Netflix looks for an engagement update

Netflix is getting its groove back, with its Q3 results showing subscriber numbers growing once again.

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Netflix looks for an engagement update


The Future.  Netflix is getting its groove back, with its Q3 results showing subscriber numbers growing once again. That turnaround could partly be a result of the company refining its algorithm to find what content subscribers are genuinely hooked on — even if it’s not a bonafide hit. If Netflix gets even better at determining niche hits, it may not send subscriber growth skyrocketing, but it could ensure that its current subscribers don’t hit that cancel button.

Feedback loop
Netflix wants to get people binging on the whole platform again. WSJ reports on some of the changes the streamer implemented:

  • It’s refining how it measures “sticky” content (anything “watched for at least 75 minutes over the course of 28 days”) and combining that metric with how often a user fires up the platform per day.
  • It rolled out a double thumbs-up review feature to pinpoint not just what users like but love. If a movie or show gets a lot of double thumbs-up, it gets a “double thumbs-up bonus” inside the algorithm, making it more easily discoverable.
  • It’s considering updating its “Surprise Me” feature — which randomly plays something different from what a subscriber typically watches — by asking users to input what genre they want to watch.

The hope with the changes is to determine better what kind of movies and shows really hook viewers and get them coming back for more. With an internal survey finding that Netflix’s overall reputation is dropping among young and diverse audiences, the streamer is probably hoping to pinpoint what content will bring them back, especially as its ad tier starts to roll out.

On the up and up
After two consecutive quarters of dips in subscriber numbers and stock value, Netflix’s internal changes are starting to pay dividends, per the company’s Q3 report yesterday.

  • Netflix beat expectations and added 2.4 million subscribers (mainly in Asia), and beat revenue and earnings per share forecasts.
  • It also expects to add another 4.5 million subscribers next quarter.
  • Those results sent the stock up 14%.

Despite the subscriber growth, Netflix said that starting next year, it will no longer share subscriber forecasts as its “just one component” of the company’s health, especially as Wall Street becomes more focused on streaming profits.

While that’s true, the move could also hedge against depressed subscriber growth once it starts cracking down on password sharing… which Netflix has set the stage for with its new “Profile Transfer” feature, making the switch from free to paid as painless as possible

David Vendrell

Born and raised a stone’s-throw away from the Everglades, David left the Florida swamp for the California desert. Over-caffeinated, he stares at his computer too long either writing the TFP newsletter or screenplays. He is repped by Anonymous Content.


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