What is Big Data
In the recent years we’ve seen an explosion of data from web traffic, email messages, social media content and more. This data includes text, photos, audio, video and other formats, and is not suitable to fit into rows and columns of relational database products.
There isn’t one definition of big data, and the term keeps evolving, but we can say that it concerns huge sets of structured, unstructured or semi-structured data, usually not suitable for relational database management systems. The term does not refer to any specific quantity of data, but usually refers to terabytes, petabytes and exabytes of data.
Big data is getting more and more important topic as it can reveal more patterns and information than smaller data sets, with huge potential to provide new insights. But with the opportunities come challenges, as big data requires new technologies and tools for managing and analysing to derive business value from these data.
Big data can be characterized by 3Vs:
- the extreme volume of data – terabytes, petabytes and hexabytes of storage systems
- the wide variety of types of data – data comes in number of different types and formats and in order for it to be usable organisations have to make it meaningful
- the velocity at which the data must be processed – data growth and social media explosion have changed how we look at data and consider it recent, unlike in the past, data movement is now almost real time.
Big Data Analytics
Big data analytics is the process of examining large data sets containing a variety of data types to uncover hidden patterns, unknown correlations, market trends, customer preferences and other useful business information. Without analytics companies wouldn’t be able to take advantage of their big data.
Big data technologies (such as Hadoop and cloud-based analytics) bring significant cost advantages when it comes to storing large amounts of data and they can identify more efficient ways of doing business. With the speed of the tools and their ability to analyse new sources of data, businesses are able to analyse information immediately, and make decisions based on what they’ve learned. Thanks to the ability to recognize customer needs and satisfaction through analytics businesses now have the opportunity to give customers what they want.
Big data has the potential to be extremely valuable for companies and is becoming one of the most valuable assets. The analytical findings can lead to more effective marketing, new revenue opportunities, better customer service, improved operational efficiency, advantages over competition and other business benefits.
Netflix driving their business with big data
Netflix is one of the companies making informed decisions using big data. Data and analytics is taken really seriously there and used across every aspect of the business.
With 75 million customers worldwide Netflix has huge amount of data, and using it helps them make more informed decisions to provide these customers what they are looking for.
Internet streaming gives them the advantage of being able to see more than traditional television networks. They have visibility of their customers’ browsing behaviours, time spent searching and selecting movies, ratings given to specific movies, days and times moves are watched, or when users rewind or pause movies, if they ever come back etc. They also collect end-user data, like delays in buffering or bitrate (when your screen turns blurry), for analysis to ensure best possible service.
It not only helps them provide users with personalised recommendations, but more importantly they use the information derived from data analysis to predict what their customers want to watch, so is a key when it comes to selection of movies and tv shows offered to the audience.
Netflix also invests in creating new content and decisions made in this area are also strongly supported by data analytics. Success of their show House of Cards illustrates it. When deciding to buy it Netflix already knew that show directed by David Fincher, starring Kevin Spacey and based on popular British series will be successful thanks to analysing the data they already had. They knew that their subscribers streamed Fincher’s movies and watched them from beginning to end, movies starred by Kevin Spacey had always done well, and that the British version of the show was popular. Based on that information, Netflix decided to put a high bid and bought House of Cards.
Netflix also used data when promoting the series, and they used it to create several trailers so that Kevin Spacey’s fans saw trailers featuring him, those watching many movies starring women saw trailers featuring the show’s female characters and David Fincher’s fans saw trailers featuring his touch.
Their strategy appears to be successful with the company’s growth over the years, and using big data and analytics Netflix positioned themselves as the leader on the movies and TV shows streaming market.
LAUDON, Kenneth C., LAUDON, Jane P., 2014. Management information systems : managing the digital firm. 13th. Pearson Education.