How do streaming services leverage data analytics in decision making?

Data analytics can help most businesses make better decisions. Netflix, the leading streaming service provider, has over 167 million subscribers worldwide and the industry’s highest customer retention rate. At the heart of Netflix’s success is a business model built around leveraging data analytics to inform every business decision it makes. To understand why data analytics plays such an important role in streaming services, let’s start with a few of the fundamental questions related to OTT media services and the field of data analytics.

What is an OTT media service?

An Over the Top (OTT) media service is any streaming media service that provides viewers with access to content through the internet with no cable box, antenna, or satellite receiver required. Per Wikipedia:

“OTT also encompasses a wave of “skinny” television services that offer access to live streams of linear specialty channels, similar to a traditional satellite or cable TV provider, but streamed over the public internet, rather than a closed, private network with proprietary equipment such as set-top boxes.”

What are the top OTT streaming services?

Subscription-based video-on-demand (SVoD) services are a highly competitive market. Parks Associates, a market intelligence and research company, rank the 2019 Top 10 US Subscription OTT streaming services:

  • Netflix
  • Amazon Prime Video
  • Hulu
  • HBO Now
  • CBS All Access
  • Showtime
  • MLB.TV
  • ESPN+
  • Sling TV

Other popular OTT streaming services include Apple TV Plus, AT&T TV Now, Disney Plus, FuboTV, YouTube TV, and the recently launched Peacock from NBC/Comcast.

How do streaming media services leverage data analytics?

Because OTT streaming media services are subscription-based, they rely on customer retention to be profitable. Data analytics is used to evaluate real-time and historical data to drive recommendation engines, inform new content development, create predictive modeling for customer churn, and provide a range of other business insights to increase customer loyalty and lifetime value.  

What are the top data analytics services used by streaming media providers?

The majority of OTT streaming media providers use Amazon Web Services (AWS) to warehouse data. According to Amazon, “Netflix uses AWS for nearly all its computing and storage needs, including databases, analytics, recommendation engines, video transcoding, and more—hundreds of functions that in total use more than 100,000 server instances on AWS.” Other top streaming media services that leverage AWS analytics services include Hulu, HBO Now, Disney Plus, and of course, Amazon Prime Video.

In addition to AWS analytics services, OTT providers also use a range of analytics tools, including Hadoop, Spark, Presto, Hive, and Pig. For big data analytics Netflix also offers Genie an open-source tool to handle massive amounts of data at scale.

How do streaming services use data analytics to inform business decisions?

Data analytics provides streaming services quantitative insights on every aspect of business operations and enables the OTT to make better decisions faster.

This Netflix TechBlog article provides an inside look at the critical role that data analytics plays to inform business decisions:

“Data is used to inform a wide range of questions — ‘How can we make the product experience even better?’, ‘Which shows and films bring the most joy to our members?’, ‘Who can we partner with to expand access to our service in new markets?’. Our Analytics and Visualization Engineers are taking on these and other big questions for the company, informing decision-making across every corner of the business.”

How does predictive analytics drive personalization?

Predictive analytics is one of the fundamental elements of data analytics. OTT media services use predictive analytics in every aspect of business decision making, including:

  • Content development
  • Recommendation engine results
  • Marketing and promotions
  • Customer retention strategies
  • Technical optimization

How can data analytics help your business?

Analytics is not just for OTT media services and Fortune 500 companies. Data analytics can help every business leader in any industry. Forbes reports that 59% of enterprises use data analytics in some capacity. When asked about the benefits of data analytics in a recent survey from Deloitte, 49% of respondents asserted that using analytics is that it is a key factor in better decision-making capabilities. Nearly two-thirds of respondents said that analytics play an important role in driving business strategy.

What does a data analytics consultant do?

Data analytics consultants work with clients to leverage the right data technologies and help business leaders translate massive amounts of data into actionable insights and effective growth strategies. Having an experienced data analytics partner such as will help you make sense of your organization’s existing data and set your business up for success.

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