Netflix prize awarded, Sequel announced

The Netflix Prize was an open computing challenge for the best algorithm to recommend movies to subscribers. The winning team, Bellkor, has improved Netflix’s own cinematch algorithm by 10.05% and will be awarded $1M for their success.

Clearing the hurdle wasn’t easy. Thousands of teams from more than 100 nations tackled the problem for more than three years, sharing their results and algorithms along the way. CEO Reed Hastings said in an interview “You look at the cumulative hours and you’re getting Ph.D.’s for a dollar an hour”. The contest is an example of Prize economics, where competitive incentives are offered as an alternative to in-house research and development. This was a tremendous research bargain for Netflix.

Netflix analyzes customers’ choices and ratings on the movies they have rented and recommends movies in a way that optimizes both the customer’s taste and inventory conditions. Automated recommendation algorithms are seen as a key competitive edge in e-commerce, allowing retailers to guess the types of products and services customers are seeking by looking at their past behavior. For Netflix, a 10% improvement on its algorithms could help move substantially higher numbers of movies and increase customer satisfaction, with a direct boost to profits.

The company’s analytical orientation has already led to a high level of success and growth. Netflix announced it would run a second competition, with shorter time spans of 6 months and 18 months to prize awarding. The new challenge will use demographic data rather than previous ratings as data to base predictions on.

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Netflix is the world's largest online movie rental service, with more than 11 million subscribers. It has revolutionized the way people rent movies - by bringing the movies directly to them.

Indus Insights is a specialized consulting firm that assists organization in leveraging analytics to drive business performance. They use state-of-the-art mathematical and statistical techniques to unlock game-changing insights hidden in data; and then translate these insights into actionable strategies.

Hotelier uses Business Analytics to optimize marketing spend

InterContinental Hotels Group (IHG) recently licensed a Test & Learn Management system to enhance their business analytics platform. This product suite is going to be used for seven hotel brands, including Holiday Inn, InterContinental, and Crowne Plaza.

This solution, which is currently used for its hotel management, guest services and marketing programs, will enable users to identify statistically significant results and build models directly from these results to predict the impact of future decisions. Specifically, hotels can determine the impact of any marketing initiative, from television advertising to online media, and can also measure the incremental value of pricing changes and how the changes affect different guest segments.

The impact of this collaboration will be assessed using key performance metrics such as Revenue per Available Room (RevPAR), bookings, guest satisfaction, and ROI.

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InterContinental Hotels Group (IHG) is the world's largest hotel group by number of rooms. IHG owns, manages, leases or franchises, through various subsidiaries, more than 4,200 hotels and over 620,000 guest rooms in nearly 100 countries and territories around the world. The Group owns a portfolio of well recognized and respected hotel brands, and also manages the world's largest hotel loyalty program.

Indus Insights is a specialized consulting firm that assists organization in leveraging analytics to drive business performance. They use state-of-the-art mathematical and statistical techniques to unlock game-changing insights hidden in data; and then translate these insights into actionable strategies.