Netflix is happy — it announced a new contest on Monday that will give contestants demographic and behavioral data (e.g., renters’ ages, gender, Zip codes, genre ratings, and previously chosen movies) — but not ratings. Contestants will then have to predict which movies those people will like.
This contest showed what can happen in the Internet age when you offer prizes as an incentive and encourage online collaboration. The winning team included statisticians, machine-learning experts, and computer engineers from the United States, Austria, Canada, and Israel and actually was the result of a late-contest merger of participating teams.
Netflix had provided contestants with a huge dataset of real-life data that gave them the ability to further develop their large-scale modeling techniques. “Netflix made a brilliant move by realizing that there was a research community out there that worked on these kinds of models and was starving for data,” said one of the winners.
For that reason, the CEO of the company that sponsored the second-place team wasn’t complaining. Working on the contest helped his researchers come up with improved statistical analysis and predictive modeling techniques that his firm has used with clients in a variety of fields.
Contests of this nature are growing. InnoCentive and Genius Rocket operate separate online marketplaces for business projects where companies post challenges and workers or teams compete for cash or company-sponsored prizes. The X Prize Foundation is offering huge prizes for significant advances in genomics, alternative-energy cars, and private space exploration.
The idea of in-house idea programs is not new, but most are fiercely protective of company data. This kind of contest — and it doesn’t necessarily have to be data-centric like Netflix’s; it could just as easily focus on process simplification — is a terrific opportunity to leverage the collective brain power of millions of people who are looking for work and want to show companies what they can do. The job boards are an increasing waste of time; networking has its limits. But this is a way to find great talent and, at the same time, improve your business model. And the publicity Netflix received certainly hasn’t hurt its business.