Crowd Sourced Knowledge: Netflix Prize Won?

netflix prize awardLog in to Netflix and rate a movie you watched on a scale of one to five and Netflix’ computers will try to suggest other titles you’re likely to rank the same way.  This algorithmic pairing process has been marketed as a key differentiator between Netflix movie rental service and that of competitors.  It’s been touted as an achievement. 

For two and a half years, Netflix challenged the public to try and create a better mousetrap.   A million dollar prize was dangled as bait for the first person (or team) to create a program capable of beating Netflix’ Cinematch algorithm by a margin of ten percent or better.   Nobody succeeded.  Developers inched close but couldn’t quite hit the mark. Seven percent, eight percent, nine…but not ten.  The so called "Netflix Prize" went unclaimed. Until now, that is.

On Friday, a group created from a combination of four independent teams that had been vying for the prize submitted a solution that they claim resulted in a 10.05% improvement over Netflix’ Cinematch ranking algorithm.

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THQ Reorganizes Units, Looks to Future

thq repair metueIn the hit or miss world of video games, the last fiscal year was an unequivocal miss for Agoura Hills based THQ.  The company came up $431.1m short on a GAAP basis (or lost $101.8m in Non-GAAP terms) when it reported its full year results in May (release).  It was a “challenging” year as CEO Brian Farrell called it, to say the least.

The current fiscal year may be shaping up to be a little more positive.   In November 2008, the company announced a multifaceted plan to refocus on a narrower slate of premium titles and reorganize its business structure to allow more efficient operations.  24% of the company’s workforce (600 jobs) was cut in the following months and approximately $220m in expenses were pared off.   The company also added a new credit facility in May to provide a safety net for any working capital issues.

Today, in what likely completes one of the final steps left in the business realignment, THQ announced it will reorganize its development units into a new structure. Click to Read More

The Fight for Audience: Newpaper Websites in May

As newspapers continue their efforts to squeeze out revenue from their online properties, one of the questions editors are asking is what differentiation they should have between print and dot com.  Some argue that online being free; print should offer something special to add value to those paying for delivery.  Others counter that the Internet is the industry’s future and to be out in front requires putting richer content there – online where there are no page space restrictions and a bigger audience to capture.

In late May and early June, the Washington posted irked some readers and fired up the debate by taking a course seemingly supportive of door number two.   On May 31st and June 1st, the paper ran a large two part investigative report on an unsolved Washington, D.C. murder mystery.  The story was published only online leaving some print readers frustrated and others unaware they’d even missed a story until they saw the backlash.

In the weeks since passed, the paper has been criticized by some and lauded by others for its choice. The decision’s been justified by the scope of the article and its size (its narrow subject and long length argued to be ill suited for print), and castigated for the same reasons.  

Newspapers are fighting in an increasingly competitive online global arena and it’s clear there is no easy answer for how to succeed.  There’s so much information beamed at audiences.  To stand out from the volume (below cost and consistently) is a difficult task.  It doesn’t take much more than a passing glance at a newspaper’s financial statements to see that.  But new Nielsen data seems to add even more color to how complex the marketplace has become, and for that matter, how difficult the editorial decisions are that editors face.   

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Kotick Nudges Sony on PS3 Pricing (Updated 2)

For a top game publisher to abandon a console platform before the midway point in the hardware’s lifecycle is extremely unlikely.  Hardware makers and software publishers have a sometimes conflicted but always mutual need for each other’s services.  It’s symbiotic; especially once they’re both invested.  Even so, the two aren’t above venting frustrations.    

That happened Friday.  In an interview with the UK Times, Activision’s CEO Bobby Kotick went to the press for leverage.  Like a diplomat threatening war (with no real intention of starting one) he fired a shot at Sony to let the company know in no uncertain terms there’s concern about the PS3 platform’s anemic sales.

According to Kotick, Activision paid Sony in the neighborhood of $500m last year in fees and he wants a better, make that much better, return on investment.  He wants Sony to cut the price on the console to help stimulate demand.  He thinks it’s too expensive to develop for and too expensive for consumers. He wants change.

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May NPD Results: A Closer Look

At the gaming industries big convention, E3, a lot of the buzz was software driven. The chatter and talk was about the games on the horizon.  Who’s building what, how well it plays, how fast, and how fun.   Looking to last month, the industry didn’t generate the same kind of excitement in the retail stores during May.

According to the latest batch of retail data released Thursday by tracking firm NPD, sales fell off 23%, to $863.4m on the month.  It was the third month of declining sales activity and the first month the industry turned out a revenue result below $1b in total since August of 2007.

Normally at we publish a review of the NPD findings right away. This month, we took a few extra days to give it a closer look.

May is a historically weak month for games and to a certain extent, some weakness was expected.  NPD and a number of industry analysts had largely predicted a down result.   They note that year over year comparisons in the industry often don’t match because of differing product supply levels and the variable scheduling of when hotly anticipated new software releases hit the market.   One year could be boosted by a just released blockbuster (like last year) while another coasts on solid (but not comparable) sales of older catalog hits. 

In May, those cyclical elements and the quality of one year’s slate versus another were surely in play, but we think there may be clues in the data that show the results are a little more complicated.

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MySpace Cuts Staff to Regain Agility

In his biography or Rupert Murdoch, “the Man Who Owns the News,” Michael Wolff spoke indirectly of News Corps culture saying “every second working for [Rupert] Murdoch is a second spent thinking about what Murdoch wants.” Outside the realm of News Corps more core news-driven media properties, MySpace seemed to escape some of that oversight these past few years. The company was coasting on a straightening trajectory as an almost unaffiliated entity.

With new handpicked leadership in place, that’s changing.  Looking to refocus on the customer experience and regain a nimble edge without excess financial weight, MySpace said it will lay off about 30% of its staff.

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Checking the Chips: iPhone 3G S

inside iphone 3gs metueIt usually takes a few days or weeks after a product hits the store shelves before there is a public tear-down and reports about its innards (and manufacturing costs).    Jumping the gun, and working off “insider sources” instead of an actual look inside, several sites began sketching out the details and performance specs on the new iPhone 3G S internals this week. 

Many of the details have been rumored for a while and are probably accurate but it’ll be at least a few weeks before any actual dissection of the phone can confirm or debunk them. Still, for those looking for early insight into where things are, or where they might be going, here some of the gist from the hardware reports:

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