Netflix delaying tactics

Since I no longer have cable TV, I rely on Netflix for all my home movie watching. Therefore, I turn over movies quickly. Lately I’ve noticed they’ve been delaying my outgoing rentals. A recent article in Fast Company made it public about their tactics with high-volume renters:

…These highly vocal customers, who aren’t profitable for Netflix, believe the company is intentionally slowing down the pace at which it sends them movies, a practice these users call “throttling.” Hastings [their CEO] says these film buffs do get lower priority than low-volume members if Netflix is in short supply of a DVD or if one of the warehouses gets overwhelmed with demand. But he denies any other penalizing of these members. “We’re not saying they’re bad because they watch a lot of movies,” says Hastings. “God bless them, that’s fine. But if we run short, it makes more sense to give it to the people [who haven’t watched as many].”

God bless me? Hrmuf! So, I got tired of the delays and sent them an email complaining about my perceived situation. It took nearly a week for a response (which in-it-self was irritating). However, the response was surprisingly specific. Here’s some out-takes:

We receive rental returns Monday through Friday, except holidays. We process nearly 100% of returns the same day we receive them.

In certain instances, your next available DVD will not ship until at least one business day following our receipt of your returned movie. This can occur, for example, when your top choices are not available to you from your closest distribution center or the number of shipments to be processed by the distribution center on that day has been exceeded.

In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service. As a result, those members who receive the most movies may experience that (i) the shipment of their next available DVDs occurs at least one business day following return of their previously viewed movie, (ii) delivery takes longer, as the shipments may not be processed from their local distribution center and (iii) they receive movies lower in their Queue more often than our other members.

I’m sure this is a canned response. But at least Netflix is telling a consistent story. I can say, I am yet to see Netflix send me movies lower in my queue. The one thing that is not transparent is what fulfillment center the DVDs come from. Perhaps a setting “prefer my local distribution center” for sending out movies could help? Here Netflix could let customers decide whether they want movies fast or movies from the top of their queue first.

I recently upped my subscription for the number of DVDs out thinking I’ll always have a movie available when I want to watch. But the throttling pretty much put a stop to that idea. That means I’ll have to up my subscription again to get to a more comfortable point. That’s not going to happen.

What I’ve decided to do is take my subscription back down to three movies out. Yeah I’ll have to deal with the throttling problem but it’ll give me more time for reading and my various computer projects that have gotten zero time in the last three months. So, perhaps I should thank Netflix? 😉

BTW, I’m still an 80% satisfied customer. They have a great service. But I do believe they’re misguided in focusing on light renters. They just lost extra income from me. Also, light renters aren’t as likely to rave about the service. Yes, heavy renters do cut into profits. But I would think they attract more new customers by word of mouth than light users. If heavy renters refer new users twice as much as others, that would make heavy renters at least as profitable as light users if not more. I’ll still recommend the service to others but with the obvious caveat.

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6 Comments on “Netflix delaying tactics”

  1. Greg Linden says:

    Great post, Andrej.
    I’m also a heavy Netflix user, so I’ve also been hit by this policy. In fact, the top 4 items in my Netflix queue (which are all listed as “Very long wait”) have been skipped over for weeks. Instead, Netflix has been sending me items from deeper in my queue.
    On the one hand, I understand that I’m not as profitable a customer for Netflix. On the other hand, as you say, they’re taking one of their most fanatical customers and treating them poorly, hurting any opportunity for good word of mouth from them.
    Fortunately for Netflix, the other rent-by-mail options are weak; Wal-mart dropped their service and Blockbuster’s service has gotten poor reviews. Regardless, at some point, I probably will drop Netflix and move on to some other option.

  2. Doc says:

    Wonder how netflix who gets first spot in the queue for a DVD?…they told me. Those who subscribe for 1 movie get the movies first, followed by those who can get more than one movie at a time (in that order). In other words, they penalize members like me who can get 3 movies at a time in favor of those who only get one movie at a time. The only fair approach is a queue based on the date you placed the movie in your queue. Everyone needs to complain to netflix about how they are treating their better customers.

  3. Stan says:

    I dropped my subscription to one at a time two years ago and I was able to get two turn arounds a week (Three per week if I returned the movie the same day). An email popped up stating they would ship 2 more DVDs the same day (Friday) if I increased my account to 3 at a time. That would give me three movies for a rainy weekend, so I did.
    Hours later, my queue was updated to show only one shipped on Friday and the other two was scheduled to ship on Monday. On Monday it showed the other two as shipped, one to arrive on Tuesday and the other to arrive on Thursday.
    Obviously they have throttled my shipment, but how can the actually ship two DVDs on Monday and know one will arrive on Tuesday, which it did, and the other on Thursday?

  4. Andrej Gregov says:

    Hi Stan. Netflix will try to send DVDs out of the closest distribution center (DC) to you. If your top selection is not available from your closet DC, then they will try another one. The farther the DC is from you, the longer it will take for a DVD to be delivered. At least, that’s what I think is happening.

  5. rebecca r england says:

    I have my own complaint About half the movies I have rented either don’t play orplay part way then stops leaving me lost in a movie I was interested in

  6. Larry Norton says:

    I have finally realized that NetFlix does throttle the movies. I have the package where I have 2 out at a time. I can get 2 on monday, watch them on Monday and actually take them back to the post office the same day, and the I should, by Netflix’s promises get 2 more on Wednesday, but I don’t. They make sure that if you are on 2 out at a time you only get 2 a week. I should get at least 4 a week the way i watch movies, but I only average 2 a week no matter when I send them in. If it looks like I will get 4 in one week, they will send a notice, that the last 2 were sent back unopened and they will resend them. Which anyone with any sense knows that is nothing but a bald face LIE.


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