[raisedbyninjas]

I think the cost of postage/fulfillment/bandwidth should be a secondary concern to how many users can Netflix attract by providing content they actually enjoy. A bad recommendation for streaming or DVD both waste n minutes of viewing time. A bad DVD recommendation additionally wastes 2-6 days of waiting on USPS.

They already have the recommendation engine built and they need every differentiation they can get to compete with the crowd of streaming providers.

[JTon]

I completely agree. Real hype is generated when Netflix consistently nails recommendation. Content is still king, but curation of that content is the engine that drives the whole thing

[jaawn]

I agree about your "real hype" statement. There is always the potential for a provider to build business value by nailing recommendation, especially when it comes to lesser known content. Most viewers have heard of big-budget films they plan to watch, or they'll watch any movie with <insert actor>. However, if someone created a system that did this well enough for users to trust it with unknown content, it would go a long way toward meaningful differentiation.

Right now, I don't know of anyone who has limited spare time who would risk trying something unknown just because it shows up in their Netflix recommendations. If Netflix got those right frequently, people would rely on it more and probably enjoy it more. A 10% increase in accuracy has a decent chance to push beyond the invisible "good enough to trust" threshold and create an experience other streaming services just don't have.