It all comes down to how they use their data.
When companies like Netflix and Amazon Studios decide to create a television show, they can’t take the decision lightly. Great and addictive shows will make them massive amounts of money while mediocre shows clog up viewers’ options and can prove costly.
How do they choose what shows to create? Well, it depends on the company. According to Sebastian Wernicke’s Ted Talk, How to use data to make a hit TV show, Amazon studios begins by evaluating a whole bunch of ideas and choosing eight to create a pilot for. These are then put online for free and, since everyone loves getting things for free, millions of people around the world watch them.
What viewers may or may not know is that they are being watched in turn. Amazon Studios can analyse where viewers pause videos, where they skip parts, and whether they watch any parts over again. When combined, this data is what the company goes by when choosing what show to make a complete season of.
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On the other hand, Netflix uses data that they already have. “They looked at all the data they already had about Netflix viewers, you know, the ratings they give their shows, the viewing histories, what shows people like, and so on. And then they use that data to discover all of these little bits and pieces about the audience: what kinds of shows they like, what kind of producers, what kind of actors.”
Both methods sounds pretty similar, right? Unfortunately for Amazon Studios, Netflix has been having more success. The example that Wernicke gives is Alpha House versus House of Cards. I will hazard a guess that you may or may not have heard of the first, you have almost definitely heard of the second.
It is important to understand why this kind of data analysis sometimes works better than others because similar methods are used outside the television industry. “They connect all of these millions of data points, and then it works beautifully for one of them, and it doesn't work for the other one. So why?”
Wernicke’s hypothesis is that data can only take you so far. Using data to get an understanding of your audience and what they like can be incredibly useful, but humans as decision makers also need to be part of the equation. We keep building smarter and smarter computers, but live people come with intuition and an ability to make connections.
“I find that a very encouraging message,” says Wernicke, “in fact, that even in the face of huge amounts of data, it still pays off to make decisions, to be an expert in what you're doing and take risks.” Maybe that’s why robots haven’t taken over the world just yet.
Watch the TedTalk video below: