How Netflix Gets Its Movie Suggestions So Right

Netflix knows you better than you know yourself.

It knows the odds of you opening up your laptop and watching "Schindler's List" after a long day of work are slim to none, even if you gave the movie a five-star rating. Instead, you'll probably choose something light and fun, according to a Wired interview with two top Netflix engineers, which sheds light on how the site recommends movies and TV shows to you.

These recommendation algorithms are important because about 75 percent of what people watch on Netflix comes from the site's recommendations. Recommendations are based more on what you watch than on what ratings you give. "Testing has shown that the predicted ratings aren’t actually super-useful, while what you’re actually playing is," Carlos Gomez-Uribe, vice president of product innovation and personalization algorithms, told Wired.

Not only does Netflix keep track of your viewing and your ratings, it also watches how you browse, how you scroll, what you search for, and when and where all of this happens. Sometimes you may even get different recommendations depending on what time of day you visit Netflix or what device you're using.

Netflix's incredible algorithm is the result, in part, of a successful contest that CEO Reed Hastings started in 2006. He offered a $1 million prize to whomever could improve Netflix's ratings-based recommendation algorithm the most. The money was awarded to a group of international engineers, and the recommendation system has been changing and improving ever since.

Netflix is constantly testing new ways to surface films and shows that keep you coming back to the site. In June, the company unveiled Max, a program that helps you choose videos as if it were a game show. Gags like "Celebrity Mood Ring" show that Netflix is willing to try pretty much anything to keep you hooked.

You can keep lying to your friends about all the foreign films you watch, but Netflix knows you're actually in bed watching "Napoleon Dynamite." You can't hide from them, but luckily they won't reveal your secrets. Unless you pair your profile with your Facebook account, that is.

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