The Netflix Challenge

Posted 45 weeks ago by Bear

So, Netflix offering a million dollars to the person or team that can improve their recommendation algorithm by 10 percent is a much more serious affair than I thought. It includes interesting lessons in software development and crowd sourcing. It even includes the mystery contestant, coming out of nowhere, who could win the whole thing.

1 Comments

olivier ~ 45 weeks ago

Is Netflix assuming that selecting movies that are more in-tune with what a customer wants to watch will actually yield more revenue?

That would be incorrect.

  1. The reality is that Movie viewing time is pretty much inelastic, so better movie recommendations aren't likely to drive up demand (or frequency... or velocity).
  2. I'm not even going to bother with #2 and #3. #1 is enough of a roadblock to make algorithms mostly irrelevant when it comes to creating a 10% increase in revenue for this sort of business model.

Netflix can grow revenue by increasing its marketshare, not by increasing the number of movies watched by existing customers.

Join the Conversation

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.
7 + 0 =

For reservations, call office864.335.9161. Send fan mail to our work location at 300 East Stone Avenue, Greenville, SC 29609 USA 34.85984128288701 -82.38952159881592
Lovingly crafted by orangecoat with some rights reserved, and a promise not to spam you.

Back to top