How is Netflix Using Data to Create a Personalized User Experience?

The overwhelming ruler of streaming entertainment is now Netflix. The company boasts an astonishingly low 9% turnover rate, over 100 million subscribers, and even more people who still use their friends’ contact credentials (by far the lowest of any streaming service). How did Netflix become the top entertainment destination around the globe and keep its users glued to their screens? As many other streaming sites use VPNs to stream in countries for example 9Now is a streaming site in Australia but to watch 9Now anywhere outside Australia you first need to download a VPN. Big data utilization, analysis, and application, of course! Here are strategies Netflix employs to dominate the streaming entertainment market, along with advice on how you might do the same.

Individualized Recommendations.

In a variety of ways, Netflix uses data to better understand every viewer. They endeavor to comprehend what their users want and give it to them as quickly and as easily as they can. They utilize a variety of tactics to accomplish this. Of course, they track the film or television program a viewer viewed, but that makes up a relatively small amount of the data they accumulate. They track searches when a show or movie was seen (e.g., on a computer, a TV, or a phone), the device used to view it (e.g., if it was paused, skipped, or rewatched), and whether these actions were taken. Customers of Netflix can rate the content they streamed.

All of this information is used by Netflix to create a sophisticated algorithm that tailors viewing recommendations for each consumer. Since 80% of the video streamed comes from one of Netflix’s recommendations, this is critically vital to the company’s operations. Netflix has essentially leveraged its data to make sure they have “repeat subscribers.”


While Netflix uses personal information to customize each customer’s recommendations, they also examine their data on a larger scale to determine what series are trending. The Trending row at the top of Netflix’s site serves as a guide for users on what new shows to watch. Additionally, this information aids them in deciding which programs to keep and which to eliminate from their service when it comes to programming retention. Real-time data, which can be incorporated into any business plan, regardless of industry, gives Netflix the assurance it needs to make choices swiftly.

Authentic Material

Netflix has transitioned from a gateway for streaming content from other companies to a dominant force in original programming, with hit shows like Stranger Things, Full House, House of Cards, and Orange Is the New Black accounting for a substantial chunk of their total viewership. Their analysis of the data guides the selection and production of original ideas. The information they gather offers a very clear picture of their audience, what they are pursuing, and how much of it they desire. As noted by Zach Bulygo:

These privileges are not available to traditional television networks when they broadcast. Netflix has an advantage over other companies since it can get to know its customers personally rather than merely having a general “persona” or “concept” of who they are.

Additionally, Netflix uses data on user pauses, skips, and rewatches to inform their original storytelling in addition to using it to inform the greenlighting process. Netflix has a competitive advantage over the more established firms in their market thanks to their abundance of data, which also empowers them to forge ahead confidently into unexplored territory.


Additionally, Netflix uses this information for promotional purposes. You may have noticed that your favorite show’s graphics occasionally shift. This isn’t a coincidence. When deciding which image to use and when to modify it, Netflix leverages data. For instance, the “product team at Netflix put up an image to market the show to U.S. users that exclusively featured Ms. Fonda’s co-star Lily Tomlin for their original series, Gracie and Frankie. Tests revealed that when Ms. Fonda was absent from the shot, more users clicked on the show. Although this was ultimately reversed because of Jane Fonda’s contract (and to preserve their relationship with the show), this serves as an illustration of how Netflix uses data to make informed judgments.

This lesson may be used by businesses to boost customer engagement by A/B testing different kinds of content, graphics, and messaging. 

Financial Gain

Since Netflix is first and foremost a business, its use of data must also contribute to its economic success. It would be an enormous understatement to claim that they are succeeding. The staggering “$1 billion a year in value from client retention” that Netflix’s algorithms save them. Their data also enables them to charge a price that provides the highest value for their viewers at a price that is beneficial to both the client and the business. This income is reinvested in refining the content and data algorithms that have catapulted Netflix to the top spot in streaming entertainment.


From a larger viewpoint, Netflix is a business in addition to being a purveyor of media services. Consumer base and cash flow are both crucial for any firm to grow and have an impact. It is unnecessary to emphasize that Netflix makes money through its membership fees, making it increasingly crucial to offer the best possible value for subscribers’ money.

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