That's the funny thing to me, that people are using Netflix as an example. To me, Netflix ratings are just about the most useless ratings of all the ratings I'm aware of, maybe even more so than Amazon's ratings.
There's also things to consider, like time, that becomes relevant. Dichotomous ratings are known to be inferior statistically speaking, but they are faster, so there's a convenience angle. Tradeoffs.
These discussions always get frustrating to me because there's so much armchair ad hoc stuff that goes on when there's a huge scientific literature on this already.
People also don't seem to be aware of the assumptions they're making. About ratings being skewed, for example: for a lot of products, people probably do kind of want to know basically "is this meeting my needs?" and then everything is just a decrement away from that. Laundry detergent, for example, is something where I want it to clean my clothes well without damaging them. Why should that be normally distributed?
Also, there's a difference between ratings and how they're used. My guess is that 1-3 star rating variance is meaningful from an experiential point of view, but not from a purchasing point of view. That is, if you had the choice of a 3-star product or a 1-star product, I think people would prefer the 3-star product. When we say "1-3 stars don't matter" we don't actually mean that, we mean that they don't matter because it's below our threshold of what we'd be willing to spend money on.
