Netflix saves $1B annually using Artificial Intelligence

by user

Netflix saves $1B annually using Artificial Intelligence

by user

by user

Netflix, the world’s most popular subscription-based video streaming service, is known for using many Artificial Intelligence enabled services to provide better customer experience to their users. The most popular among these is it’s content recommendation engine that suggests movies and series to users.

In an academic paper by Netflix’s chief product officer, they mentioned that, Netflix saves around $1B every year through combined effect of personlisation and recommendation.

Netflix found that, a typical user who searches for content loses their interest after 60 – 90 seconds of searching. Here the problem is that, if the user is not able to find an interesting content within that time, the risk of abandoning the service is pretty high.

That’s where the role of recommendation engine is critical. It predicts contents that the user might be interested in, based on several factors and presents to the user in few seconds. This prevents the user from abandoning their service due to “non-availability” of interesting contents.

By calculating the number of users who might leave because of the above reason, Netflix estimates it to be around $1B or more every year. That’s why the AI based recommendation engine is worth a lot to the company.

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