Trung Phan Profile picture
Oct 6, 2021 23 tweets 9 min read Read on X
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🧵 Image
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. Image
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. Image
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 Image
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) Image
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". Image
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. Image
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. Image
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) Image
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. Image
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) Image
11/ Here are different Netflix thumbnail selections for "Pulp Fiction":

◻️ Uma Thurman fans get the top thumbnail
◻️ John Travolta fans get the bottom thumbnail Image
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: Image
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). Image
14/ A less harmless example of thumbnail optimization is showcasing trending actors / actresses for content they played a smaller role in:
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. Image
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:
17/ Sources

Vox: vox.com/2018/11/21/181…

Thumbnail controversy: nme.com/news/netflix-a…

Netflix internal docs are a must read

1: about.netflix.com/en/news/the-po…
2: netflixtechblog.com/selecting-the-… Image
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: youtube.com/notinvestmenta… Image
19/ Last image: Here's what Netflix's home screen looks like with ZERO thumbnail artwork. Image
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) Image
21/ @netflix is def one company where this meme doesn’t apply:

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More from @TrungTPhan

Feb 4
Norway discovered off-shore oil in 1969. It launched its sovereign wealth fund with $300m in 1996.

It’s since grown 6,000x to $1.8T or $327,000 per Norwegian (5.5m people).

The fund owns 1.5% of all global equities but, most impressively, had a UX designer put a real-time fund value tracker on its website landing page.
Norway’s SWF roughly is 65% equity, 25% bond, 10% real estate/infra (all global).

Unsurprisingly, its largest holding is Apple ($47B, or 1.4% of the entire company).

On a related note, here is my deep dive podcast on Steve Jobs and making of the iPhone: podcasts.apple.com/us/podcast/caf…
Norway spared no expense on its SWF website. Look at that carousel!
Read 4 tweets
Feb 4
never forget that episode of “Nathan For You” when he launched a fire detector product and tried to avoid import tariffs by turning it into a music device
One company that has been very good at navigating international food tariffs/regulations is Trader Joe’s. Built its dairy and wine businesses by finding workarounds.

I explain in this deep dive podcast on Trader Joe’s business history and strategy: podcasts.apple.com/us/podcast/caf…
Nathan’s “Blues” Smoke Detector Instrument lololol:

— “concert quality”
— “pre-tuned to F-sharp”
— “9 battery lets you jam for hours” Image
Read 4 tweets
Jan 29
wow, found a rare interview of a DeepSeek co-founder talking about his first AI startup exit a few years ago
Jian Yang is my 2nd fave Asian founder who created a food-related product.

The 1st is David Tran, who built Sriracha (great on hot dogs) into a $1B brand using $20k of gold bars he snuck out of Vietnam in milk cans.

I tell the full story in this podcast: podcasts.apple.com/us/podcast/caf…
sold for $15m, what’s your excuse anon? Image
Read 4 tweets
Jan 17
Bookmarked a bunch of great David Lynch posts in past 24 hours (RIP to a legend):

1/ Martin Scorsese Tribute Image
Read 23 tweets
Sep 19, 2024
PayPal’s bland logo redesign was inevitable
Image
If you are the person that did the un-aligned letters for the previous eBay logo, please contact the research app team. We are huge fans of how un-aligned the “e” is with the “y”.Bearly.AI
This article offers up reasons for popularity of simple font logos (mostly Sans Serif):

— Easier to standardize ads across mediums
— Improves readability (especially on mobile)
— The “brand” matters more than the logo velvetshark.com/why-do-brands-…
Read 4 tweets
Sep 1, 2024
Berkshire Hathaway board member Chris Davis once asked Charlie Munger why Costco didn’t drop the membership card.

Let anyone shop and raise prices by 2% (still great value), thus making up for lost membership fees (and more).

Munger said the card is important filter:

▫️“Think about who you’re keeping out [with a membership card]. Think about the cohort that won’t give you their license and their ID and get their picture taken.

Or they aren’t organized enough to do it, or they can’t do the math to realize [the value]…that cohort will have a 100% of your shoplifters and a 100% of your thieves. Now, it’ll also have most of your small tickets.

And that cohort relative to the US population will probably be shrinking as a % of GDP relative to the people that can do the math [on Costco’s value].”▫️

I have a membership but have been guffing on the math for a few years tbh. They keep telling me to upgrade from Gold to Business but I’m too lazy (even if the 2-3% Cash Back on Business pays back after a few trips).

This is a long way of saying Costco’s membership price hike effective today — its first in 7 years — is annoying but when I decide to do the math in a few months, it’ll be worth it.

***

Chris Davis’ remarks from this episode of The Knowledge Project: open.spotify.com/episode/6fJYHF…Image
Anyway, here is something I wrote about Costco’s $9B+ clothing business my affinity for Kirkland-branded socks and Puma gym shirts. readtrung.com/p/costcos-9b-c…
Two notes:

▫️Meant “Executive” (not “Business”) membership
▫️Chris Davis was doing a pure thought experiment. Costco membership obvi high margin (on~$5B a year) and accounts for majority of Costco profits. Retail margin is tiny on ~$230B of annual sales (Costco would need like another $150B+ from letting anyone shop to make up membership profits)Image
Image
Read 5 tweets

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