When I first signed up for Netflix, I got my movies wihin 1-2 days. This changed to 4-5 days and sometimes more recently, so I cancelled. Seems this is why. From CNN.com.....

I hope this is the correct forum for this.


Netflix's best customers penalized
Policy designed to reduce number of films rented for monthly fee

SAN FRANCISCO, California (AP) -- 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 a month to Villanueva's home in Warren, Michigan -- 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."
Changing the rules

Los Gatos, California-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 him. 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, Michigan, 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 has 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 a 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.
Customers catch on

Because everyone pays a flat fee, Netflix makes more money from customers who watch only four or five DVDs a month. Customers who quickly return their movies 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://www.dvd-rent-test.dreamhost.com -- to show that the service listed different wait times for DVDs requested by subscribers living in the same household.

Netflix's throttling techniques also have prompted incensed customers to share their outrage in online forums such as http://www.hackingnetflix.com.

"Netflix isn't well within its rights to throttle users," complained a customer identified as "annoyed" in a posting on the site. "They say unlimited rentals. They are liars."

Hastings said the company has no specified limit on rentals, but "`unlimited' doesn't mean you should expect to get 10,000 a month."

Netflix says most subscribers check out two to 11 DVDs a month.
Growing risk

Management has acknowledged to analysts that it risks losing money on a relatively small percentage of frequent renters. And that risk has increased since Netflix reduced the price of its most popular subscription plan by $4 a month in 2004 and the U.S. Postal Service recently raised first-class mailing costs by 2 cents.

Netflix's approach has paid off, so far. The company has been profitable in each of the past three years, a trend its management expects to continue in 2006 with projected earnings of at least $29 million on revenue of $960 million. Netflix's stock price has more than tripled since its 2002 initial public offering.

A September 2004 lawsuit cast a spotlight on the throttling issue. The complaint, filed by Frank Chavez on behalf of all Netflix subscribers before Jan. 15, 2005, said the company had developed a sophisticated formula to slow DVD deliveries to frequent renters and ensure quicker shipments of the most popular movies to its infrequent -- and most profitable -- renters to keep them happy.

Netflix denied the allegations, but eventually revised its terms of use to acknowledge its different treatment of frequent renters.

Without acknowledging wrongdoing, the company agreed to provide a one-month rental upgrade and pay Chavez's attorneys $2.5 million. But the settlement sparked protests that prompted the two sides to reconsider. A hearing on a revised settlement proposal is scheduled for Feb. 22 in San Francisco Superior Court.

Netflix subscribers such as Nathaniel Irons didn't believe the company was purposely delaying some DVD shipments until he read the revised terms of use.

Irons, 28, of Seattle, has no plans to cancel his service because he figures he is still getting a good value from the eight movies he typically receives each month.

"My own personal experience has not been bad," he said, "but (the throttling) is certainly annoying when it happens."

Copyright 2006 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

That was an interesting article.
I'm a satisfied Netflix customer. I'd say I average 12 rentals/month.

Sounds like that's right about where they want you. Seems like if you get higher than that they'll throttle you to bring you down. Kinda goes against "unlimited rentals" though.

I wrote them about 6 months ago complaining. They gave me this explanation. I figured it sucked, but Netflix service still ends up being infinitely better than Blockbuster.

Plus, after I complained, movies started coming faster.

There are SOOOO many crappy movies out there, I don't know how you netflix people watch so many. I wathc about 1 a month and that movie usually blows.

For $10, you get one movie at a time, as many as you can watch in a month.

18-22 movies a month? Get a fucking life!

6205 posts on a message board? Get a life!

Ive only been a member for like 2 months, but I have noticed it used to be 1 day to get my movies, now its like 2 or 3. I thought it was just my mail.

It all makes sense now. Damn Netflix. Like everyone else, when I started, I got great service. For the past 6 months it has gotten progressively worse. I'll watch a movie and send it back. 2 days later I'll send another, and 2 days after that I'll send the 3rd. Logically, you would expect to get movies back on that kind of rotation. Fuck no. I opened the mailbox the other day to find 3 damn movies arriving all at once! Bastards....

Me too. I guess this is my explanation. I still like netflix as it's a much better option than shitty Blockbuster and it's still a great deal. I receive about 9-12 movies a month which would equal out to $36 to $48 a month if I was renting those through the store. $17.99 is still quite a bargain.

i checked my rental and i am around 12 per month, the shitty thing is I live like 10 mins from where it is located. I could drive there a hell of a lot quicker then the mail.

I did the same thing about 2 months ago and noticed some change. I honestly think that with more subscribers, it will take a little longer to get my movie. I usually get about 14 a month. The thing that pisses me off most is when I get a damaged movie and I know that that will fuck up my rotation. I get a bit obsessive about it at times that it turns into a competition to see how many I can get. But it is still the best bargain around. For the 3 movies at a time, you do the rotation once and you pretty much paid for your monthly fee (compared to blockbuster.)

Here's the number of rentals that Netflix shipped to me per month in 2004 and 2005. It took about 10 months for them to throttle back my rentals. The actual number of different movies that I received was less due to damaged/scratched dvd's that were unwatchable and had to be returned (averaged about 1-2/month). I cancelled my subscription in June 05.

Feb 17
March 15
April 19
May 13
June 17
July 17
Aug 16
Sept 14
Oct 16
Nov 15
Dec 12
Jan 12
Feb 11
March 12
April 12
May 12
June 7

You guys enjoy your limited rentals! I'll be over at Blockbuster.com loading up my queue.

damn

this thread only proves that many of you need a woman in your life

If you think Blockbuster won't be pulling this shit ... [insert witty comment about how dumb you are]

way to point out the obvious

How dumb I am? You're the one sticking with a company that's clearly screwing you over.