According to the AP, Netflix is offering $1 million prize for better movie recommendations. Here are the first three paragraphs of the article for any who missed it….
“Online DVD rental pioneer Netflix Inc. wants recommendations on how to improve its movie recommendation system, and is dangling a $1 million reward as an incentive.
“The prize, offered in a contest scheduled to begin Monday, is part of Netflix’s effort to sharpen its competitive edge as it continues a bitter duel with Blockbuster Inc. and prepares for an anticipated onslaught of services that make it easier to download movies onto computer hard drives.
“By spurring engineers to develop a better way to decipher consumer tastes, Netflix is betting its market-leading DVD service will become more useful to its 5.2 million subscribers and attract new customers.”
I am a huge fan of Word of Mouth Marketing (WOM); however, a million bucks is a ton of money. How much advertising, direct mail, advertorializing, telemarketing and event marketing could we buy with $1 million big ones? Not enough.
Netflix has it just right. Let the buzz begin. In fact, I am making this one short post so I can rush off to www.netflix.com and … Oops! Can this be the biggest hoax ever perpetrated, or just a big marketing nightmare.
Before writing this post, I visited the Netflix site and what did I find? Not a single word about the promotion. Now, I long-ago canceled my subscription, so I couldn’t log in. Maybe the promotion stands tall in giant neon behind the sign-in. But is that the way to go, if true?
The story first appeared on Monday, October 2. It’s more than a week later. And Netflix.com’s home page doesn’t say a word about the promotion. So what’s up? Anybody got a clue?
Is http://www.netflixprize.com/index that hard to find?
In any case, is it really a “promotion”? For the same price (give or take) of employing ten researchers for a year (with no guarantee of measurable results), Netflix gets hundreds of the smartest (and not so smart) working on one of their key business models with a payout only in the case of measurable added value.
I think it’s a great business move, but it may well not qualify as “marketing”.
Based on the latest news on the Netflix Prize site, there are not only a huge number of teams competing for the money, but at least one has already done a good enough job to qualify for progress payments.
From my vantage point far away from the game (I’m neither going for the prize, or even a Netflix subscriber), it looks like an excellent tactic.
But, one interesting point – it’s not really a marketing tactic, it’s a technology tactic. That might explain why it’s not mentioned on the main page: “oh, by the way, we know there are problems in our recommendation system that we are unable to improve, so we’ve asked the rest of the world to try to come up with something better for us.” It’s conceivable Netflix wouldn’t want that message prominently displayed to customers.
Ryan and Nils:
Good stuff! Thank you. Maybe it’s because I believe firmly everything a business says and does is marketing, that I see Netflix’s effort as marketing, whether they mean it as such or not. And Nils, I bet I could promote this in a very positive, honest and authentic way, making Netflix look like a company that cares about its customers, not one that can’t figure things out.