the media cycle in the background. It also spits out information about what Emmys/Oscars/etc. a show or movie has won and, if the user has connected their Netflix account to Facebook, it will show which of their friends also are fans,' says Chris Jaffe, the company's vice president of product innovation.

Does your cable TV service do this?

Neither does mine – and I don't expect that to happen anytime soon.

The new Netflix UI underscores the fact that the company possesses far superior show and movie data compared to Time Warner, Comcast and Cox Communications. And Hastings isn't afraid to use that data – and augment it whenever possible. (While its API is currently closed to new developers, third parties have already taken Netflix in interesting directions. As a result, Netflix understands its customers far better than large cable companies.)

Data: the Netflix advantage

Executives from cable companies claim that they aren't scared of Aereo, Netflix, YouTube, Hulu and other alternatives that enable cord-cutting. Take statements like these with a 50-pound bag of salt. What are they supposed to say? This has Innovator's Dilemma written all over it. Privately, I'd wager a good bit of money that the more progressive execs at cable companies are scrambling. Perhaps they're looking a potential partnerships with Netflix, as is rumored. I have my doubts about such deals. Cable companies can be extremely stubborn and Hastings will want to own the customer relationship – and the data behind it.

Simon says

Brass tacks: Cable companies need Netflix more than the other way around. Netflix shows that data can serve as both armor and a sword, to paraphrase from a Rush song. The most powerful companies today understand that.

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About Author

Phil Simon

Author, Speaker, and Professor

Phil Simon is a keynote speaker and recognized technology expert. He is the award-winning author of eight management books, most recently Analytics: The Agile Way. His ninth will be Slack For Dummies (April, 2020, Wiley) He consults organizations on matters related to strategy, data, analytics, and technology. His contributions have appeared in The Harvard Business Review, CNN, Wired, The New York Times, and many other sites. He teaches information systems and analytics at Arizona State University's W. P. Carey School of Business.

4 Comments

  1. Chris Hemedinger
    Chris Hemedinger on

    I've used my own "personal" Netflix data with SAS to gain insights into our own viewing habits. That's something that Netflix can do on a grand scale, while my view is obviously much more personal to me. I'd love for Netflix to open their APIs to more "micro-level" developers like this; we could create some cool mashups.

    • Phil Simon on

      Having researched the company for The Visual Organization, I'm amazed at what the company can do with data. You're right: Netflix makes comparatively little available to the general public. I know that I just touched upon the tip of the iceberg.