Netflix: Designing the Netflix Prize (A) Harvard Case Solution & Analysis


In 2006, the CEO of Netflix company,Reed Hastings, was searching for a means to solve Netflix’s customer churn difficulty. Netflix used Cinematch, its movie suggestion software that was proprietary, to market independently decided best-appropriate pictures to customers. Hastings determined that a 10% advancement to the Cinematch algorithm would fall customer churn and increase yearly revenue by up to $89 million.

However, traditional choices for enhancing the algorithm, for example training and hiring new workers, were time intensive and expensive. Hastings chose to improve the software of Netflix by crowdsourcing, and began planning the Netflix Prize, an open competition searching for a 10% improvement on Cinematch.

The case details the enigma Hastings faced as he determined the contest, such as decision whether to make use of an existing crowdsourcing platform or to create his own, what company information to expose, how to protect customer privacy while making internal datasets public, how to allocate IP, and how to manage the crowd.

PUBLICATION DATE: August 14, 2014 PRODUCT #: 615015-HCB-ENG

This is just an excerpt. This case is about TECHNOLOGY & OPERATIONS

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Netflix: Designing the Netflix Prize (A)