In October last year, Netflix launched an unusual contest. The online movie rental company is offering 1 million dollars to anyone who can improve their recommendation engine by 10%. Netflix is known for its innovation and bold moves and in the grand scheme of things, $1M is not a lot of money for such a business.

The competition is still running (it "continues through at least October 2, 2011"), so is this a publicity trick or an attempt to do research on the cheap? Is better recommendations something that Netflix really needs or is it just nice to have? Today Netflix is facing a challenge from the awakened giant BlockBuster, so it is certainly looking for a competitive edge. A great recommendation system can retain and attract users to the service. For example when a user returns a movie, he/she is recommended another movie they might like - which increases the likelihood of return business.

Browsing and Recommendations

• Personalized recommendation - recommend things based on the individual's past behavior
• Social recommendation - recommend things based on the past behavior of similar users
• Item recommendation - recommend things based on the thing itself
• A combination of the three approaches above

Amazon - The King of Recommendations

Beyond Amazon

Pandora - The Recommendation System Based on Genetics

Del.icio.us - Can Tags Become Genes?