2. Netflix Netflix is a subscription-based movie and television show rental service that offers media to subscribers: Physically by mail Over the internet Has a catalog of over 100,000 movies and television shows Subscriber base of over 10 million

3. Recommendations Netflix offers users the ability to rate movies and television shows that they have seen Depending on those ratings, Netflix provides recommendations of movies and television shows that the subscriber would like to watch These recommendations are based on an algorithm called Cinematch

4. Cinematch Uses straightforward statistical linear models with a lot of data conditioning This means that the more a subscriber rates, the more accurate the recommendations will become

5. Netflix Prize Competition for the best collaborative filtering algorithm to predict user ratings for movies and television shows, based on previous ratings Offered a $1 million prize to the team who could improve Cinematch’s accuracy by 10% Awarded a $50,000 progress prize for the team who makes the most progress for each year before the 10% mark was reached The contest started on October 2, 2006 and would run until at least October 2, 2011, depending on when a winner was chosen

6. Metrics The accuracy of the algorithms was measured by using root mean square error, or RMSE Chosen because it is a well-known, single value that can account for and amplify the contributions of errors such as false positives and false negatives

7. Metrics Cinematch scored 0.9525 on the test subset The winning team needed to score at least 10% lower, with an RMSE of 0.8563

8. Results The contest ended on June 26, 2009 The threshold was broken by the teams “BellKor's Pragmatic Chaos” and “The Ensemble”, both achieving a 10.06% improvement over Cinematch, with an RMSE of 0.8567 “BellKor's Pragmatic Chaos” won the prize due to the team submitting their results 20 minutes before “The Ensemble”

9. Netflix Prize Sequel Due to the success of their contest, Netflix announced another contest to further improve their recommender system Unfortunately, it was discovered that the anonymized customer data that they provided to the contestants could actually be used to identify individual customers This, combined with a resulting investigation by the FTC and a lawsuit, led Netflix to cancel their sequel

10. Sources http://blog.netflix.com/2010/03/this-is-neil-hunt-chief-product- officer.html http://blog.netflix.com/2010/03/this-is-neil-hunt-chief-product- officer.html http://www.netflixprize.com http://www.nytimes.com/2010/03/13/technology/13netflix.html? _r=1 http://www.nytimes.com/2010/03/13/technology/13netflix.html? _r=1