I remember when Spotify was in its early days, they basically hired the Swedish pirate community and tons of music freaks to either write the code or hand-curate the recommendations. Tons of people sat down and linked artists together in a recommendations network for what must have taken years before there was enough user data to have the algorithm roll on its own.

I imagine something similar was done for Netflix in the beginning. And at some point, some self-important corporate asshat decided to just throw one of their most valuable assets away.