The Netflix prize
Posted by Rich Sweeney on November 14, 2007
The NYTimes reports that the first round of the Netflix prize did not result in the $1 million reward being given out. The goal was to improve Netflix’s matching algorithm by 10%. 27,000 contestants from 161 countries competed, but, tellingly, the top teams were all affiliated with large, well funded institutions.
Was the prize/competition format optimal for this task?
The closest team, AT&T, spent over 2,000 hours on the project. With only $1 million at stake and a large number of entrants, this doesn’t appear to have been a profit maximizing endeavor by AT&T.