Context

Netflix is an incredibly popular streaming offering, and was one of the first if not the first streaming apps available in what is now a crowded market. Netflix’s mission statement is to entertain the world and they do that through offering high quality TV Shows, movies, and even now games.

Product Goal

Netflix is a very mature product with a ton of both revenue and market share. As a mature product, we are going to focus on keeping our existing large user base happy and retaining them while simultaneously trying to increase monetization.

Focus on engagement, retention, and monetization

Metrics

• Total hours of entertainment consumed per week (Engagement

• Average hours of entertainment consumed per user per week (Engagement)

• Breakdown of total hours of entertainment consumed by category: Shows, Movies, and Games (Engagement)

• % of users who watch at least 2 hours worth of entertainment per week (Engagement)

• % of users who watch at least 2 hours worth of entertainment the week prior and did so this week (Retention)

• Monthly churn rate (Retention + Monetization)

• Average monthly revenue per user (Monetization)

• Total Monthly Revenue (Monetization)

Prioritization

1. Average hours of weekly Entertainment consumed per user -> Users may not watch TV or shows on a daily cadence but definitely on a weekly basis. Users are already engaged and using the product so we want to monitor this to make sure it doesn’t go down or else we’ve got a problem on our hands.

2. Monthly Churn Rate -> We already have a large user base so we want to make sure we are retaining them and not losing them to a competitor. Netflix bills on a monthly cycle.

   1. Our first metric above is a relative metric and looks at things on a per user basis. The metric could be increasing but users could be leaving the platform and it wouldn’t reflect that which is why monitoring our churn rate is also important.

3. Average monthly revenue per user -> As Netflix adds on additional services like gaming we would like to see our average monthly revenue per user go up as we focus on further monetizing our existing large user base.

Trade Offs / Concerns

While it is intentional, all of our metrics listed above are very high level and don’t offer much in terms of granularity. Product performance could vary greatly across different variables such as:

1. Geography

2. Content Type

3. User Personas

Summary

Netflix is a very mature product with a large user base and the revenue to accompany it. As such we are going to focus our efforts on keeping our existing users happy and trying to increase monetization when feasible. In order to help monitor our efforts in doing so, we’ll look at the following three metrics to guide us:

1. Average weekly hours of entertainment consumed per user

2. Monthly churn rate

3. Average monthly revenue per user

About netflix – Netflix is a subscription-based video streaming service for watchers

 

My approach will be to:

• Define the business goal from Netflix’s mission

• Break down the actions taken by users at each stage of the customer journey

• Set metrics for each user/stage Define 3 main metrics

 

The mission of Netflix is to entertain the world by providing exclusive and engaging streaming content to it’s subscribers

 

Goal – I think their goal is to engage more and more people and earn money to invest in services to engage more people on the platform (Engagement and revenue is the main goal of netflix)

 

User Actions

• sign up for the free period

• scroll recommendations

• search for something

• watch video/trailer, recommendations, collections

• create lists

• download

• subscribe for new upcomings

• come back next days

• open notifications

• subscribe for the paid version

These actions will fall under certain Mertic which are as below –

 

Acquisition & Activation

• sign up for the free period

• scroll recommendations

• search for some content

Engagement

watch video/trailer, recommendations, collections

create lists

download

subscribe for new comings

Retention

Come back next days

open notifications

 

Conversion/Monetisation

Purchase subscription

Renewing subscription

Now as per the goal engagement and revenue are the key metrics so I would list down top metrics in this category

1. Average watch time – Time spent on the platform by users/day This metric tells us how successful we are in entertaining users

2. DAU – Active users (who watch video/trailer, recommendations, collections -create lists -download -subscribe for new comings)

3. No of total subscribed users

4. Customer life time value (CLV)

5. No of renewed subscription

6. New V/S renewed subscription

7. Average session duration per user

8. No of session per user

9. Notification CTR

 

Out of these i believe first three Avarage watch time , DAU and No of active subscribed users will be first north start for netflix as these are more aligning with its goal