Netflix Prize: Crowdsourcing for cash

In 2006 online movie rental company Netflix announced a contest called The Netflix Prize. The company's challenge? Beat its in-house movie recommendation system by 10%. Prize? $1 million.

More than 50,000 teams participated, but recently one team (a combination of four of the front running teams) announced that it reached 10.05% improvement.

The recommendation is big business for Netflix, as its current system is credited with driving 60% of all rentals, according to a NYT profile of the contest.

But with some programmers leaving their paying jobs to work on the Prize, some for over a year, Netflix is the true winner, getting a new system for $1 million while reaping the benefits of the work of a few dozen highly paid PhDs.