How Netflix Uses Machine Learning (ML) and Algorithms to Power its Recommendation System

How Netflix Uses Machine Learning (ML) and Algorithms to Power its Recommendation System

In today’s era, Netflix is known to be the go-to streaming platform for series and films. However, most individuals are unaware that the platform was introduced in the late 1990s with a subscription-based model, sending DVDs to customers’ homes in the US.

Netflix operates on a subscription-based model. Put simply, the more users the platform has, the higher its revenue. Moreover, the overall revenue can be seen as a function of three things:

• The rate at which people join
• The acquisition rate of new members
• Cancellation rates

How Important is the Recommendation System of Netflix?

Netflix gains most of the stream time (80%) through the platform’s recommendation system, which is an incredible number. Besides, the platform considers that providing a great user experience will lead to a better retention rate, leading to savings on customer acquisition.

This is How the Recommendation System Works

Over 80% of the content people watch on Netflix is found through its recommendation system. Does this mean that most of the shows you decide to watch on the platform result from smart suggestions made by an algorithm? Let’s dive deep into it!

Netflix leverages machine learning (ML) and algorithms to help users’ preconceived notions and discover content that they might not have previously watched. To achieve this, it looks at threads within the content instead of depending on broad genres to generate predictions. This demonstrates how one in eight users who watch one of Netflix’s Marvel series are recommended to watch comic book-based series on the platform.

To dive deeper into it, think of a three-legged stool. These legs are the Netflix users; taggers who know everything about the shows; and the ML algorithm that extracts data and puts things together. While the platform has more than 100 million users globally, if the multiple user profiles of every person are taken into consideration, this…