“There’s a whole thing going on in Netflix right
now and in Silicon Valley saying, ‘We’re going to
use algorithms to make creative decisions.’ I say
‘posh.’ You can’t. It’s not like making a comput-
er program that can work in the fixed and formal
rules of chess.”
—John Landgraf, CEO, FX Networks
Is big data a help or a hindrance to creativity? I had the chance to explore the topic with Michael D. Smith, a professor of information
technology and marketing at Carnegie Mellon’s
Heinz College and Tepper School of Business
and the author of Streaming, Sharing, Stealing:
Big Data and the Future of Entertainment, cowrit-ten with Heinz College professor Rahul Telang.
Netflix has a lot of data about what we like
to watch. It began collecting data years ago,
when it was in the business of sending DVDs
through the mail. It turned to that data when it
began commissioning original movies and series. It was able to make smart decisions about
what genres, directors, and actors we wanted
to see, and how to fund each project based on
That approach has led to some critics, like
FX’s Landgraf, accusing Netflix of programming by algorithm, of replacing intuition, experience, and Hollywood know-how with a computer routine. To critics, the Netflix formula
produces hollow results and ignores the value
of the creative process.
What Smith and Telang show in their work
is that Netflix doesn’t use data for creative decisions; it uses data to match content with viewers. Netflix is excellent at getting out of creative
peoples’ way, Smith says. Unlike studios, it lets
its talent do its work without a lot of notes or
advice. When projects are completed, it uses its
data to match them with viewers who will mostly likely enjoy them.
Doing so not only drives views, it also helps
with discovery. Netflix churns out a lot of orig-
inal content, and subscribers could easily feel
overwhelmed if they had to wade through it
all. But they don’t—they only see the titles Net-
flix is pretty certain they’ll like.
It’s something the big broadcasters can’t do,
Smith notes. Broadcasters can only show one
program at a time, so they go with whatever
they expect to get the biggest return in each
slot. Netflix doesn’t have to turn every show
into a blockbuster, so it’s free to create niche
hits that appeal to specific groups. The power
of Netflix’s data is in microtargeting.
With that in mind, Netflix’s four-picture deal
with Adam Sandler starts to make more sense.
Hollywood creatives have been surprisingly vocal about their dislike of Netflix. Consider
that Steven Spielberg joined the Netflix hate
squad in March, saying Netflix output should
be considered TV movies and not be eligible
Some of this comes from wanting to protect
the traditional theater model or the glamour
of a theater opening. Some people look at Netflix’s data and think it has an unfair advantage.
“Netflix can do things that would be very
difficult for Hollywood to copy,” Smith says.
“There’s a quote that we use in the book where
[Netflix chief content officer] Ted Sarandos is
sitting around a table of TV execs and he says,
‘The difference between my business model
and everybody else here is that we can hit
singles and doubles and the business is just
fine.’ I think what he’s saying is the traditional business of Hollywood is, blockbusters are
everything. You’ve got to have the blockbusters. It’s hard to sell a piece of niche content in
any of the existing channels. What Ted Sarandos is saying is that we can sell niche content.
If I can find an audience who likes this and is
going to subscribe next month, it doesn’t have
to be a big audience. I just have to be able to
In the 2018 Oscars, Netflix had two big winners, Mudbound, which was nominated for four
awards, and Icarus, which won best documentary feature. Both were movies Netflix acquired
rather than commissioned, but the company
Netflix Uses Data
to Drive Creativity, and
It’s Terrifying Hollywood