Make MOney Online

Skorman, a former video store owner, likens the system to having a conversation with a movie buff — something that’s not possible on Netflix’s recommendation engine because it relies on a strict one- to five-star rating system and doesn’t adjust for a renter’s changing emotions.

“The reasons people choose certain movies are such a complex thing,” Skorman said. “Netflix has done a wonderful job with its system, but it has gone as far as it can go.”

Netflix’s recommendation engine accounts for about 60 percent of the service’s rental requests, a sign that it’s doing a pretty good job divining what customers like, Netflix spokesman Steve Swasey said.

Even so, in hopes of making its recommendation engine even more effective, Netflix has been offering a $1 million prize to anyone who can develop a software program that improves upon its matching system by at least 10 percent. After more than two years, the leading entrant in Netflix’s contest is within 0.44 percentage points of hitting the target.

“That final stretch is going to be like going up the final 300 yards of Mount Everest,” Swasey said.

This isn’t the first time that Skorman, 60, has tried to build a better mousetrap for movie lovers.

In the 1980s, he took over a video store in Vermont and expanded it into a successful chain that he sold to Blockbuster Inc. for $3 million during the early 1990s.

A few years later, he moved to the San Francisco area and started Reel.com, an online service specializing in selling movies on videotape and, of course, recommending movies. Hollywood Video bought Reel for $100 million in 1998, generating a $17 million windfall for Skorman.

As much as he liked the money, Skorman had at least one regret. If Reel.com hadn’t been sold to a traditional video store chain, he thinks he might have been able to realize his vision of logging DVD rental requests on the Web and then delivering the discs to customers through the U.S. Postal Service.

Read Full Story From: google.com