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Netflix credits ‘gut instinct’ with original programming success

Mon 18 Jan 2016

Reed Hastings

At today’s Digital-Life-Design conference in Munich, Reed Hastings, CEO of Netflix, stated that instinct is as important as data when it comes to decision making in the original programming arena.

A lot of attention has been paid to Netflix’s use of data analytics in creating original programming. In 2013 the New York Times reported the role of Big Data in the decision to produce a US version of House of Cards, as well as individually crafted marketing programs for viewers, based on existing viewer preferences. For example, an individual who watched Kevin Spacey movies on Netflix would see a trailer featuring him, whereas a viewer who had more female leads on their views would see a trailer featuring the female characters. Even then, Netflix insisted that the human element was as or more important than data in original programming. “We hire the right people and give the freedom and budget to do good work,” said Joris Evers, the company’s current Vice President, Head of Communications for Europe, Middle East and Africa.

Today, CEO Reed Hastings confirmed the importance of the human element in the decision making process. He called the combination of data analysis and gut instinct ‘informed intuition.’ He also referred to his head of content acquisition, Ted Sarandos, as ‘the man with the golden gut.’

There is concern about over-reliance on Big Data; that dependence on analytics alone could curb creativity and diversity in output. But to date, those concerns seem to be unfounded. In fact, the appeal of original content at Netflix seems to transcend predictable boundaries. According to Hastings, ‘Narcos’ (which centers around South American drug trafficking) is produced by a French studio and popular in Germany; ‘Atelier’ is set in Japan but has become an international hit.

Netflix announced yesterday that they would introduce over 600 hours of original content in 2016, with over 30 shows aimed at adults. This aggressive spending model ($6 billion for 2016), combined with some volatility in stock prices over the last six months has caused concern for the company’s overall profitability. But at yesterday’s Television Critics Association press tour, Sarandos stated, “The profitability of the company is mostly driven on our international expansion and pace, not on content specifically. People are finding value in how we are spending our content dollars by watching that content.”

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