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Are Netflix's Movie Recommendations on the Money?


Investigating the accuracy of the video-rental company's competitive advantage.

When it comes to the performance of video-rental companies, Netflix (NFLX) and Blockbuster (BBI) couldn't be more different.

One is enjoying shares at all-time highs. The other is on the verge of bankruptcy. So what sets Netflix apart from the competition?

Some analysts point to the company's sophisticated recommendation engine, which gives Netflix a competitive advantage and keeps users coming back for more. The idea is simple: You rent one movie, and Netflix recommends another that you'll enjoy based on your previous selection.

But some users complain that the recommendation engine doesn't always work.

So, just how accurate is Netflix's secret weapon?

Join Minyanville's Josh Lipton for a closer look.

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