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German SVOD Service Ups Personal Recommendations to Combat Netflix, Amazon

14 Apr, 2016 By: Erik Gruenwedel

If you can’t beat ’em, emulate them. That’s the tact German subscription video streaming service Maxdome is employing as a competitive pushback against Netflix and Amazon Prime Video operations in the country.

Facing subscriber complaints about the time it took to find a movie or TV show on the service, Maxdome hired staff to personally recommend movies and TV shows to subs — a move Netflix engineered years ago before favoring science and statistics. In a twist, Maxdome employed a seven-person editorial board to give its content recommendations the look of a magazine.

"Even the best algorithm could not satisfy our users," Filmon Zerai, VP at Maxdome, told Reuters.

The personal touch is key considering the German SVOD market grew 13% last year, generating 229 million euros ($257.7 million), according to industry estimates. The growth is significant since Germany has for years maintained a strong packaged-media business — underscored by strong demand for Blu-ray. Packaged-media sales topped $1.68 billion last year. Digital sales and transitional VOD reached $384 million.

While consumers in the United States spend about $10 monthly on Internet-based video, Germans spend less than $2, according to the International Video Federation. But that’s changing as Netflix, Amazon, Apple, Watchever and Sky proactively acquire rights to German content. Maxdome secured the rights to “Breaking Bad.”

It all comes down to consumer demand. And Netflix has established an industry benchmark creating recommendation software based on user data from 75 million subscribers. With Netflix now operational in nearly 200 countries, the streaming service has established global recommendation software, according to Carlos Gomez-Uribe, VP of product innovation at Netflix.

“Viewers have more in common around the world than one would realize,” he said.

But localization also remains a crucial element of entertainment recommendations. When Netflix launched service in Germany in 2014, CEO Reed Hastings was asked what was the key to connecting with the staid German entertainment consumer.

"If we see that Germans like films with motorcycles in them, then we need more of those," Hastings told news magazine Der Spiegel.

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