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Earlier today, Netflix announced that it's putting a $1 million prize up for grabs. The Netflix Prize, as the online movie rental company calls it, will go "to the first person who can achieve certain accuracy goals in recommending movies based on personal preferences."

"Recommendation systems covering a wide variety of categories will play an increasingly significant commercial role in the future," said Reed Hastings, Netflix's co-founder, chairman, and CEO, in the press release. "Right now, we're driving the Model T version of what is possible. We want to build a Ferrari and establishing the Netflix Prize is a first step."

The Netflix Prize "was inspired by the unconventional approach used to win the Longitude Prize, which was created in 1714 by the British government to focus on one of the most vexing and dangerous aspects of transoceanic travel - determining a ship's longitude," the release stated, noting that "the movie Longitude' tells this story and is available at Netflix." A more recent example of this sort of contest (and one that has yet to be turned into a movie) is the Ansari X Prize.

The Netflix Prize probably won't be quite as challenging to secure, though. "The threshold required to win the Netflix Prize is a 10 percent improvement in accuracy over the current Netflix recommendation system," according to the press release.

Also, "if no one wins the grand prize this year, the company said it will award a $50,000 progress prize to whoever makes the most significant advancement toward the goal and will award a progress prize annually until someone wins the grand prize.

More of the contest's details are available here. "And," Netflix noted, "because of the serious amount of money, there is some important legalese you need to attend to" if you decide to enter.

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Doug is a staff writer for WebProNews. Visit WebProNews for the latest eBusiness news.