Netflix delaying tacticsPosted: December 26, 2005
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.