From Reviewing to Crowdsourcing

I recently wrote about the fact that reviewing is becoming the new advertising. I made the point that reviewing is part of a trend towards transparency: these days consumers want to know all about companies and their products and consumers are anything but shy when it comes to providing their input and feedback.

Well, the ultimate prize for feedback was awarded on September 21, when Netflix gave a group of seven people $1 million for a crowdsourced solution that beat the performance of Cinematch, the company’s own customer recommendation engine. Three years ago, Netflix launched the contest, offering the generous prize to the winner who could beat Cinematch by at least 10 percent. In late June, according to The New York Times,
a multinational team of seven data wonks calling themselves “BellKor’s Pragmatic Chaos” surpassed the 10 percent goal.

Why should we care? Because Netflix, instead of wearing “Not Invented Here” blinders, solicited its users and offered to pay handsomely for a better mousetrap. In essence, Netflix bought a major product development project from an outside group of users. They gained valuable insight from their base, and Netflix will now reap the rewards and directly impact the customer experience.

As The Times story points out:

“The Netflix contest has been widely followed because its lessons could extend well beyond improving movie picks. The researchers from around the world were grappling with a huge data set – 100 million movie ratings – and the challenges of large-scale predictive modeling, which can be applied across the fields of science, commerce and politics.

The way the teams came together, especially late in the contest, and the improved results that were achieved suggest that this kind of Internet-enabled approach, known as crowdsourcing, can be applied to complex scientific and business challenges.”

Until now, crowdsourcing has been limited to relatively minor commercial ventures, such as designers submitting logos or t-shirt designs. But the Netflix experience moves crowdsourcing up into the stratosphere. Netflix is so happy with the results of their first crowdsourced solution that the company is launching another contest.

Today, reviewing may be the new advertising, but tomorrow, crowdsourcing could be the new product development. Reviewing, crowdsourcing, whatever it is… In the end, it represents the ultimate in consumer empowerment.