Netflix, the Web's top movie-renting service, announced Friday that it has canceled plans to hold a second contest that awards a prize to whoever could come up with the most accurate system of predicting user film choices based on their viewing histories.
In 2006, Netflix launched the Netflix Contest and offered $1 million to anyone who could improve its recommendation engine. In September, the company finally awarded the prize to a team that included three AT&T researchers. To compete, competitors studied millions of demographic data, including age, sex, ZIP code, and previously rented movies.
The Federal Trade Commission began reviewing how private information belonging to Netflix's subscribers was protected, according to a blog post on the company's site. Neil Hunt, chief product officer for Netflix, wrote that a law firm had also filed a lawsuit over the issue
"In light of all this, we have decided to not pursue the Netflix Prize sequel that we announced on August 6, 2009," Hunt wrote. "We will continue to explore ways to collaborate with the research community and improve our recommendations system so we can constantly improve the movie recommendations we make for you. So stay tuned."
Read this excellent story from my colleague Declan McCullagh on how the public may be less concerned about privacy than authorities.