Agreed. The Netflix Prize was $1M, and this doesn't seem like just 1% of the work. Not to mention Netflix only required an non-exclusive unrestricted license from the winning entry, rather than full reassignment of copyright (see tgflynn's comment.)
Well Netflix also offered $50k each year for a "Progress Prize", but you're right.
I guess it is a question of "you get what you pay for", and I expect they'll get something quite usable but not great. Certainly good value for them, compared to contracting someone to do it.
