SF Chronicle on Throttling

The San Francisco Chronicle has written an update on the Netflix "throttling" story (Netflix upgrades settlement,
Company drops automatic renewal, but won't change its rental practices), and it includes interviews with several Hacking Netflix readers.

Netflix spokesman Steve Swasey acknowledged that "on the rare occasions" Netflix gets more demand for a certain movie than it has available copies, it gives priority to lower-volume renters, who might not have as many movies at home to watch. He added that the complaints come from a small number of customers and usually involve the newest releases.

"It's done only to manage our resources," Swasey said. "There's no other agenda behind it. ... The hard reality is you don't always have the resources to go around."

Netflix agreed to make up for the missing DVDs by giving customers one month of free service or an upgrade, which could cost Netflix as much as $80 million in DVD rentals, assuming all 6.2 million eligible former and current subscribers claim it, said Seth Safier of the law firm Gutride Safier LLP, which filed the class-action lawsuit. Netflix, however, said it expects the settlement to cost about $4 million, including about $2.5 million in attorney fees.

Netflix also cleared up how it allocates DVDs, Safier said. "It accomplished everything we set out to do," he said.

Comments

[NetflixShill]

"...month of free service or an upgrade, which could cost... as much as $80 million... Netflix, however, said it expects the settlement to cost about $4 million, including... attorney fees."

Why does that not surprise me??? Because the truth is that they will just throttle anybody who's dumb enough to accept the settlement, so they'd receive the same number of discs per months (or less). The lawsuit achieved nothing except a pay-off to Frank Chavez and the lawyers. Netflix can go right back to business as usual. They will probably throttle MORE to compensate for the attorney fees and send everyone a message. This settlement is ridiculous, frivolous, and useless.

What we NEED to achieve is HONESTY about when DVDs are received and how much they are REALLY delaying our next delivery (with long distance shipping and other tactics). We have the right to know when our DVDs are sent and received. Netflix is committing fraud every day, by saying DVDs were not received. They need to stop lying to customers and building false expectations with "unlimited DVDs", "one day shipping", and "fast returns." Throttling needs to make throttling absolutely transparent.

I am quitting Netflix at the end of this period. I will wait until the very last day, when I have all the DVDs in hand ready to return. I've heard a lot of stories about Netflix trying to cheat folks who quit, by saying the discs were not received within seven days. There should be a law-suit over scams like that, which are clearly meant to punish heavy users. They'd best not try it with me.

[Gerard Sorme]

"It's done only to manage our resources," Swasey said. "There's no other agenda behind it. ... The hard reality is you don't always have the resources to go around."

Uh.....then up your resources to meet the demand. Clue: buy more DVDs. This is a no-brainer. What a lame excuse. Insulting, really.

[CJ]

Interesting - yesterday, Tuesday, NF logged in a rental from me and then picked the next rental from my queue. NF indicated it would ship Wednesday. So I check today, and NF says it will ship that title today.

All well and good, but how about the 7 other DVDs they must have received by now, last was sent 2 days ago? They will not get checked in until tomorrow, because I have a shipping today title already for today, which means no account activity for today.

Subtle form of throttling it took me a while to catch on to.

[Jamieva]

I agree with the first comment we need more transparency in what happens.

I have videos that I send back together, placing them in the box to return at the same time, that get there on different days. That makes no sense.

I also mail them back from the same location, and sometimes they are logged in the next day, sometimes not for 3 days. That's not the postal service as I always receive my video the next day after they are mailed out. The return process is where we really get it stuck to us because there is really no way for us to dispute that. It's an informed opinion, but not fact.

[neilk2350]

its easy to criticize but i don’t see any good alternatives out there. i have an 8 out deal and i have had relatively few problems. when i feel a dvd should be back to them already (about 3-4 days after mailing) i report it missing and they ship me the next in cue. I do get the way out of town return envelopes and I just throw them out and use the ones from the hood.

[neilk2350]

although after writing that defense i checked my cue and i have two films that were received on tuesday and are marked for thursday shipping (two days to ship?). are Ryan's daughter and the last american hero are that rare? also Pride and Prejudice has been on very long wait for a very long time...

[Rcnca]

At one point I was personally defending Netflix until recently when I noticed the service was changing dramatically. Having a 4 at a time subscription, my returns were being checked back in a day later than in the past and on a routine basis and also shipments were delayed an extra day or two. Basically this was a return on Monday with Netflix receiving on Thursday and shipping on Friday and even as late as Monday the following week since they don't ship on weekends.

Throttling? Oh yes, no doubt about it, when a new release came out it would show up initially as "short wait" then within a day or two it would be changed to "very long wait". I wouldn't have been surprised at that point if they would incorporate a "awaiting your retirement" status. I can see a little throttling but it is blatant to the point that "any" new release you request you can just forget it. When you have a dozen new releases listed and not one is shipped but instead you are penalized in a longer wait time, it is time to go elsewhere.

I later signed up with Blockbuster who sends me my requested DVD's plus an extra coupon per week for my local blockbuster video store. Sure enough, the new releases are there and the coupon allows you to check them out. No more waiting for 4 or 6 weeks or retirement. For those severely throttled on new releases, check out Blockbuster and see if that works better for you. Netflix doesn't appear to want or need dedicated customers so perhaps it is better to subscribe to a service that seems to at least make an attempt at customer satisfaction. Four new releases per month by coupon at your local store (plus your mailbox) is a lot better than none. I hope that someone at Netflix reads these postings, there are a lot of very frustrated customers out here. Will I return to Netflix? Lets see some improvement first then just perhaps it might be worth the risk.

New customers, you will get great service if you keep your rentals low, and keep your new release queue to a minumum. Don't be surprised if you experience the "gas pedal" if you start asking for new releases too often.

[NetflixShill]

"i have an 8 out deal and i have had relatively few problems. when i feel a dvd should be back to them already (about 3-4 days after mailing) i report it missing and they ship me the next in cue."

Obviously not a Netflix user, because they make you wait 6 DAYS after the expected delivery to report a disc as missing (returned). Unless you lie and say you never got the disc. Then they'll probably delay your next disc until they receive it. Do that often enough, and they'll cancel or suspend your account.

[RAYMOND KNIGHT]

Who is kidding who? If you return DVDs to frequently they start throttling on every DVD whether it is a new release or an older DVD. Steve is lying through his teeth and he should be called to account for it.

[neilk2350]

"Obviously not a Netflix user, because they make you wait 6 DAYS after the expected delivery to report a disc as missing (returned). Unless you lie and say you never got the disc. Then they'll probably delay your next disc until they receive it. Do that often enough, and they'll cancel or suspend your account"

dude chill. if you read more carefully you would notice that i was talking about after putting a disk in the mail not from the day they sent it to me.

[NetflixShill]

"dude chill. if you read more carefully you would notice that i was talking about after putting a disk in the mail not from the day they sent it to me."

You can't report discs "missing" until 6 days after NF sent them. You can't report things "returned" until 6 days after the estimated arrival. You said you reported the discs missing after 3-4 days. How is that possible? They wouldn't even let you report them within that time, unless you said they never arrived at all. You'd still be forced to accept a one-week turn-around, if they felt like it. You're likely to have your account suspended or canceled, without notice, if you report many lost discs.

[Rusty Ramrod]

Again we have a reporter that did not take the time to properly understand what “throttling” is and good ole Steve, more than willing to spin it to mean Resource Allocation] rather than Quantity Limitation.

Anyone who follows this issue knows, yes, it is frustrating as hell to not be able to get a new release. But even the hardest critic should be able to see at least some logic in their reasoning for that, from a business standpoint anyway. That is *not* throttling, but rather Resource Allocation.

Throttling, as we well know, is the intentional delays in shipping and receiving movies, any and all movies.

Again, NetFlix is trying to change the meaning through propaganda because Resource Allocation is understandable, while Throttling is not based on their *unlimited* claims.

I expect soon to see NetFlix roll out their new spokesman, Mr. Bill Clinton. I can just see the ads now:

“I did not apply throttling to this customers account” and we will believe him. ;-)

[Rusty Ramrod]

Now that I look again, maybe the reporter did understand, but as soon as Steve opened his mouth, that is where it went south.

[Dreamlandtheatre]

I am thinking if switching to blockbuster.
I see that some of you have both netflix and blockbuster.

could you give a run down of perks and downers, such as selection differences and shipping time etc.

thanks

[Rusty Ramrod]

Dreamlandtheatre,

I belong to both. I feel NF has a better selection. Both NF and BB will throttle you if you turn movies fast. Otherwise, they are about the same.

That said, if you have a local BB store that is convenient for you, they win hands down as you can score the new releases locally with the 4 coupons they give you each month, even if they have you on maximum online throttle.

Also, BB lets you report discs quicker. NF makes you wait 6 days before you can report lost discs, etc.

[Mr. Nethead]

Demanding to know what goes on behind the scenes at Netflix is pretty stupid. They have a lot of trade secrets to protect, and letting the public freely view their operations would be a bad move from a business perspective. Think of it like Willy Wonka's Chocolate Factory. You'll be needing a special invitation to get in. (They probably don't want us to see their Oompa-Loompas either. Just kidding.)

I don't mind throttling that much as long as they acknowledge my returns when they receiven them. Luckily that hasn't been a problem for me. I would say I'm being "lightly throttled." Even though I usually send 8 movies back at a time, they almost always only ship 7 the next day and then hold one back for a day and ship from distribution center far far away. It's slightly annoying, but I'll live.

The most annoying thing about Blockbuster is that they receive 3 moves on three different days, even though I mailed them all at the same time. This almost always happens. On the plus side, they have some movies that Netflix doesn't. (Like Brainstorm and Backdraft.) They're also better with new releases, which is why I have BB in the first place. But even then, there are sometimes waits for popular movies. (Not near as bad as NF!)

[Jamieva]

The most annoying thing about Blockbuster is that they receive 3 moves on three different days, even though I mailed them all at the same time.

That happens with Netflix too, read my previous comment, that happens to me more then it should.

40 year old Virgin is still on "long wait" in my queue. Joking right?

[Dreamlandtheatre]

Rusty,

thanks for your input, i will probally switch to BB for a few months to try it out b/c my girlfriend likes the brick and mortar aspect.

Jamieva,

"40 year old Virgin is still on "long wait" in my queue. Joking right?"

It was avaliable in my que. last night, but now its on a "short wait".
I started out renting heavily, but lately I have been slow to return. I am in atlanta, i do not know if that matters

[ChicagoGuy]

I love the fact that NF answers questions about throttling (practice of intentionally limiting shipments of product to customers through either delayed check in or shipment)by explaining the allocation of films. The issue is not availability of new releases or any others it is pure and simply that NF delays servicing customers who have reached some unknown and unacknowledged limit that NF has placed on frequent users.

NF has absolutely no corporate ethics whatsoever as they have from day one felt comfortable with lying to their customers and the general public. As I have said before the second there is a better or equal alternative I would drop NF in a heartbeat.

[ChicagoGuy]

Forgot to add my cynical comment that the real winners in the lawsuit were as per normal the attorneys. The customers got a pittance and not even an appology. NF got a slap on the wrist and the ability to continue the abuse of customers and the misleading or false advertising.

The attorneys got $2.5 Million or 62.5% of the settlements ultimate "cost" to NF. The $1.5 Million I assume NF attributes to "lost revenue" that they would not have gotten anyway. The true cost will be the actual expense associated with shipping 2-4 additional flix to those that actually participate in the settlement. My bet is that cost is actually lower. Very few class action lawsuits actually result in real penalties for the accused and more importantly real remedies for the abused. The real cost in many class action suits is the resultant poor press for the corporation. If this results in lost customers for NF will never really be known.

[Doc Blase']

If it weren't for the lawsuit, I would have never even heard of this throttling concept.

Up till recently, we'd been able to return our 2 on Monday, NF would ship Wednesday, and we'd receive Thursday, then ship back Friday, etc.

All of a sudden, when we (once) kept a movie for one extra day, it fell apart and we started receiving movies shipped from a thousand miles away, and that after a two-day wait, (i.e., "shipping tomorrow") then it'd take the extra day to arrive, naturally.

For the first couple of months, NetFlix was great, just right on the money, but since that one movie (Big Bad Mama) our NF service has transformed into long waits, slow-to-post returns and shipping from wierd locations.

We live right in a NF distribution city which is Tacoma, not Seattle -as is listed in a lot of posts. (Tacoma is actually about 25 miles south of Seattle.) They receive our movies literally the next day.

[Sam Wise]

The choice of the slang term "throttling" is very appropriate, because that's what I feel like doing to Netflix. I'm fed up with Netflix, similar story to what a lot of people here have said. I understand Netflix has actually put into their fine print that they can to this throttling, and they're gonna keep it up. I haven't gotten a new release in four months.

Does Blockbuster have the same thing in their fine print? In other words, do they also say (in words nobody pays attention to) that they're gonna do this throttling?

Also, can these coupons be used at any BB store, or are they only good at company-owned stores?

Thanks for the information.

[Sam Wise]

I think I found an article from this blog from about 10 days ago that fully addresses what I just asked above...sorry I didn't check that out first.

But if anybody has more info, thanks.