Over 10 years we helping companies reach their financial and branding goals. Onum is a values-driven SEO agency dedicated.

Marketing Product Management

How Netflix Became a $100 Billion Company using Data Science

people sitting on a couch watching

N Netflix has over 183 million subscribers, and these numbers are growing both consistently and exponentially. Even though Netflix took some bold and controversial steps in the past years, as its decision to flat out block VPNs in the year 2016, and a much-opposed prize hike in the same year — -thus losing a huge chunk of its subscribers — -it still came out as the largest subscription streaming platform.


All the credit goes to data science: big data and algorithms.

“As Thomas Redman said, “Where there is data smoke, there is business fire.”
– Thomas Redman


Netflix is the largest subscription streaming service today. It uses data science to not only gain new subscribers but also to enhance the user experience of the existing ones. Netflix knows what its subscribers want to watch, even before the subscribers themselves. Thanks to data science.

Netflix is the largest subscription streaming service today

It uses various traditional business intelligence tools, along with big data technologies to come up with revised algorithms that enhance the user experience, and thus its profit. Shows like House Of Cards and Orange Is the New Black was not gambled, but the results of well-synthesized data. Personalized watch lists and artworks are the secret ingredients.

Some mind-boggling facts

  • Thanks to its algorithms, Netflix saves an estimated 1 billion dollars every year!
  • Back in 2006, a DVD mailing company launched the Netflix Prize. It offered 1 million dollars to anyone or any group who could create the best algorithm for determining how the subscribers would like any show or movie based on the previous ratings.
  • 80% of the content streamed on Netflix is based on a recommendation system.
  • It made swooping 20 billion dollars in 2019 alone. Credits? Data science.
  • 49% of its users are paying for their subscriptions; that is, they are not sharing passwords and accounts. The majority of the users pay for their subscriptions.

After going through all these facts, you probably might be wondering, how come an average DVD mailing company grew up to be such a huge success — the largest and most significant of its kind. Keep reading, and you’ll find out soon.

“Big Data is not about the data. It is about analytics.”
Gary King (professor at Harvard)

How Netflix harnesses excellent user experience and dollars from mere stacks of data

Although data is a primary need, data without proper processing is mere piles of useless information. The real game begins when you process this data to yield useful insights that bring both customer satisfaction and profit.

Netflix uses various traditional business intelligence tools (like Teradata and MicroStrategy) and combines them with big modern data technologies such as HadoopHive, etc. It thus forms algorithms that predetermines what the users are most likely to watch. It also uses much open-source software for the same. So basically, what matters more than just having the data is knowing how to channel it to give favorable outcomes, both for your business and for the customers.

“Big data means both more and less to a data science team. It’s more storage than you’re used to handling, so you need to look to alternatives. It’s more processing than you’ve ever had to do before. It’s more skills that you need to find correlations and surprises. A lot of tools that can handle this kind of analysis don’t work like you might expect them to. It’s a new world, and you need to explore it in ways that work for you.”

Justin Ward (manager of the data science and engineering team, Netflix)


Siva B

I Build Products that Transforms Businesses & Empowers People 🚀 | Creative Storyteller | Product Enthusiast | Pitch Deck Specialist | Growth Hacker

Leave a comment

Your email address will not be published. Required fields are marked *