NetFlix (sorta) does Crowdsourcing

The MIT Advertising Blog has a post about NetFlix offering $1mm to anyone who can come up with a better recommendation engine. They characterize the move as similar to Lego, in that they are reaching out to the wisdom of crowds to improve their system. It's not quite that, but it is interesting.

NetFlix is definitely taking a very innovative step. This is not like a contest where it runs for 6 weeks and the winner is decided. This is more like the X Prize. Because this is set up as a competitive event, it is assumed that individuals or team will work in isolation of one another. That's not exactly the notion of Crowdsourcing, where eveyone works completely collaboratively and transparently, like they did with Linux.

I'm certainly not going to be dogmatic about this. I think its a great idea. The interesting thing, of course, will be what happens if/when someone wins. What are the terms of that million smackers? Does NetFlix get the code, the rights and all? If so, $1mm is a bargain. The inventors would do better (assumedly) simply selling NetFlix a license. But, if they are registered for the contest, so that they can get to the data, do they give up that right?

The legalities of the crowd is always an interesting and sticky subject when we talk about anything along these lines. Clearly, there has to be some fairly airtight and mutually beneficial terms in place before any real work gets underway.