For online marketers, a perfect world would offer people exactly what they need–as well as things they didn’t even know they might want–immediately after they log onto the Internet.
That dream seemed nearly possible a few years ago, before the dot-com crash and a rash of pop-up ads, e-mail spam and misguided product pitches overwhelmed online shoppers.
A small Evanston firm is still seeking to prove the value of this online recommendation technology by trying to determine if people who liked “When Harry Met Sally” would enjoy “The Graduate.”
Sourcelight Technologies Inc., which focuses on making movie recommendations, makes predictive software that is being used by Blockbuster Inc. and independent video rental businesses.
With a database of 500,000 regular users from around the country and more than 50 million ratings of more than 50,000 movies, Sourcelight makes recommendations by matching a person’s preferences with others in the database.
A user starts by rating 10 movies on a six-level scale from “Loved It” to “Hated It.” The software then offers recommendations based on what people with similar preferences have also liked.
“You can get an accurate picture very quickly,” said John Furton, Sourcelight’s chief executive.
Whether Sourcelight can find a place for itself in the rapidly changing video rental market isn’t as clear.
Industry giant Blockbuster, which is Sourcelight’s biggest customer, is in the midst of confronting several challenges, including the consumer trend toward buying rather than renting DVDs and competition from firms such as Netflix and Wal-Mart that let people rent videos online and receive and return them through the mail.
The latter challenge may be an opportunity for Sourcelight.
Netflix CEO Reed Hastings said 60 percent of its rentals result from suggestions the site puts in personalized listings before shoppers or in a special “recommendation center.”
“It’s amazing,” said Hastings, whose company developed its own recommendation software. “It really is central to why and how we’re making online rental better than the local store rental.”
Sourcelight hopes to convince Blockbuster this really is the case.
Blockbuster has talked about setting up a system in which customers order tapes online, receive them through the mail and return them at a local store.
But despite all these high-tech changes, recommendation software still boils down to the humans who are rating the films.
At Sourcelight, for example, people–often film students from Northwestern University–will group films by general theme, such as “good girls gone bad” or “heartwarming pet stories,” as well as make connections between directors with similar styles or films from particular countries, Furton said.
“You need to have humans work on this stuff,” he said. “It’s very easy to make bad recommendations.”
