HT: Marginal Revolution.  From Why Netflix Never Implemented The Algorithm That Won The Netflix $1 Million Challenge | Techdirt.

You probably recall all the excitement that went around when a group finally won the big Netflix $1 million prize in 2009, improving Netflix’s recommendation algorithm by 10%. But what you might not know, is that Netflix never implemented that solution itself. Netflix recently put up a blog post discussing some of the details of its recommendation system, which as an aside explains why the winning entry never was used. First, they note that they did make use of an earlier bit of code that came out of the contest:

A year into the competition, the Korbell team won the first Progress Prize with an 8.43% improvement. They reported more than 2000 hours of work in order to come up with the final combination of 107 algorithms that gave them this prize. And, they gave us the source code. We looked at the two underlying algorithms with the best performance in the ensemble: Matrix Factorization which the community generally called SVD, Singular Value Decomposition and Restricted Boltzmann Machines RBM. SVD by itself provided a 0.8914 RMSE root mean squared error, while RBM alone provided a competitive but slightly worse 0.8990 RMSE. A linear blend of these two reduced the error to 0.88. To put these algorithms to use, we had to work to overcome some limitations, for instance that they were built to handle 100 million ratings, instead of the more than 5 billion that we have, and that they were not built to adapt as members added more ratings. But once we overcame those challenges, we put the two algorithms into production, where they are still used as part of our recommendation engine.