Netflix’s History of Innovation:

Let’s start with a brief history lesson. Netflix has undergone a continuous, two-decade long evolution to be revered — and feared — by the greater entertainment industry. It led to the demise of Blockbuster in the 90s with its new, convenient way to rent movies. By 2007, it had launched its streaming service, putting the cable TV and movie industry on edge. Ten years later, Netflix spurred “cord-cutting,” which has likely forced Comcast executives to ponder if its empire will suffer the same fate as Blockbuster.

House of Cards came out on February 1, 2013. What started as an interesting concept — a distribution platform creating its own content — we now know House of Cards was just the start of Netflix’s aggressive content strategy. In 2016 alone, Netflix released an estimated 126 original series or films. Netflix is vying to be the ubiquitous global entertainment hub, and looking at the Q1 2017 streaming habits of Netflix viewers, it’s not too lofty of a goal.

 

Stunning Conversion Rates:  

From eliminating the need to drive to your local Blockbuster, to instantly streaming reruns of The Office, to supplying enough content at a price point to help you ditch your cable provider, Netflix has a proven track record of understanding and serving its viewers. This understanding is the basis of its content strategy, as our analysis shows Netflix has used its long standing partnerships to lure viewers onto the platform, only to entice them to stay with its original content.

Looking at the streaming habits of over 700k devices in Q1 2017, we found that casual watchers, defined as those who only watch one title a month, overwhelmingly view non-original content.

Breaking the data out, we found:

  • Only 24 percent of single-title viewers on Netflix watch original content

We also found that this statistic completely flip flops as consumers become heavier users, because:

  • When Netflix viewers watch two titles per month, the ratio of viewing original to non-original changes: 72 percent of viewers watch Netflix original series.

That is stunning.

This indicates that the conversion rate from watching third party to original content is extremely high. As viewers become heavier users of the platform:

  • The percent of those that have watched at least one original title creeps up to almost 90 percent. That means 9 out of 10 “heavy” Netflix subscribers watch some kind of original content.

 

Santa Clarita Diet, A Series of Unfortunate Events, and 13 Reasons Why:

The growing audience of Netflix original series continues to draw in new users, and attracts a diverse subset of viewers. Looking at the consumption habits of Santa Clarita Diet, A Series of Unfortunate Events, and 13 Reasons Why, we found that viewers of Santa Clarita Diet take an average of 4.3 days to watch an entire season, while it takes just over six days to watch an entire season of A Series of Unfortunate Events.

Quantifying content consumption is less interesting than the behavioral traits detected through these viewing patterns. Contrasting the viewing habits of the three shows against online behaviors on Amazon Instant Video, Amazon, YouTube, and Spotify, we were able to identify unique audience “profiles.”

Key findings to highlight include:

  • Viewers of Santa Clarita Diet are 9x more likely to watch 10 Cloverfield Lane on rival platform Amazon Instant Video
  • A Series of Unfortunate Events fans are 6x more likely to purchase Fujifilm Instax Cameras and film on Amazon
  • 13 Reasons Why followers are 3x more likely to stream Ed Sheeran on Spotify

 

The Bottom Line: Netflix viewing habits aren’t arbitrary, and neither are your purchases on Amazon. What you prefer to stream online is directly associated with your other preferences in life, and extends to the products you buy, the songs you listen to, and the videos you laugh at. Putting these individual data points together into one cohesive narrative allows us (and anyone else in the marketing industry), to have a holistic view and understanding of consumers.