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10/2/2006
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Netflix Offers $1 Million Prize For Improved System

To help contestants in their research, the company is making available 100 million anonymous movie ratings from its database, which holds 1.5 billion ratings. The contest's goal is to improve the ratings system by a minimum of 10%.

Netflix Inc. on Monday offered $1 million to the person or group who could figure out how to improve the online movie renter's recommendation system by at least 10 percent.

To help contestants in their research, the Los Gatos, Calif., company is making available 100 million anonymous movie ratings from its database, which holds 1.5 billion ratings. The company says its the largest such data set ever released.

The Netflix contest comes at a time when experts say advancements in recommendation systems are slowing. The technology is used to suggest products or services to a customer based on the purchase history of the person and of people with similar histories. Netflix's system considers movie rental histories, as well as the ratings histories of a person and subscribers of similar tastes, spokesman Steve Swasey said.

Swasey said the company is willing to spend $1 million "to make something that's the best in the world even better."

"We're always looking for improvements," he said. "The best Lamborghini and Ferrari are going to be better in five years."

Netflix declined to say what affect a 10 percent improvement on its system would have on sales, but recommendations from the companies and subscribers are a "major contributor to Netflix's growth," Swasey said.

If contestants can't meet the goal over the next year, Netflix plans to award $50,000 to the person or group that makes the most progress above a minimum improvement of 1 percent. The company will continue with the annual interim awards until someone reaches the million-dollar mark.

The company sees the contest as a way to tap into a pool of talent it wouldn't normally have access to. Theoretically, anyone with a PC from any country can enter the contest.

"This is opening (the research) up in an egalitarian way to anyone in the world," Swasey said. As of early Monday morning, Netflix had received almost 400 submissions.

As of June 30, Netflix had more than 5.2 million subscribers. The company expects to end the year with 6.3 million. Netfix customers pay a monthly fee to have movies they select online mailed to their homes.

The idea of using money prizes to attract developers is not new. Google, for example, looks for programming talent through an annual online coding competition called Code Jam. The search engine gives away a total of $155,000 in prize money.

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