The viewing behavior of Netflix's (NASDAQ: NFLX ) streaming members is telling the company something, and the good news for subscribers -- and investors -- is that Netflix is listening. Its recommendation engine is focusing more on viewer data, and less on the five-star rating system that Netflix depended on when it was a DVD-by-mail business. That shift appears to be working well for the streamer.
In the video below, Fool contributor Demitrios Kalogeropoulos argues that Netflix's data-crunching has led to some profitable insights for the company, including in recent gambles on original series like Orange Is the New Black. Still, there are good reasons to expect that Netflix's recommendation engine will continue to improve in the quarters ahead, helping push subscriber engagement levels up in the process.
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