How big data is changing the video you watch
Streaming video services like Netflix, Hulu, and CraveTV are all the rage.
Consumers may be motivated by price or convenience, but from the business side, streaming video also gives companies access to huge amounts of data about customer tastes, preferences and habits.
No wonder, then, that companies like Netflix and Amazon want to be content creators, not just distributors of other studios' content.
Rahul Telang and Michael D. Smith are professors of Information Technology at Carnegie Mellon University.
They recently co-wrote Streaming, Sharing, Stealing: Big Data and the Future of Entertainment. They argue that, used correctly, all that data supports creativity.
Consider, for example, the popular Netflix series House of Cards.
It shows us two different ways of using data: to research the likely appetite for content, and to deliver it to the viewers who want it.
For Netflix, "it could look and say how many people liked Kevin Spacey or David Fincher or political drama," Rahul says.
"But beyond that, it also knew exactly who those people were...It could promote the show, or recommend the show, based on the individual user's preferences and tastes that they can see in the data." He points out that traditional film and TV studios would find it pretty much impossible to do this.
"We don't see the data being used to impact the creative," says Michael. "We see the data being used to promote the creative to exactly the right audience."
He argues that targeting allows these companies to make content that wouldn't typically have been made in more of a mass market era.
Apple is the latest content distributor to put its weight behind content creation.
In February, the company announced it is producing original video for its Apple Music service, beginning this spring. Amazon Prime has also brought together creation and distribution, through television programs such as Transparent.
The traditional Hollywood power players may feel pressure to respond.
"You see a lot of potential of distributors merging with content creators," says Rahul, noting that this is already happening.
"Comcast merged with NBC, for example. You see the stories about AT&T and Time Warner. That's where the market seems to be moving."
"For the last 100 years, we've seen three to six major studios, three to six major labels, three to six major publishers," he points out.
"Now you're seeing all this entry from serious creators coming from places you wouldn't expect it."
But if these companies have so much data about our preferences, couldn't that limit innovation, by only creating variations on what's worked before?
Rahul and Michael see it differently.
"In this uncertain world - and entertainment is as uncertain as it can get - you would think that data would allow you to maybe even take bigger risks," says Rahul, "because you can see something in the data that's meaningful."
"There are two hypotheses you could make about data: one is that data's going to limit creativity, and the other is it's going to expand creativity," adds Michael.
"If you look at what's actually getting made to us it sure seems like data is increasing the creative opportunities."