Inside Netflix's "binge factory," which has upended television by replacing demographics with "taste clusters"

Vulture

According to Josef Adalian's deep dive into Netflix, the streaming service relies on "taste clusters," described as "predicating programming decisions on immense amounts of data about true viewing habits, not estimated ones. It has discovered ways to bundle enough niche viewers to make good business out of fare that used to play only to tiny markets." “Nothing is too niche,” says Netflix chief content officer Ted Sarandos. “It’s just relative to what it costs. We can put a smaller show on the air and support the economics through subscriptions, but it’s not infinite. Eventually, there’s opportunity cost.” Adalian adds: "Mysterious though it may seem, Netflix operates by a simple logic, long understood by such tech behemoths as Facebook and Amazon: Growth begets more growth begets more growth. When Netflix adds more content, it lures new subscribers and gets existing ones to watch more hours of Netflix. As they spend more time watching, the company can collect more data on their viewing habits, allowing it to refine its bets about future programming." Or as Sarandos puts it, “more shows, more watching; more watching, more subs; more subs, more revenue; more revenue, more content."