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A Netflix user will browse the app for 90 seconds and leave if they find nothing.

Thumbnail artwork is actually NFLX's most effective lever to influence a viewer's choice. A user will look at one for only 1.8 seconds, so NFLX spends huge to optimize them.

Here's a breakdown🧵

 1/ Spoiler alert: humans are visual animals.

Our eyes move 3-4x per second to process information and we can analyze an image in as little as 13 milliseconds.
2/ In 2014, Netflix consumer research showed that thumbnail artwork:

◻️ is "the biggest influencer...to watch content"
◻️ is the focus of 82% of browsing time

A user looks at one for only 1.8 seconds. If they can't find Netflix content in 90 seconds, they'll leave the app.
3/ Consequently, Netflix uses an elaborate thumbnail selection process for each of its 200m+ users.

The process is called aestethic visual analysis (AVA), which starts by pulling all the frames from a video.

For reference: a 1hr episode of "Stranger Things" has 86k frames.
4/ In a process known as "Frame Annotation", each frame is tagged with metadata identifying key variables:

◻️ Saliency
◻️ Frame #
◻️ Brightness / Contrast
◻️ Nudity probability
◻️ Face / skin tone
5/ The frames are then graded on these variables.

◻️ Visual (brightness, contrast, color, motion blur)
◻️ Contextual (face detection / shot angle)
◻️ Composition (photography principles like "rule of thirds", symmetry, depth of field)
6/ The next step is "Image Ranking", which chooses the best thumbnails (most likely to be clicked).

Winning traits include:
◻️ Expressive faces
◻️ Main characters
◻️ Brightness

For "Unbreakable Kimmy Schmidt", Netflix research showed the bottom right frame as the "winner".
7/ Another winning trait is good localization.

The best thumbnails (green arrow) for each country for the show "Sense8" had attributes most attractive to that specific region.
8/ Also: thumbnails with villainous characters outperform.

Netflix says these bad guy thumbnails (green arrow) for "Dragons: Race to the Edge" are the most clicked.
9/ One last finding: Netflix discovered that thumbnails with more than 3 people vastly underperform.

Netflix applied this knowledge for the rollout of "Orange Is The New Black". Season 2 has only one character in the thumbnail (vs. an ensemble for Season 1)
10/ One reason Netflix started creating its own thumbnails is that the artwork provided by studios weren't optimized for the streaming app.

The creative work Netflix received was meant for other mediums like billboards or DVD covers.
11/ At the most basic level, Netflix applies ML to select a thumbnail for you based on recent watch history.

Take "Good Will Hunting" as an example:
◻️ Rom-com watchers get the top thumbnail ("a date")
◻️ Comedy fans get the bottom thumbnail (with Robin Williams)
11/ Here are different Netflix thumbnail selections for "Pulp Fiction":

◻️ Uma Thurman fans get the top thumbnail
◻️ John Travolta fans get the bottom thumbnail
12/ Unsurprisingly, Netflix also A/B tests the thumbnails it shows users. The artwork is constantly changing.

Here is a sample of thumbnails for the film "The Short Game" and how each performed:
13/ As with any ML algorithm, results can be curious. In 2018, Netflix was accused of creating artwork based on race.

For a majority caucasian film "Like Father", one Black user was served the right image. Netflix said it makes artwork only on viewing history (not demographics).
14/ A less harmless example of thumbnail optimization is showcasing trending actors / actresses for content they played a smaller role in: https://t.co/CxxxojgTiR
15/ Back to the Squid Game thumbnails from the 1st tweet. They don't really follow any of the artwork "rules".

Then again, those are only 3 that I saw out of 1000s of other options.

And Squid Game is about to be NFLX's most popular original series ever, so something's working.
16/ If you enjoyed that, I write threads breaking down tech and business 1-2x a week.

Def follow @TrungTPhan to catch them in your feed.

Here's a one that might tickle your fancy: https://t.co/aq0K6wH5HE
17/ Sources

Vox: https://t.co/9wfes7TVv0

Thumbnail controversy: https://t.co/lbGNEVoBwR

Netflix internal docs are a must read

1: https://t.co/tQVfTMMWb6
2: https://t.co/gbiSHWqTbK
18/ I also discuss interesting topics like this once a week (with a healthy dose of dumb jokes) on the Not Investment Advice (NIA) podcast.

Subscribe here: https://t.co/Xd53bnWzlD
19/ Last image: Here's what Netflix's home screen looks like with ZERO thumbnail artwork.
20/ One more factoid: Netflix’s revenue per employee is an insane $2.6m.

More than:

◻️Apple ($2m)
◻️Alphabet ($1.4m)
◻️Microsoft ($877k)

(Apple obvi crushes profits and FCF, though)
21/ @netflix is def one company where this meme doesn’t apply: https://t.co/vDt4hEngjW

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1/ Starbucks is all about positioning

The chain has higher prices vs competitors. But that's the point.

People typically assign higher value/quality to higher prices. Known as "irrational value assessment", this makes Starbucks an everyday luxury that people will pay for.


2/ Premium brand = premium customer base

By setting its prices higher, Starbucks attracts clientele that are relatively price insensitive.

Starbucks frequently raises its prices with little negative effect to its bottom line.


3/ "More than coffee"

Former Starbucks CEO Howard Schultz created the premium feel by emphasizing experience:

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4/ Lighting and visual cues

The Starbucks operations is about "flow", efficiently moving people around the store+ getting them to spend.

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Here’s how it happened 🧵


1/ Amazon doesn’t break out its ad business separately in financial filings. However, most analyst believe ads make up the majority of its “Other” revenue segment.

This figure has exploded from $1B in 2015 to a current annual run rate of ~$32B.


2/ In 2009, Bezos said “ads are the price you pay for a crappy product”.

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Two former Amazon execs wrote a book called "Working Backwards" detailing the philosophy.

Here are some insights 🧵


2/ The "Working Backwards" playbook

Instead of creating a product then finding customers, Amazon asks "What does the customer need?" and works toward the product.

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3/ Write a mock press release

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