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Summary:

Netflix is taking a bold step, licensing the first exclusive show to stream through its service before appearing on broadcast or cable TV. But is the move as risky as some might think? Thanks to a large amount of viewing data, Netflix doesn’t think so.

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House of Cards, the new original series that has been licensed by Netflix, is a well-liked British miniseries based on a novel by UK Conservative Party Chief of Staff Michael Dobbs, reset against today’s American political backdrop, starring Kevin Spacey and directed by David Fincher. Given all that, it seem like House of Cards would have all the makings of a show a lot of people would watch, right? However, Netflix didn’t just rely on its instincts before choosing to license 26 episodes of the new series. Instead, it turned to big data to determine whether or not its users would be interested.

Licensing original scripted programming is a new strategy for Netflix, which primarily relies on content it gets from cable and broadcast programmers for shows that have already aired. At first glance, the deal may look risky for the company’s subscription streaming service: after all, Netflix generally has a good idea of how popular a particular show or movie is before it chooses to pay for it. Not so with House of Cards, which hasn’t even begun production yet.

But Netflix isn’t going into this blind. According to Steve Swasey, Netflix’s VP of Corporate Communications, the company looked at vast amounts of subscriber viewing data before making the decision to license the show. And the company expects that, once the series is actually available for streaming toward the end of 2012, it will also take advantage of that data to help suggest the new show to its subscribers.

“We have a high degree of confidence in [House of Cards] based on the director, the producer and the stars,” Swasey told us in a phone interview. But it’s not just conventional wisdom that the cast and director will make the new show a hit, he said. “We can look at consumer data and see what the appeal is for the director, for the stars and for similar dramas.” Swasey noted that House of Cards also has a predecessor on British TV, a miniseries that is available on DVD through Netflix and is pretty popular with subscribers. All of that data just confirmed what might seem like an easy decision for Netflix to make.

That data not only helped identify what could be a hit on the streaming service, but it will also help Netflix make the show a hit. Over the years, Netflix has built a robust recommendations system, which enables it to serve personalized content to the viewers that are most likely to watch it. Netflix will be leveraging that data and recommendations system to drive people to the new show, rather than spending marketing House of Cards through online and TV ads outside the site. Instead it will be able to target the show to users who watch a lot of David Fincher films, or have rated up a bunch of Kevin Spacey films, or even those who generally serialized dramas.

“We don’t have to spend millions to get people to tune into this,” Swasey said. “Through our algorithms we can determine who might be interested in Kevin Spacey or political drama and say to them, ‘You might want to watch this.’”

To learn about how other companies are leveraging stores of information, attend our Structure Big Data conference next week, on March 23 in New York City.

  1. Netflix provides a valuable service. Our family has 3 different NetFlix boxes in our home and usually will rate most of the shows we watch. Giving a show or movie a 5 star rating usually helps us to find new movies/shows that NexFlix has ‘Recommended’ to us. Interesting to read how they are using those ratings we submit.

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  2. I hope Netflix doesn’t rely too much on the “data” when selecting new programming.

    If it were that easy we would see more hit shows. The problem is the data is in the rear view mirror. And the next big hit is out the windshield.

    Red flags go up when they tout big names in a new tv show. Don’t think they have a good track record.

    Still love the direction. HOpeful for the new show. Netflix has spoiled us.

    And for the record I like AMC’s tv production direction. They are doing higher quality shows for much less than the networks.

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