Artificial Intelligence Reshaping the Business Model of the Streaming Media Industry: A Case Study Based on Netflix

Abstract

Against the backdrop of the vigorous development of the digital economy and the rise of the Artificial Intelligence (AI) industry, streaming media platforms have developed rapidly. The text aims to analyze how the recommendation algorithms of AI contribute to reducing transaction costs with users, alleviating information asymmetry, achieving long-tail effects, and the future development direction of enterprises. This paper is based on the Netflix streaming media platform, which generates personalized homepage recommendations with the help of AI by analyzing users’ viewing time, rating, pause, fast forward and other data. This not only reduces the decision-making cost of users in massive content, but also improves the retention rate and subscription tendency of platform users, and also provides big data reference for the subsequent film and television production of enterprises-the client realizes the transformation from traditional on-demand to customized recommendation, and the enterprise integrates the user behavior information of the whole platform with AI to clarify the production direction. This paper adopts case study method, takes Netflix as the core analysis object, and combines its financial performance report, industry journals and literature to explore the fundamental reshaping of the business model of streaming media industry by AI from the aspects of production, distribution and profit model under the digital economy.