Saturday, February 11, 2006

Netflix = Slightly Evil

Did you know that Netflix isn't really "as many movies as you want":
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.

14 comments:

PirateKayle said...

makes me feel glad I rent mine from the library for a dollar.

Anonymous said...

I noticed this long ago and quit netflix when i realized the movies at the top of my queue were never available when i would send the DVDs back immediately, but always available when i sent them back later.

Christopher said...

I think I'm going to try Blockbuster online. I haven't heard too many complaints, and they give you free coupons each month to get the DVDs directly from the store. Sounds good to me...

Peter said...

The problem with blockbuster is that it's just ACTUALLY slow. They have a smaller selection, fewer distributions centers, less organized distribution system, etc... it's just not as good an operation as Netflix. I get my netflix movies these days in 2-3 days (about 10-12 a month), but it would often take 5 or 6 when I was on Blockbuster's service.

Jay D. Homnick said...

This was very interesting and informative; I had no idea.

What I will say is that after reading a great retrospective piece in the Weekly Standard about W.C. Fields' The Bank Dick, I was able to get it from Netflix and enjoy it immensely. No way an operation like Blockbuster could dig that up for me.

Anonymous said...

Really, I think that Hollywood's entire quality output for the last 40 years could be covered in only a couple of months of rentals at this guy's rate. Just what exactly is there to watch?

Dan said...

This is actually pretty old news that seems to have just hit the MSM. I quit Netflix over a year ago because of throttling. I joined into the class action lawsuit settlement that's arisen out of this issue, but now I hear (?) that it's going back because the settlement potentially screws over the customer again.

Blockbuster is slow, but I'm back with them for one month (only!) as they offered a $1.99 deal to return. Selection is good, and I've been catching up with foreign/indie stuff like Come and See, Sympathy for Mr. Vengeance, Mysterious Skin, etc. BTW, Blockbuster does have The Bank Dick available online, just checked for kicks.

Anonymous said...

Wow -- who knew? Maybe they're cracking down on people who just copy the DVDs. I just added two Thomas hards discs after reading a (yes) John Pod review in TWS. Cheers. ... James O'G

Anonymous said...

Sorry, Thomas Hardy. Cheers...

Jay D. Homnick said...

Thanks, Dan.

Cal said...

I know of no business that doesn't prioritize their more profitable customers and do what they can to discourage their expensive customers.

Frequent Netflix renters aren't loyal or valuable; they're just expensive.

I don't think they should have had to settle at all, but the settlement was pretty cheesy. So that'll be fixed and it's done.

And as Dan points out, this is extremely old news. Netflix has had the notification about this on their site for over a year and it was extensively covered the year before that. Where have you all been?

Anonymous said...

Hi,

After reviewing some of the articles left on my consumer reviews
website, I still cannot understand: Who is winning in online DVD Rental business?


Blockbuster Service Reviews


Here are some of the Blockbuster specific examples:
Blockbuster Books, Records, Videos and DVD rentals
Blockbuster Video Stores and Online service
Blockbuster Late fees


Netflix Service reviews

Here are some of the Netflix specific articles:
Netflix Complaints - 3 Movie at a time rental
Netflix Quality of Service
Netflix speed of service


Can someone help me understand, who will come out on top here?

Regards,

Sharlotte said...

Oh, your blog is of great interest to me. I do know the Netflix company. It is the largest on-line DVD and video game rental service. Netflix is a market leader in on-line DVD rental service in the United States. That is a total rip off. I did have huge problems with the delivery of the goods. And know where the consolation is? www.pissedconsumer.com. This is an amazing site to express dissatisfaction and get the right advice.

Anonymous said...

In response to Cal's comment:

The way Netflix "prioritizes" is dishonest. They present the system as one thing when it is really another altogether. If they are sneaky about it, it's because they know it's wrong.