Foxtel Presto video
VIDEO-ON-DEMAND services will deliver a new era of entertainment this year, and one of the biggest battles will be fought over predicting what users want to watch.
In March, American heavyweight Netflix will enter an Australian market already serviced by Presto (Foxtel and Seven West Media), Stan (Nine Entertainment and Fairfax Media), and Quickflix.
All players agree assessing users’ past patterns and tastes, and helping them find what to watch from thousands of options will be key to securing this new online audience.
Presto director Shaun James says his service will be using lessons from its previous movie offering and from the use of the Foxtel Go app.
One option ... Presto is keen to secure a strong online audience. Picture: Supplied Source: Supplied
“We’ve learnt a lot in the last nine months about consumer behaviour, about what holds people in there and no doubt we’re going to learn a lot more as we move forward into the launch of TV,” Mr James says.
“One of the things that Foxtel does well and that we will translate and take into Presto is our ability to curate content.”
Mr James compares video-on-demand services to streaming music services that lure customers in with promises of “millions of tracks” but he says that’s only half the story.
“I think consumers can get lost in that and one of the things that we have learnt from a Foxtel perspective is that the way that we curate, the way that we present, the way we introduce content to people is very, very important,” he says. “It’s something we’re continuing to learn about in terms of people’s behaviour.
Popular overseas ... Netflix is coming to Australia this year. Picture: AP Source: AP
“Certainly Netflix has developed this thing in multi-territories over multi-years and it’s a very sophisticated algorithm.”
In fact, Netflix’s algorithm is so advanced it almost defies comprehension.
While many services use common terms to describe movies and TV shows, one study cited nearly 80,000 Netflix “micro-genres” which go far beyond standard descriptions to terms such as “period pieces about royalty based on real life”.
Netflix estimates up to three quarters of what people watch on its service is a result of its recommendation system, on which the company spends $150 million a year.
Netflix product innovation vice-president Todd Yellin says without an advanced system, customers would easily get lost.
Netflix on Streaming 4K Video video
“With more and more content comes more and more choice,” Mr Yellin says. “With all these hundreds or thousands of movies and TV shows to choose from we want to make it easy and not burdensome.
“Underneath the hood we drive hard to improve our algorithm. The algorithm uses a massive amount of data about users — what they watch, when they watch, how much stuff they watch, the velocity they watch in, what devices they watch on.”
Using this information, Mr Yellin says, one user’s recommendations in the romance genre might be very different from the next person’s.
Mr Yellin says “only 20 per cent of Netflix members are really into critics” recommendations, with most relying on the service’s software.
Stan chief executive Mike Sneesby says, as a new player, his service will be adding editorial curation as well as software-driven curation.
Mr Sneesby says despite its size, the Netflix recommendation system still has limits.
“I think people expect it to be a lot more magical than it is. At the end of the day, it’s still a computer that acts off data points,” he says.
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