The benefits of crowdsourcing - US$1,000,000 prize from Netflix

I highlighted the online Netflix prize quite some time ago as an example of how an organisation could work with its community to drive innovation.

Netflix has a longstanding prize of US$1,000,000 on offer for the group who could improve their online movie/TV recommendations engine by at least 10%. The goal is to substantially improve the accuracy of predictions about how much someone is going to love a movie based on their movie preferences.

Over 40,900 teams from around the world (49,000 people) have been involved over the last few years, striving for the recognition and the prize money.

Now a group of four of the leading teams from the U.S., Canada, Austria and Israel have formed a successful collaborative team (BellKor's Pragmatic Chaos) which has achieved a 10.05% improvement in movie rankings, making them the potential winners of the prize.

Firstly this achievement demonstrates the power of collaboration. Each of the four teams could only get so far on their own. By working together (across the world) they have successfully achieved what none of the teams could have achieved alone.

Secondly it demonstrates the power of crowd sourcing. Few organisations could have afforded to employ an extra 49,000 people for several years in the hope of achieving a 10% improvement in operations. However by opening up their information and inviting the public to compete to solve this data manipulation problem, Netflix has managed to improve its product and attract massive positive press at the same time for a relatively small investment.

If 49,000 people are willing to work on a 10% improvement to a movie ratings engine, think of the potential if we provided an incentive for people to develop innovative applications or solutions for public data and policy issues.

This is being tapped into in the US, with their Apps for America competition and smaller but similar events at state levels.

The approach is also being adopted in the UK.

Will it be much longer before we see it used in Australia?

Perhaps the Government 2 Taskforce will lead the way.