Everybody lies

Netflix makes a lot of money from understanding your viewing preferences and one thing they’ve learned is that ratings don’t matter, only viewing behaviour is predictive:

Why do I see so many three- or even two-star movies in my recommendations?

Gomez-Uribe: People rate movies like Schindler’s List high, as opposed to one of the silly comedies I watch, like Hot Tub Time Machine. If you give users recommendations that are all four- or five-star videos, that doesn’t mean they’ll actually want to watch that video on a Wednesday night after a long day at work. Viewing behavior is the most important data we have.

Amatriain: We know that many of the ratings are aspirational rather than reflecting your daily activity.

We can’t hide from you.

Gomez-Uribe: A lot of people tell us they often watch foreign movies or documentaries. But in practice, that doesn’t happen very much.

This is why economists focus on revealed preferences almost to the exclusion of stated preferences.

  • detmackey

    Yes. Most times before expressing an opinion, I check what Rotten Tomatoes says I should think about a movie.

  • Bill Patterson

    Obviously Netflix will have tested the heck out of this, and the revealed preferences are the most important information for their business model, but I’m not sure that translates to the title of this article: “Everybody lies”. People may indeed genuinely enjoy foreign/documentary/whatever films more when they actually watch them, but they don’t necessarily always have the mental energy to want to. The fact that they gravitate more towards the less taxing content may be lifestyle dependent rather than reflective of the viewer’s self deception. I like blue cheese, and when I eat it I enjoy it more than when I eat an apple, but I eat apples a lot more frequently. Does that mean I would be lying to say I prefer blue cheese over an apple, or that I experience greater pleasure when I consume blue cheese? Of course not.

    Also with something like Realty TV, there are a lot of people with revealed preferences for it, but stated preferences otherwise. But the thing driving the overwhelming amount of Reality TV content is the cost/benefit equation for the business producing the content. People complain about the vast amount of lowbrow TV/film and the pushback is often about revealed preferences. I’m curious about what sort of balance we’d get between low/highbrow content if the business cost/benefit were more equal. You’d maybe get more highbrow content, but more specifically, highbrow content that isn’t so taxing that you would watch it on a wednesday night after work.

    • http://www.tvhe.co.nz/ jamesz

      You’re right that the title is a little hyperbolic. More accurately, stated preferences tell us different things from revealed preferences and I understand that choice modelling work these days often uses both. Most of the time we don’t have the luxury that Netflix have of observing both so it would be foolhardy to discard the stated preferences, even if they are likely to be ‘aspirational’ in some cases.

      I agree with a lot of what you say about reality TV: costs are important in determining how much of it there is. Essentially, costs determine the supply curve and preferences determine the demand. The final quantity provided depends on the interaction of the two, so they’re not really separable. The business benefit is all about how much people choose to watch them, after all.

      On lowbrow vs highbrow I’ve always loved Yes, Minister’s take: http://www.youtube.com/watch?v=zvNw0P5ZMbA