Netflix uses Crowd Sourcing to Increase Revenue

Written by on September 22nd, 2009

Over the past year I’ve been watching the drama unfold in the  Netflix one million dollar contest.

Netflix spent millions writing software code that would analyze their customer interests and likes and then use that information to recommend movies they would like.  If I give a thumbs up to the movie The Terminator, along with a number of sci-fi movies, the program will present me with additional movies that match what I am interested in..

The Netflix philosophy is simple.  The more movies I see that I like, the more I will order.

In October of 2006, Netflix caught onto the “wisdom of the crowds” thing and developed a contest that offered a million dollar prize for the individual or group that could improve the inhouse software they had developed.  (called Cinematch).

The winner would design a software program that would be 10 percent more effective and take away a million dollar prize.

The three year event has kept many in suspense, received a great deal of publicity and attention and has gone a long way to help their customers understand their passion to better serve them.  As a Netflix user, it caught my attention!  And to the participants who put hundreds of hours into the project, they just couldn’t let go.

The program started out with individuals around the world working on the problem on their own.  Then an interesting thing happened.  Individuals’ realized they didn’t have the expertise in areas that others who were actively working toward the solution had.  They realized they needed to merge or they were out of the race.  And as time continued, after one or two people came together, groups started coming together.   A group that realized they were slightly behind another team, then merged with a team that had code that would give them another 2 percent advantage.   And so it went until on Monday a seven person team of statisticians, machine -learning experts and computer engineers which called themselves the BellKor’s Pragmatic Chaos was announced the winner of the one million dollar prize. (…More…)

Should Washington Save the Yellow Pages?

Written by on December 4th, 2008

If the Yellow Pages go the way of dinosaurs and encyclopedias, how will you find new customers?

Yellow Pages

Now that the shock of the 750 billion dollar bailout is wearing off and Black Friday still generated about the same amount of sales as last year, everyone is taking a momentary sigh of relief.

However in Washington as you read this, a furious battle is raging, phones are ringing and businesses, organizations and even governmental organizations are trying to get the ear of congressional leaders in an attempt to get a few million (or billion) of the bail out money.

I’ve been reading a lot lately about the Yellow Page industry, which led me to uncover up and coming “small business advertising products” provided by firms like Yelp and Reach Local. My research uncovered a lot of conversations and information about the demise of the Yellow Page industry.  That’s when I started imagining their lobbyists using their connections to find out what angle they needed to get some of the bailout money.

But only for a second.

Because the more research I did, the more evidence shows the industry, while still very competitive, is hugely profitable and they have customers who swear by the results.

Consumers habits are changing

But the talks of the demise are true. (…More…)

Online Communities in the Pioneer Days

Written by on December 3rd, 2008

Pew Report

Life before MySpace, Facebook, YouTube

I was reading a report produced by the Pew Internet and American Life Project called, “A Portrait of Early Internet Adopters. Why People First Went Online and Whey they Stayed”.  The report by Amy Tracy Wells is  a quick read and a fun reminder of where online social networking got started.

Surveys conducted by the Pew Internet and American Life Project since 2000 have shown that the majority of people went online for personal reasons (50%), followed by work (31%) and school (19%).

Amy reminds us that the early roots of social networking started in BBSs (electronic bulletin board systems) and Usenet, chat rooms and threaded discussion software.  To access these systems one had to fire up a modem and wait!  A really fast modem in those days crawled.  When I lived in Telluride, Colorado in 1995, I remember waiting about 8 hours to download a new version of AOL’s software! (…More…)

Social Media, Online Community & Web 2.0 Confuses Business Executives!

Written by on October 3rd, 2008

Social media, online community, Web 2.0 confuses business executives!

You want an Internet strategy but…..

One of the reasons I sold a company I founded in 1995 to create online communities for alumni associations, non profits and companies was to concentrate on helping organizations understand how they could use the Internet to acquire, communicate, retain and engage customers.  Most people we spoke with, likened the Internet as a puzzle they didn’t know where to get started with.

In the 12 years we were building online communities, (Internet Strategies Group) my sales force spent most of their time educating prospective customers why they needed to adopt online communities and social media. To help, I wrote white papers, held conferences, Webinars and books.  We looked at this as the cost of doing business and selling a product that people didn’t understand and didn’t know how it would provide an ROI.

So it’s was no surprise when I read a McKinsey Global Survey (fall 2007) that surveyed how businesses were using Web 2.0 tools and services showed business executives were struggling to figure out how these tools  will help them reach their goals.

The report found:

     • 42% thought they should have invested more
     • 24% thought they should have invested sooner
     • 40% of these companies are not using social networking, RSS, Podcasts, Wikis and blogs.

There are two reasons business leaders are not investing more in Web 2.0, social media and online communities:

     • Confusion
     • Internal focus    (…More…)

Internet TV Right for Your Organization?

Written by on September 6th, 2008

Libraries, Franchise, Retail, Distributors, Police, City Hall, Dentists, Sales, Real estate benefit!

The cable industry revolutionized the delivery of television programs by providing you 500+  channels.  Now the Internet is opening an opportunity for thousands, no millions of TV channels to deliver news and content to consumers computers and cell phones.

This is presenting opportunities for your organization to reach consumers to educate, inform, advertise and gather data. One of the more successful case studies I could share with you revolves around wine!   In my 30’s Jack Daniels gave me the courage to dance on tables. Today, I look forward to a glass of wine at the end of a long day to relax and slow down my brain!  It works.  (ask me later about my Wine diet!)

Probably the most successful way you can use Internet TV is to educate your customers. That’s the direction Gary Vaynerchuck took when he created Wine Library TV.  Like the Internet, wine can be a mysterious and confusing thing.  It has its own language.  Gary’s concept is simple.  He has a webcam pointed at him as he sits behind a table lined with bottles of wine, glasses and a bucket to spit out the wine he’s tasting.

It’s not a sophisticated presentation, but it works.  Gary is by no stretch of the imagination a Brad Pitt or your every day TV personality.  He not only looks like Joe Pesci, but he sounds like him too!  His rapid fire unscripted conversation gets the job done with minimal preparation or time.    He  demystifies  wine and helps consumers feel more comfortable and confident.  His reasoning?

  • The more his audience knows, they more they will buy
  • And when they buy, they will remember they guy who taught them and that they trust!

And it works. (…More…)