MAD Perspectives Blog

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 Creativity is Dead - Long Live Data Driven TV?

Peggy Dau - Monday, April 01, 2013

Earlier this month Netflix released its Q4'2012 financial results. They beat the "street" forecast for subscriber growth and revenue. Yet there are relevant concerns about Netflix's ability to sustain both metrics. This makes the success of their production and release of "House of Cards" even more compelling. Netflix's goal is simple - improve customer acquisition. The strategy to achieve the goal is more complex. It's all about the content. Netflix is known for its streaming content. They are dependent on relationships with content producers such as Disney, CBS, Fox and Lionsgate to stream popular series and drive longtail revenue for the producers of these series. However, Netflix is changing the game by entering into deals for original content such as "Lilliehammer", "House of Cards", new "Arrested Development" episodes and the recently announced "Sense8"

Netflix is a perfect example of data driven content decisions. Unlike their broadcast brethren, Netflix does not depend on Nielsen to measure the success of a program. They can accurately measure how many people watch a program, in full or in part. Their content decisions are based on how many people they think will watch a program as part of their subscription. In the case of "House of Cards", they used data such as 

     - what types of subscribers watched the original BBC series

     - how did subscribers watch - on TV, online, on a mobile device/tablet?  And, did they watch it straight through or did they pause, fast foward or rewind the content?

     - when & what did subscribers watch

     - what content did subscribers watch that involved the proposed actor, Kevin Spacey?

The Netflix advantage is their direct relationship with their subscriber base.  They have access to data that can influence actor selection, plot, special effects, location and more. Netflix can also choose how to release the series. In the case of both "Lilliehammer" and "House of Cards", Netflix chose to release the entire series at the same time. The result was binge consumption of the addictive programs.

Why is this relevant to the media industry or other industries? It is an example of how data reveals customer behavior and desires. With the insight that can be gained through the capture and analysis of data, brands can create content that compels customers to take action. Those actions will, ultimately, result in increased revenue. The conundrum for creative types is to strike the balance between inspiration and customer demand.

All the data in the world is useless if we can't make any sense of it. We can capture demographics, usage behavior, interests, buying patterns, etc. Thanks t our voluntary sharing of information via social networks and search engines, their is an astounding amount of customer data available.  This allows us to add context to the formerly stark data we've been collecting for years. We can see influences and understand rationale behind choices made.

In the media industry, we've seen the rise of formulaic vampire programs thanks to the popularity of "The Twilight Saga". Sure, these programs attract viewers and the related, necessary, advertising revenue. What viewer need do they fulfill?  Are they original? Or, does that even matter? Does the rise of data driven content creation improve the quality of content?  Honestly, I doubt it (although I did enjoy "House of Cards"!). Data driven content provides content producers with the ability to more accurately forecast their financial return. Media & entertainment is a business. However, I'd just like to believe, even for a few moments, that truly original content is still appreciated.

What's your perspective?