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Netflix “Throttling” DVDs

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This has been big news in the DVD movie rental world and it looks like Netflix just got a huge black eye with word of its latest changes to its terms of use. This harmless looking statement was added:

In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service…

What that means is that heavy renters will be penalized. It has gotten so big, it made it’s way to the front page of CNN!

Everytime a Netflix customer rents a movie, it costs Netflix a minimum of 78 cents (postage) and so the ones who rent the fewest represent the greatest profit for the company. Well about two to three years ago, Netflix users began noticing that they were getting fewer and fewer DVDs and that different renters were being treated differently.

Check out www.dvd-rent-test.dreamhost.com and you’ll see someone’s analysis of listed DVD wait times for people in the same family.

So when they say “unlimited” they really mean “unlimited if you don’t push them to the limit.”

{ 9 comments, please add your thoughts now! }

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9 Responses to “Netflix “Throttling” DVDs”

  1. MoneyDummy says:

    So, what someone needs to do is join a couple of similar services and rent the same ypes of videos, representing a wide range of genres, keep them for the same amount of time, and see how the turnaround is for a couple of months.

  2. Anon says:

    They have always made it clear this was the case, regardless of whether it was in the TOS.

    However, this has nothing to do with throttling or turnaround time. It simply means that frequent viewers might not get a new release as soon as it comes out, but they WILL get the next item in their queue.

  3. mbhunter says:

    Can you blame NetFlix? The occasional renters are the best customers for NetFlix, so why shouldn’t they get priority? That’s sound business sense. You’re not denying the heavy renters your service, but you’re going to be kept on hold for a while.

  4. jmunnie says:

    This has been happening to me, and I’m hardly abusing the system.

    I have the one-at-a-time plan. I’ve been a member for about a year, and I usually take out obscure or old films, hardly an new releases. I used to rent a max of 6 discs a month. Yet for the past four months, the top of my queue is “long wait” (used to be all “now”). And when I watch a disc and return it the next day, it doesn’t show up for up to 7 days! So my use is down to 4 a month. Really dishonest.

  5. muckdog says:

    I haven’t had any problems with Netflix. I live near a distribution hub, so that probably helps turnaround time. With new releases, I’ve noticed that the wait isn’t long and sometimes I even get it right away. I do 2 at a time, and go through 2 a week.

  6. RS says:

    I have been noticing some problems with Netflix lately as well. I have been a customer since almost day 1 and have been grandfathered into the 4 movies out at a time plan. I used to have about a 2-3 day turn-around time (tops) from when I sent a movie back to when I received the next one in my queue. Lately, it has been closer to 5-6 days. I have not really been happy with them for a while now. I used to be their biggest advocate, but not so much anymore.

  7. dlowe says:

    I agree with RS’ comment. I have been a customer on and off from the beginning. My current subscription has been active sence August and I was regularly getting new movies two days after dropping watched movies in the mail. That was until November when it started to take longer for the next ones to arrive. I thought it was just the season’s shipping slowdowns but it has never picked back up. It’s been getting worse. I sent three movies back last Monday, the 6th. One they marked as received on the 8th, the next on the 9th, and the third the 13, a week later. Now when they ship them out it takes two to four days to get here. This has happened with all my past subscriptions with them and I always cancel for this reason, it ends up not being worth it because the turn around time it too long. But, if I sign back up three to six months later it is back to being a fast turn around.

  8. bc says:

    Just read some of the comments but nothing struck such a strong chord as ‘dlowe’ from March 13, 2006. I’ve subscribed to the ’3 DVD’ program and this is what I’ve been experiencing in the last month on a regular basis…I return all 3 DVD’s on the same day, same mailbox or same post office. The next day I’m contacted stating that one of the DVD’s has arrived and either later in the day or the next day another mail stating the expected arrival date. Where are my other DVD’s?! One day later…another received…the next day after…the third DVD received along with the respective statements regarding expected arrival dates. At first I was giving Netflix the benefit of the doubt as they are at the mercy of the postal system…no more…this is the third time, same pattern. I live in the New York metropolitan area…my distribution center is in Queens…not across several states just a borough. I also want to mention that I do not rent recent releases and what attracted me about Netflix was the selection of older movies…suffice to say…disillusionment reigns supreme whenever I see that red envelope go into the mail. I don’t know what to expect…and try to find a phone number to contact a breathing individual…

  9. Karl says:

    A subtle way Netflix may be able to throttle without too much detection is to issue a title from a distant distribution center – even though it’s available at your local center. The postage costs Netflix nothing additional, and the title will take 1-3 days longer than the normal to get to (and from) you.

    Now I’m not saying Netflix will have *every* title you ask for at your local distribution center – this will occur occasionally and is to be expected now and then, but if you find this happening more than in the past, this may be a logical explanation. The shipping time from a distant center is the “perfect patsy” for delaying the number of titles you rent, both coming and going (as the return envelope is addressed back to the distant center).

    To stymie this delay, build up a cache of one or two return envelopes that are addressed to your local distribution center. Do this by returning your next 2 rentals in the same mailer, and keep the spare mailer aside. NOW, if you receive a title from a far-off distribution center, you can return it in the saved envelope addressed back to your local center – thereby trimming the return transit time by 1-3 additional days. Using this technique you can a deflect shipping delays on its return trip and get your next title released 1-3 days sooner.

    - “Someone” in Salem, MA


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