Netflix's Mob R&D

October 5th, 2006

Netflix logoMob R&D isn’t exactly like Mob Software, but I think it’s a good description for the Netflix Prize competition. Netflix will award a $1M prize for anyone who can achieve 10% improvement over their current Cinematch movie recommendation system.

“The Netflix Prize seeks to substantially improve the accuracy of predictions about how much someone is going to love a movie based on their movie preferences. Improve it enough and you win one (or more) Prizes. Winning the Netflix Prize improves our ability to connect people to the movies they love.”

What’s amazing is that their status board shows that after less than two days, more than 6,000 teams have registered and 20 of them have already submitted results! None, of course, has achieved the 10% improvement required for the $1M grand prize or even the 1% threshold for a consolation $50K progress prize. Yet.

This is a great example of getting a mob of people to do your R&D for you in the hopes of winning a prize. However, unlike the DARPA Grand Challenge or the X Prize competitions, this one only requires an inexpensive (as in $1-2K) personal computer to compete. Moreover, the underlying domain, movies, is one that we all know quite well, at least from a consumer’s point of view. Talk about a flat world!

If there end up being 100 serious teams in the competition and the grand prize is awarded, it will have cost Netflix only $10K per team. If only a $50K progress award is made (say for a 5% improvement) the cost would be only $500/team. Not bad. For any prize winner, grand or progress, Netflix gets “an irrevocable, royalty free, fully paid up, worldwide non-exclusive license” to the algorithm.