Netflix – DVD: Simply the Best…but Streaming is Another Story
In October 2006 Netflix launched a contest to improve their capability to predict which movies their customers, individually, would “really like”. They had discovered that their movie recommender, Cinematch, had become a competitive advantage to the company. By recommending movies that customers really liked, they were able to retain more customers for their DVD delivery company. Since its beginning in 1997, Netflix had reshaped the DVD rental industry by being on the leading edge of internet product delivery. It was only logical that their movie recommender should be the best. They offered $1,000,000 to anyone who could create a movie predictor algorithm that would be at least 10% more predictive than Cinematch. It took almost three years but a team of Austrian researchers combined with a team of Bell Lab researchers claimed the $1,000,000 Netflix Prize by developing a predictor that was 10.9% more predictive than Cinematch.
Netflix didn’t adopt the new algorithm in its entirety but it did incorporate some of the discoveries made by the winning team into Cinematch. To my knowledge, no other movie recommender out there has endured the trial by fire that Netflix endured with their Netflix Prize competition. Based on my very simple analysis of my own data, Netflix is simply the best at predicting which movies I will “really like”. Using the same approach I used to compare Rotten Tomatoes and IMDB in a previous post (Rotten Tomatoes, IMDB and the Wisdom of Crowds), take a look at the following comparison with Netflix:
|“Really Like”||Don’t “Really Like”||Total||% of Total||% “Really Like”|
Netflix provides a Best Guess of how many stars you are likely to give a movie. Best Guesses of 3.8 stars and higher are Recommended Movies. Notice below how much more effectively Netflix sorts the recommended movies, the average movies, and the below average movies compared to Rotten Tomatoes. Netflix-DVD is the best tool out there for finding movies that you will “really like”.
|Best Guess||“Really Like”||Don’t “Really Like”||Total||% of Total||% “Really Like”|
|3.4 to 3.8||267||457||724||36.8%||36.9%|
It’s important to understand that Netflix Streaming, which brings you House of Cards and Orange is the New Black, is not Netflix-DVD. In Oct. 2011, Netflix announced that they were creating a new company for their DVD business called Qwikster. The Netflix brand would only be used for their Streaming business. The outcry (and the cancelled subscriptions) was so great and immediate that, in November 2011, Netflix backtracked and restored the Netflix brand to their DVD business. The Netflix vision still remained, though, and very quietly Netflix separated the DVD and Streaming businesses. Today, they are run as separate businesses with their own facilities, management, and profit centers. They also have different strategies for recommending movies.
Netflix-DVD continues to use their gold-standard algorithm for predicting how many stars you are likely to give a particular movie or TV show, but one of the most popular features of the old Netflix is missing. Gone is the list of movies and shows that Netflix suggests for you. If you want to find suggestions, you need to hunt for them. For example, you can go to New Releases or the Drama genre and have those subsets of all movies sorted by suggestions. But, Netflix-DVD no longer makes it easy for you to identify all of the movies that you will “really like”. The reason might be that the Netflix business vision no longer wants you to identify the movies that you will “really like”. They want you to “really like” the movies they have.
On Monday, I’ll explore the Streaming side of Netflix and the conflict that pits the old Netflix against the new.