Frequent Netflix renters sent to back of the line

[Marc]

I'm posting this in part because I used NetFlix for about 6 months and experienced the same issues. I would send the DVDs back within 48 hours and while at first I experienced a fast turnaround, the delays soon became rediculous and I cancelled. I didn't know they had classed me as a 'frequent' renter... From MSNBC:

SAN FRANCISCO - Manuel Villanueva realizes he has been getting a pretty good deal since he signed up for Netflix Inc.'s online DVD rental service 2 1/2 years ago, but he still feels shortchanged.

That's because the $17.99 monthly fee that he pays to rent up to three DVDs at a time would amount to an even bigger bargain if the company didn't penalize him for returning his movies so quickly.

Netflix typically sends about 13 movies per month to Villanueva's home in Warren, Mich. — down from the 18 to 22 DVDs he once received before the company's automated system identified him as a heavy renter and began delaying his shipments to protect its profits.

The same Netflix formula also shoves Villanueva to the back of the line for the most-wanted DVDs, so the service can send those popular flicks to new subscribers and infrequent renters.

The little-known practice, called "throttling" by critics, means Netflix customers who pay the same price for the same service are often treated differently, depending on their rental patterns.

"I wouldn't have a problem with it if they didn't advertise `unlimited rentals,'" Villanueva said. "The fact is that they go out of their way to make sure you don't go over whatever secret limit they have set up for your account."

Los Gatos, Calif.-based Netflix didn't publicly acknowledge it differentiates among customers until revising its "terms of use" in January 2005 — four months after a San Francisco subscriber filed a class-action lawsuit alleging that the company had deceptively promised one-day delivery of most DVDs.

"In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service," Netflix's revised policy now reads. The statement specifically warns that heavy renters are more likely to encounter shipping delays and less likely to immediately be sent their top choices.

Few customers have complained about this "fairness algorithm," according to Netflix CEO Reed Hastings.

"We have unbelievably high customer satisfaction ratings," Hastings said during a recent interview. "Most of our customers feel like Netflix is an incredible value."

The service's rapid growth supports his thesis. Netflix added nearly 1.6 million customers last year, giving it 4.2 million subscribers through December. During the final three months of 2005, just 4 percent of its customers canceled the service, the lowest rate in the company's six-year history.

After collecting consumer opinions about the Web's 40 largest retailers last year, Ann Arbor, Mich., research firm ForeSeeResults rated Netflix as "the cream of the crop in customer satisfaction."

Once considered a passing fancy, Netflix has changed the way many households rent movies and spawned several copycats, including a mail service from Blockbuster Inc.

Netflix's most popular rental plan lets subscribers check out up to three DVDs at a time for $17.99 per month. After watching a movie, customers return the DVD in a postage-paid envelope. Netflix then sends out the next available DVD on the customer's online wish list.

Because everyone pays a flat fee, Netflix makes more money from customers who only watch four or five DVDs per month. Customers who quickly return their movies in order to get more erode the company's profit margin because each DVD sent out and returned costs 78 cents in postage alone.

Although Netflix consistently promoted its service as the DVD equivalent of an all-you-can eat smorgasbord, some heavy renters began to suspect they were being treated differently two or three years ago.

To prove the point, one customer even set up a Web site — http://dvd-rent-test.dreamhost.com — to show that the service listed different wait times for DVDs requested by subscribers living in the same household.

Read more here: Frequent Netflix renters sent to back of the line

[Bob_M]

I've been using Blockbuster instead for over a year.
I haven't seen any "throttling".
However they have raised their prices (I signed up AFTER their price lock-in expired).
Currently I get 2 free Movie OR Game rental coupons.

Their current Scheme is to get you to switch to 1 weekly MOVIE ONLY coupons. In the fine print, if you agree, the older lower priced customers are upgraded to the current pricing.

I have not upgraded my coupons cause I enjoy renting the $8 games for FREE. $8 to rent a game? Sheez

I can go to my local Family Video and rent games from $0.50 to $2.50 depending on how new the game is.

Regardless its a good way to rent all those TV shows on DVD

[JerryStem]

I read this over the weekend & I'm ready to cancel...

Been subscriber since about 5/05 I guess, and a friend has been for years before that & let me borrow one at a time (she was on the 8/month plan).

I'm only on the 2/month plan & for awhile everything was great. Our center is in Louisville KY, maybe 1.5 hour drive, so new rentals were fast. Then within the last month or two, things were getting slow. I'd drop one off on Monday & not get the next until that Friday or Saturday!

I don't consider myself a heavy renter, maybe 1-2 per week. This throttling BS keeps up & I'll drop them like a broken DVD... (Which I saw somewhere people were plotting as revenge...)

Let's see how this continues. So much for "unlimited rentals"...

Jerry

[Jim Wynne]

In Reply to Parent Post by Marc

I'm posting this in part because I used NetFlix for about 6 months and experienced the same issues. I would send the DVDs back within 48 hours and while at first I experienced a fast turnaround, the delays soon became rediculous and I cancelled. I didn't know they had classed me as a 'frequent' renter...

I can't help but think that at least part of the motivation here emanates from either fear of or actual pressure from the MPAA (Motion Picture Association of America) the lobbying front for the US movie industry, which has been very instrumental in the passage of draconian copy protection laws, such as the Digital Millennium Copyright Act which, among other things, makes all copying (even for backup purposes) of movie DVDs illegal. One might surmise that a person who rents 3 DVDs and returns them the day after receiving them, and does so repeatedly, is probably not watching the movies before they're returned. Of course such a supposition is just that, but the MPAA has evinced quite a bit of legislative and enforcement clout of late, so "throttling" not only preserves profit margins (at least in the short term) but also might keep the MPAA wolves at bay.

[Bob_M]

In regards to "breaking" netflix discs...
(I don't condone this but...) Some people on other forms said the easiest/quickest to get you Netflix account cancelled (with out any early termination penatlies) was to repeatly send back broken discs.

In regards to watching 3 movies per day = Copying DVDs
Growing up and during the early days of VHS renting (3 for $5 for 1 day), I got in the habit of watching 3 movies in around on a regular basis. (Wife can barely watch one in a row LOL) Shrug