Sunday, October 15, 2006

Sell your rights for $1 million

Netflix is experimenting with open innovation. They have made available a set of their own data & system, and invite you (as long as "you" are unencumbered by pesky relationships with companies and educational institutions) to beat their recommendation system. If you beat it by 10% or more, you are rewarded by having the ability to grant to Netflix a royalty-free pereptual license, with a warranty of "use" and non-infringement. Oh, and you get $1 million.

If folks go for it, I think this is a great deal for Netflix. Recommendation and personalization are hot, and will continue to be hot as we have more and more people wanting to customize everything on the internet. The warranty of non-infringement is huge. The "eligibility of qualifying algorithms" section is important. Read it.

Netflix's language: "An eligible algorithm must be originally developed or implemented (e.g., must not violate or infringe on any applicable law or regulation or third-party rights); must be written in English; and must not require any third-party software or licenses, payment on the part of Netflix, or otherwise prevent Netflix from exercising the rights granted hereunder."

So, still an interesting idea. Still a great opportunity to see new data sets and try things out. And it could be good for the winning team, too -- you'd get $1 million, and the credibility that Netflix liked your system. But as with all prizes, watch for the hooks.

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