The Netflix $1-million prize has been finally awarded, with the winner, BellKor’s Pragmatic Chaos team, officially announced today. This marks the end of the almost three-year-old competition, but Netflix is already working on a new one, which it hopes to spark just as much interest as the the Netflix Prize that managed to attract thousands of teams of scientists, mathematicians and computer engineers.

“The Netflix Prize sought to substantially improve the accuracy of predictions about how much someone is going to enjoy a movie based on their movie preferences. On September 21, 2009 we awarded the $1M Grand Prize to team ‘BellKor’s Pragmatic Chaos.’ Read about their algorithm, checkout team scores on the Leaderboard, and join the discussions on the Forum. We applaud all the contributors to this quest, which improves our ability to connect people to the movies they love. Stay tuned for details of the next contest, Netflix Prize 2,” the competition's website now reads.

The contest was announced in October 2006. The object was to create a computer algorithm that would be better at recommending movies users might like than the company’s own software, called Cinematch. The gap would have had to be of at least  ten percent and with a $1-million prize there was a lot of interest. A huge number of teams with members from 186 countries entered the competition, but actually achieving what they had set out to do proved to be a lot harder than first anticipated.

Progress was very rapid at first, but it took until the beginning of the year to reach a 9.63-percent improvement over the in-house solution. After this, it took another six months for BellKor’s Pragmatic Chaos to finally pass the ten-percent mark and claim the prize. But it wasn't so clear-cut, as, after the first team reached ten percent, the others had 30 days to try and overtake it.

The competition came to a photo finish with the two leading teams too close to call out a winner, as The Ensemble, a competing team, managed to take the lead with just four minutes left until the deadline. However, because the contest was based on two sets of data, one for the public scores and one private for the Netflix team, it took almost another two months for the winner to be officially announced as the BellKor’s Pragmatic Chaos team.

But, based on the blockbuster success of the Netflix Prize, the company has already started working on a sequel that it hopes will prove just as popular. Imaginatively titled Netflix Prize 2, the new competition will alter the recipe a little. The aim of this new contest will be to create “taste profiles” for individual users based on demographical and usage data and there will be a $500,000 prize for the team ahead in the charts after six months and another $500,000 after 18 months.