Netflix Uses Computer Algorithms To Decide What To Pay For Content

Thanks to a growing library of award wining original content, streaming giant Netflix is still poised to be on top of the streaming game for a while. While the service is focusing more on producing their own content, work from other producers is still certainly part of their profile.

And when it comes to buying the rights to a TV show or movie that’s already out there, it turns out that Netflix doesn’t even have to think about negotiating. It has a computer to figure that out. Netflix has their very own specially designed algorithm that tells them just how much a piece of content is worth.

This information came to light when documentary director Craig Atkinson spilled some details about recent negotiations he had with the streaming service. When the two parties were discussing the asking price for a specific film, Netflix told Atkinson told him they’d already determined how much the film was worth, and wouldn’t pay a penny more.

Atkinson felt the price Netflix was offering was a little low, but the film’s worth was set. The news that Netflix is using this style of technology to figure what they should pay could explain why they suddenly stopped bidding on high profile shows like Grand Tour, and why it pays over $13 million an episode for The Crown.

And this isn’t the only AI Netflix is using. Their recommendation engine reportedly saves them $1 billion every single year.