OT-Netflix Frequent Renters Beware!

[Mysterious Benefactor]

I post this only because several members have mentioned renting from Netflix. And why doesn't this surprise me in the least? 


Using a technique called "throttling," Netflix identifies customers who "abuse" the all-you-can-rent DVD service by viewing and returning movies too frequently. The nerve! Using an algorithm that notifies the company when a customer is going to start costing it money, it "throttles" them back by delaying the shipment of their next movie--and thereby ensuring its profit. Customers who rent infrequently--otherwise known as profitable customers--are also given preference for DVDs that are out of stock due to high demand. Frequent renters just have to wait.

For the full story, check out: Netflix Throttling: Anatomy of a Customer Hierarchy

[MsCriseyde]

I'll preface this with a disclosure. I participate in a Netflix affiliates program on my web sites, so I get a small amount whenever someone subscribes to the service via my links. In the 3-4 years that I've had them, I've made less than $30, which explains why I am able to live in baronial splendor. 

I've also been a Netflix member for several years using the 3-at-a-time "unlimited" plan. I realize that unilimited should mean exactly that -- unlimited, but I also think it's a bit naive to expect any business to provide a service at a loss. The reality of my own use of the service is that I don't have the time to watch more than 3 discs a week, and they've managed to get them out to me at that rate. I've not had trouble getting new releases, but then again there are few movies that I have had at the top of my queue during the first few weeks of their release. So I get around 12-15 DVDs a month, and, for me, that's still cheaper than upgrading my cable service to include premium channels. Netflix lowered their prices when Blockbuster introduced their online rental service. (I think that's the only monthly bill I pay that has ever been reduced.)

I do know of someone who has experienced throttling, but they were returning all 3 of their discs the day after they received them. (Take a wild guess what they were doing with them.) What Netflix will do is start sending your movies with return mailers addressed to distribution centers that are much farther away -- West Coast for people on the East Coast, for example. With this particular person, it's really hard for me to feel sorry for them over the throttling. (It isn't anyone on this board.  )

[Mysterious Benefactor]

I do have to say that I got a kick out of the part of the final paragragh in the article where the throttling is taken to absurdist extremes:

I'm tempted to get very angry about Netflix' throttling policy. I mean, what's next? Will my newspaper get delivered later because I read too much of it? Will my food cost more because I enjoy it too much?

but only because it's so absurd that it's funny - and no one can seriously believe things will ever come to anything like that. But it's also interesting how the article claims Netflix has had to settle lawsuits which have presumably forced them to reveal their little "fairness algorithm." Several of the comments after the article are interesting as well. Though I've read enough such comments from people on the Internet to know that they don't always definitively represent the reality of any given situation. For instance, I've read comments from people who've railed against a particular product as a piece of junk when I've actually found the very same product to be quite useful and have been very satisfied with it. Needless to say, there's just no pleasing everyone. But so far as Netflix is concerned, I don't use the service, nor do any of my friends, so I can't make any sort of informed comment about them. But if I was to join, I'd definitely be one of their "profitable customers" because I'm normally lucky if I can find the time to watch one or two DVDs a month, much less three or more. But then I tend to gravitate toward DVDs with loads of extras, so it's not just a matter of simply watching the film. It's normally the film, the commentaries, the featurettes, and who knows how many other things. 

[MsCriseyde]

But it's also interesting how the article claims Netflix has had to settle lawsuits which have presumably forced them to reveal their little "fairness algorithm."

Yes. This all became public because of legal action, and one of the proposed settlements for the class action suit over the "unlimited" phrasing was to give all members a one-month free upgrade to the next level of service. Big whoop. I wouldn't have time to watch more movies per month. However, one of the major criticisms of the proposed settlement was that users would have to manually remove themselves from the higher level of service or else the following month they would continue to be subbed at that level and billed accordingly. That's pretty lousy. I have no idea what the status of the litigation is at this point, but the throttling stuff has been getting attention for the past few weeks. Some folks cite it as a good reason to use Blockbuster's online service, but part of their deal includes certificates for store rentals. Umm . . . the whole reason I signed up for an online service is because I don't want to truck my fat, lazy American butt to the video store. God bless Al Gore for inventing the Internet. 

[BuzzH]

Some folks cite it as a good reason to use Blockbuster's online service, but part of their deal includes certificates for store rentals. Umm . . . the whole reason I signed up for an online service is because I don't want to truck my fat, lazy American butt to the video store. God bless Al Gore for inventing the Internet. 

LITERAL guffaw over the above!  Kind of defeats the purpose of an 'online' rental service if you have to waste time and gas to haul your ass over to their stores.  But what do you expect from a bunch of numb-nuts like the suits at Blockbuster?!  If you recall, this is the company that got rid of late fees, then when too many customers were complaining that thier shelves were always empty and they were in the long run losing money, they re-instated late fees.  DUH!!!  

[Nancy]

Thanks for posting this, MB.  I am one of those who will probably get "throttled" at some point soon.  I do use the service quite frequently for the harder to get movies (they have a good selection),documentaries and also to view series that I missed during the season run.  Insomnia makes me a frequent user so I guess I will get punished for that by Netflix!

Nancy

[MsCriseyde]

I am one of those who will probably get "throttled" at some point soon.

Just to clarify (and maybe ease Nancy's mind), the Netflix process of throttling is not new. They've been doing it for a while. It's just only been made public recently. If you've not been "throttled" yet and you're still viewing at the same pace, then chances are you have nothing to worry about. It's not the process of throttling that's new. It's just the public disclosure that they do it.

[jennifer]

wow i've been using them for a while and haven't had any problems
of course right now i can't find two dvds so it may be a while till i return them
i'm also too lazy to go to the rental store and like their selection
jennifer

[Mysterious Benefactor]

A follow-up that even those of us who don't use Netflix can probably relate to. 


Among the many responses I have gotten this week to my blog about Netflix throttling, there were several questions as to how, exactly, I managed to get any kind of response from the company. Well, it wasn't easy.

Check out: The Agonizing Death of Customer Service


(I particularly love the comments someone made about Verizon because last week I was about a hair's breadth away from plotting to have them blown off the face of the earth.    It's a looooong story, but you might have noticed that there were two periods recently when I wasn't around - and that was all thanks to Verizon.  )