Netflix Customer Support on Throttling

Like Raven at A Netflix Odyssey, I'm sick of this topic, but after reading this e-mail I thought it was worth sharing. Take a close look at the last paragraph.

Hi Alan,

Thanks for your inquiry.

We appreciate you taking the time to provide us with your feedback and comments. I sincerely apologize for the difficulties you've experienced and have forwarded your feedback to the appropriate department. Please be assured that we are continually striving to improve our service.

I have provided below some details of how we ship and process DVDs so that you can understand how our service works at this time:

We receive rental returns Monday through Friday, except holidays.  We process nearly 100% of returns the same day we receive them.  When we check-in a return, an e-mail is automatically and promptly sent to you to let you know that we have received your DVD.

Our goal is to ship you the DVDs listed highest in your Queue.  We try to ship you DVDs from the distribution center closest to you so that you get movies quickly.  Often, on the same day that we receive a DVD from you, we will ship the next available DVD from your Queue.  In certain instances, your next available DVD will not ship until the next business day following our receipt of your returned movie.  This can occur, for example, when your top choices are not available to you from your closest distribution center or the number of shipments to be processed by the distribution center on that day has been exceeded.  When this happens, your DVD will ship on the next business day and may come from an alternate distribution center.

In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service.  As a result, those members who receive the most movies may experience next-day shipping and receive movies lower in their Queue more often than our other members.   By prioritizing in this way, we help assure a balanced experience for all our members.  Those that rent a lot of movies get a great value and those with lighter viewing habits are able to count on our service to meet their limited needs.

If you have any further questions or concerns, please feel free to contact us.

Thanks,
[name withheld]
Netflix Customer Service .

I personally think this is a fair way of handling movie allocation when you have more than 2.5 milllion subscribers, but I'm not a heavy renter. What do you think?

Thanks to Alan for sending this in.

Comments

[CashForFlow]

This seems completely fair to me. The cost per DVD is applied to all customers uniformly using this mechanism.

[ghlu]

Actually I don't mind throttling that much. Sure, I am not happy about it, but I still get ~15 DVDs/month on a 3-out plan with heavy throttling so its still good value. However, one of the annoying thing is that throttling messed up my ability to get new releases. Before I can estimate when I should return the DVDs so that netflix can send me new releases. But with throttling, I have no way of knowing when I should return my DVDs. As a result, I have to wait at least 1 month before I can get any new releases, which is REALLY annoying.

I am currently testing out blockbuster. It is slower than netflix and the website sucks. But with netflix's throttling, I believe I'll get the same number of DVDs from blockbuster. I can also get new releases with the instore coupon, which is a BIG plus. Besides, blockbuster has all kinds of weird promotions that can reduce the monthly fee (I am paying $10 this month, $5 next month). So I guess I'll dump netflix when my current month finishes.

[wayne]

I am very annoyed by it. I have recently started to get throttled after being a member for several years. I seem to have reached the throttle point at 15 a month (my average is about 10-12). I have a movie watching routine (about 3 a week - doesn't seem excessive). I like to have 2 movies for the weekend. With throttling I can't count on when movies will be shipped. Why would they bother sending emails asking if movies have arrived (both perfecting their delivery system and reminding you that they want it to be reliable) if they intentionally make it slower for some users?

In the message they seem to be saying 2 different things - a. we really want to get you the movies you want at the top of your list, so you just have to wait an extra day and b. regardless of what is on your list, low usage members will get movies sent before you. I don't care about new releases. Sure I put them near the top of my list occasionally - but I would much rather them tell me "short wait" and send me an older movie the same day, as seems to be the case in the past.

I loathe Blockbuster retail and will resist switching to them - but the previous comment makes a good point. If I'm being throttled why not switch to a service that will let me go into a store 2 blocks away when a video doesn't arrive by mail. Perhaps this is a tactic to get unprofitable customers to drift to the other services. The other way of looking at it is when the 5 friends I have that don't use online video rentals ask me, the person they know that is a heavy movie viewer, what service to pick - what will I tell them?

[rw]

I'm fine with prioritizing for title access, but not shipping access. If Netflix can't get around to shipping my title that day, then fine, but don't decide every day at 1030am to ship a title the next day. I don't tell my customers to go f*** themselves two hours into the business day, and neither should Netflix.

Personally, I think that Netflix is turning up the throttling to force its high volume renters over to Blockbuster. What better way to sabotouge the competition than to send them all of your unprofitable customers. At the very least, it will make Blockbuster think twice about trying to beat Netflix on price. In the end, high volume renters will go back to Netflix once they have bled Blockbuster.

Netflix really needs to start shipping same day from more distant distribution centers so that they are not so "in your face" with their delay tactics. Doing so would at least create the impression that Netflix is trying to service its customers.

[manuel]

I think your a day late and a dollar short with this info. I posted a similar letter 2 weeks ago by Mark in Alameda, CA who went on to be interviewed by Channel 7 news in the SF area in their story, "Netflix Gets Some Criticism From It's Subscribers." How did Mark know Channel 7 was looking for people to interview about Netflix throttling? Because Mark saw I posted the request on my web site. Meanwhile, throttling has been the buzzword on all the Netflix message boards (i.e. Motley Fool). However, don't worry Netflix's new disclaimer makes them impervious to any lawsuits.

http://www.manuelsweb.com/netflixjournal2.htm#012605

Netflix may have thought I was an inconsequential subscriber with no voice but the Internet is a great thing. It's not good for Netflix to alienate their customers by calling them "heavy users." Now that they've done it they'll never live it down. In the meantime, Netflix competitors can sit back and watch learning from Netflix's mistakes.

[skebenin]

I think it's entirely fair, and short of rental caps or going back to a fee-per-rental approach, it's the only way to stay in business.

All flat-fee, no cap services that aspire to one day delivery are going to have to do something similar. If you think otherwise, you're ignoring reality.

[wayne]

Fair is very subjective - I disagree - currently they are advertising a "unlimited" service that has hidden limitations. Fair would be when you signed up the description of the service clearly said "once you rent X titles a month we will start to delay shipping more titles to you".

I am not a heavy user at all. I can only get 3-day shipping so the most I can get in a month is 12 discs if I try BUT i get the "shipping tomorrow" about 50% of the time. Plus I usually have 60-80 discs in queue so they should be able to easily send one from my center.

[REN]

Yea, this has all been covered. The only thing interesting is the statement "or the number of shipments to be processed by the distribution center on that day has been exceeded.". That means to me that they have a definite calculated cut off point for the number of movies they process, it isn't necessarily tied to available labor or the amount of time before the mail is picked up.

I'm skeptical about the "We process nearly 100% of returns the same day we receive them.". Of course, that could just mean that they process a return "check a movie in", but never get around to processing (mailing out) the next movie in a queue.

[Nick]

I think it's BS when a company advertises its service on radio, TV, and web by using statements like "Rent as many DVDs as you want" and "unlimited rentals."

Paying $34/month to rent 15-18 DVDs is a rip, and you certainly can't count on Netflix to get you new releases in a timely fashion. I can't wait for Blockbuster to start shipping locally - I hope they'll avoid making the same mistakes with their customers as Netflix has.

[reg]

"Like Raven?" Raven has endelssly denied that this even could exist ever since the complaints started six months ago. Only after Netflix actually ammended its faq to show it does did she take an apolgoist position instead of denial.

Also I am very skeptical about this response from Netflix. It seems to be another falshood in incremental falshoods in there responses. I am suprised you published it when you know yourself it is problematic.

For a year they denied they were penalizing long term customers then admitted it. Neflix stonewalled and simply blamed the post office, which we now know was false after many tests showed it simply had to do with the lenth of time you were a customer (not even your number of rentals per month).

A number of us are now conducting tests. I now have quite a number of instances where new releases which netflix mails on modnays being mailed on tuesdays. this is throttling, not prioritizing, since a lower use customer obviously did not have it mailed monday, recieved Tuesday and back in Netflix's hands Tuesday night in order to mail to me Tuesday evening.

More to the point I have many many non new releases being delayed for many days.

We are talking about very broad based false advertsing. Moreover, dividing customers into classes of service without notifying them is pretty good grounds for some serious legal action. At thw very least this is a brewign public relations mess that will make blockbuster's late fees seem trivial.

[Mike]

Manuel,

I saw your post, and also the Channel 7 story, but it's the same thing over and over. I'm sick of this issue. Netflix "throttles" high-volume customers like you to make the service fair for 2.5 million people. They allocate movies based on usage. We all know this.

If you think I'm not being fair, I have a lot more trouble with my Blockbuster account and yet I don't post every single issue I have with them. I also have ads for Blockbuster AND Netflix on my site.

Hacking Netflix may have started as a blog that covered Netflix, but it has evolved into a site that talks about the entire DVD-by-mail business.

While I don't like your site and until today stopped reading it because you publicly make false claims about my site (Shill? Fake blog?), I still let you post the same thing over and over on Hacking Netflix. I could easily ban you but I think your opinion is important. It's just getting boring. You only tell one side of the story. I'm not perfect but I at least try to be fair.

I have read every single comment on Hacking Netflix (more than 2,700 in the past year). They get e-mailed to me and if I was a shill I could have deleted your comments or blocked you from posting.

I still don't get why you think I called you a liar. I posted your story and you somehow read into that I thought you were lying. I thought I was being fair. In another post you say that I'm ridiculing you. Give me a break. You always see the negative in everything.

You're getting 30+ movies a month from Netflix (and now you have BB & Greencine) so I'm wondering if you're ripping them (how else could you watch so many movies and work 12 hour days?).

I have written about throttling several times in the past, and linked to your site, so I'm not that late on this issue. I simply received an e-mail that I thought was interesting and posted it. I don't read your site anymore so I just saw your January 27th post.

I was hoping this would close the issue and we could all get on with our lives.

I try and run different stories than Becky (Netflix Fan) or Raven (A Netflix Odyssey) cover. I'm not going to beat up Netflix or Blockbuster every day. Sorry. I try and share information that I think my readers find interesting.

I get great service from Netflix, but I rent fewer than 10 movies a month.

The mainstream press lives on controversy, and they love talking to you because you have a "sensational" story to tell about Netflix. The truth is that the majority of customers are getting great service. A lot better than Blockbuster or Walmart (!) at this time.

The Web is great. You can create a Web site and post what you want, and I can post what I want. The difference is that you sound like a broken record and only post one side of the story about Netflix and it's getting annoying.

I challenge you to be fair in your writing.

- Mike

[Ed]

Only thing about that that bothers me is how it affects new relases. I can see then slowing down shipping if youre a power renter. I have no problem with that. But EVERYONE should get the same access to new releases, no matter what their renting habits are.

Although in the end it really doesnt bother me that much as the real beauty of the servixce is finding those super rare hard to find dvds no blockbuster would EVER have. im talking british tv shows, bollywood films, japanese art films, etc...

[RAYMOND KNIGHT]

NETFLIX keeps setting what they consider heavy users lower and lower each month. A heavy user is now down to three a week. They are going to srart losing customers right and left. I no longer recommend NETFLIX to people who ask me about rental services. If a I want is two DVDs a week I will go to BLOCKBUSTER same 4 bucks a month and get better service. They process on Saturday as well.

[brandy]

My problem is that 3-out accounts and 5-out accounts seem to get the same level of throttling. I pay more to see more movies a month, right? [ok, some may say i pay more to have more at home, but whatever] I'm always getting next day shipping, movies down my queue, etc. - and we don't rent THAT many movies. My household has decided to split the difference between NF & BB - a 3 out plan on both.

[CashForFlow]

"I'm fine with prioritizing for title access, but not shipping access. If Netflix can't get around to shipping my title that day, then fine, but don't decide every day at 1030am to ship a title the next day. I don't tell my customers to go f*** themselves two hours into the business day, and neither should Netflix."

RW,

This was the most articulate summary of what Netflix is doing. Thanks for laying it out so clearly.

Question: Instead of throttling and pissing off users, why doesn't Netflix just take the honest approach and cap rentals at 12/month.

People are pissed off not because they're being capped but because they feel misled and cheated by Netflix (i.e., Netflix says unlmited but does everything it can to delay). Putting in an explicit cap would eliminate this problem.

[M-Class]

As many of you know from another topic, we've been experiencing 4-5 day delays in our NF returns to Bowling Green, KY from Nashville, TN (yet we always get 1 day shipments from Louisville NF to us). I had thought it to be a USPS problem (because I successfully test mailed a return from within Bowling Green itself). A complaint to NF "customer no service" yeilded one mail that suggested we mail from another mailbox. When I responded that we had, we got the generic shipping times form letter from NF. Things have gotten more interesting since the complaints though... instead of the normal consistent 4-5 day return delays, two movies have made it back in 2 days, with 1 other taking 4 days and 1 in-route now at 3 days. This is out of 4 returns mailed from 2 return mailings (of 2 movies each). In both cases, one movie has made it back in 2 days, while the other is following the former typical 4-5 day return rate. Now how does that happen?!?! It makes me wonder if my Bowling Green mailing trip was a valid test or not!

For the record, at maximum we were averaging 10-12 rentals per month. That number may have surged to 13 once or twice if a given month had 5 weekends instead of 4 (I always tried to have movies returned in time to receive new movies for the next weekend... but didn't always succeed). I didn't really consider our house to be a "heavy user" at all, though from the discussion around here it seems that 12 discs is deemed to be pretty heavy use. Most of our rentals were TV series where 45 minutes of viewing here and there seem to go by quickly. In our case we do rely on NF instead of subscribing to cable/satellite (where nothing we really want to see is on anyway). Being that NF is 80% of our TV viewing, maybe what seems light to us really is heavy use.

Currently, with a 5-6 day round trip, it is impossible to time things for weekend viewing and our rental count has dropped as low as 6 in a given month. With 2 actually getting back in a reasonable time, we might make 9 this month! We've always had trouble receiving new releases (unless we timed our return mailings exactly right to get them). Right now I have one new release (Quantum Leap, Season 2, Disc 1) that has been "Very Long Wait" at the top of our queue since it's release in December (going on 2 months now). Quite honestly, I'm finding that the service stinks now and the NF customer service response to the situation basically shows that they don't care either.

You know, I don't really understand the cost model behind throttling. Back before online renting, physical stores used to reward you for returning a movie on the next day (like maybe a buck off the next rental or something). The reason was that it got the movie back into their hands quicker, which meant they didn't have to carry as many copies to meet the same rental demand (which meant more profit for them). You'd think that something similar would apply to online rentals as well. If I were a "heavy user" that would mean that I am returning movies more rapidly, which would meant that NF would not have to carry as many copies compared to the "light renter" who keeps movies out a week or more. Of course, the light renter has less shipping fees associated, so it all balances out in the cost model (shipping fees vs. cost of inventory). If NF were actually losing money when comparing heavy renters to light renters (as it has been argued) then I might see the business reason for throttling (though I still wouldn't agree with it). Due to the smaller inventory side of the equation though, I don't think NF really loses a penny from heavy usage renters compared to lighter usage renters. I think this is more about maximizing profit by introducing delays while they already have their hands on the movies (have your cake and eat it too?) than offsetting losses. I personally find that bad business practice.

This reminds me of working at an Internet provider back in the '90s. While we sold 'unlimited' internet service, it couldn't be used as a dedicated 24/7 connection. The fine print of the contract defined 'unlimited' to be the maximum amount a single person could reasonably use the connection in a given month. In other words, you have to sleep sometime. While there wasn't a defined number of hours where unlimited ended, we did run reports for >200 hours users to review usage trends and cut off accounts (cut off was a manual process) if we thought the connection was being used for dedicated use instead of unlimited use. Generally we tried to be fair and overlook all but the most abusive cases. The law has been very gray when it comes to defining the term 'unlimited' in advertising for quite some time now.

I imagine Netflix has some internal number that defines reasonable use for a given account type (what a single person can view in a given month and still have a life) and automatically throttles after that. The irony is that it goes in drastic contrast to the new 'profiles' feature which encourages multiple people on the same account (and higher rental rates as a result).

Another irony... after having never heard a NF radio ad, they've just begun heavily advertising in this area... of which possibly half of has horrible service (unless it turns out that I'm being throttled and not experiencing USPS delays). Maybe another Bowling Green trip/test is in order.

[REN]

Adding a cap also has problems. How many people without any knowledge of the available services will look at every other service's claims of unlimited and compare it against Netflix? Nevermind that the majority don't have the distribution capacity to match NF. As a new customer, I might assume most other aspects are standard and equal among the services and, without having any previous experience for comparison, "unlimited" would be a major factor in my decision to choose a service.

Another thing is that NF has flexibility without the cap. They satisfy the majority of their customers and can still take on the less profitable customers and keep everyone happy. They have the flexibility to provide 16 discs one month for a regular 8-disc user that happens to use the service more heavily that month for one reason or another. It comes down to balance for me, if they do everything fairly, they make the profit they need to be a successful company and provide the varying levels of service people want.

[manuel]

Mike, I'm not writing about how much I love Netflix. I don't. I'm giving my opinion about it. If your sick about the throttling issue why bring it up again? I only write about it as I live it day to day. Who's the fair one?

I don't burn rentals, I watch them:
http://www.manuelsweb.com/anime.htm

[CashForFlow]

CashForFlow,

“Question: Instead of throttling and pissing off users, why doesn't Netflix just take the honest approach and cap rentals at 12/month.”

First, Netflix does not throttle. There are a limited amount of DVDs and those who have received few DVDs are given priority. It's just greedy to complain after receiving 18 DVDs in a month.

A cap is perhaps likely in the future, but Netflix will never make the first move in order to avoid displeasing customers. The first mover would experience a massive lost of customers fleeing to other unlimited offerings.

[netflixer]

M-class - can you post your zip code? We're trying to figure out what's going on in Bowling Green... Thanks!

[Aron]

Agreed. Writing off this topic as unproductive. The term "throttling" deserves an entry in the Newspeak dictionary.

The subject itself is interesting from a system study perspective, and as a business strategy decision, but its not productive to engage in debate on this blog.

[HumBaby]

I am a very heavy user and while I watch
Netflix's shipping activity closely ever
since they started slowing me down last
summer, I still enjoy the service alot.

It burned when they started receiving
disks only to reply with "we'll get that
right out to you....tomorrow".

I am comparing BB for throughput right
now. We'll see.

Suffice it to say that I did not think
that the email from NF that the gentleman
received was unfair.

[A Former Netflix Evagelist]

I had to laugh at the comment two above saying "Netflix does not throttle." It is evident from the wide complaints and the email from Netflix itself that it does.

Is this fair? I think it is fair you if you reduce the throttled customer's monthly fee. Otherwise a company runs the risk of legal problems.

I find this quote interesting:
"This reminds me of working at an Internet provider back in the '90s. While we sold 'unlimited' internet service, it couldn't be used as a dedicated 24/7 connection. The fine print of the contract defined 'unlimited' to be the maximum amount a single person could reasonably use the connection in a given month. In other words, you have to sleep sometime. While there wasn't a defined number of hours where unlimited ended, we did run reports for >200 hours users to review usage trends and cut off accounts (cut off was a manual process) if we thought the connection was being used for dedicated use instead of unlimited use. Generally we tried to be fair and overlook all but the most abusive cases. The law has been very gray when it comes to defining the term 'unlimited' in advertising for quite some time now."

Actually the law is hardly "gray", I am currently working with an ISP. You must in writing specify overages, and you must notify a customer before taking ANY such action as you described. You also give the customer the option for a refund during the peiopr their service is limited.

In Netflix case customers are going to have to be given the option of getting refunds on several months service back to the fall when it is obvious this policy was begun in earnest.

If you recall when Comcast and MCI did this, they remove "unmlimited" from all their advertising and TOS copy before they started capping service.

Indeed, you can be asked to leave an all you can eat shrimp bar my friend, but they have to give you back your money.

Lastly in 2003 Netflix stated about heavy users:
They "are often some of our best evangelists" and "since marketing is one of our largest costs, we tend to look at those heavy users actually quite positively. We may not be getting as much gross profit on them but they tend to be heavily evangelizing the service to their friends."

Netlfix is on record stating these customers provide Netflix with a financial benefit.

Those same early adopter opinion leaders badmouthing Netflix is probably a very bad strategy for the same reasons rewarding them turned out to be a good strategy. Essentially their model seems to be to cherry pick the least active users out of their list.

The two biggest "buzzes" out there on the net and aroudn the watercooler are now:
a) Blockbuster has moved into online with competative slection, speed and pricing.
b) Netflix service has slowed to a crawl.

I think this will backfire when they, as they must, move to broadening their business outside of just USPS delivery of disks, which has a clear and not to distant endpoint. Netflix main advantage will be its brand name and goodwill among the very same early adopters.

That is my two cents,
A Former Netflix Evagelist

[mr2828]

I also live in the Nashville TN area (zip code 37067) and am experiencing the erratic and generally slow returns to Bowling Green KY. For instance my latest set of returns, I mailed 3 in one day back to Bowling Green. All picked up simultaneously from my home mailbox. 2 of them arrived on one day (3 days later) and the other one the next day (4 days transit). I don't grok how that is possible unless the Bowling Green netflix center is simply throttling my returns.

Regarding this thread in general, the statement at the top from the customer service just confirms that Netflix is indeed outright lying by stating they have an unlimited service. I will not be surprised if you get sued quite soon. I pay a lot for the 5 out at a time plan, I don't rip DVDs, we watch every one, but I am getting throttled every week now for months. I can tell you that if it continues, especially in the secretive and sleazy way it occurs now, I will switch to Blockbuster or Amazon as soon as they can beat your service in my area. Currently I am already seriously considering downgrading to 3 out and opening a test Blockbuster account. All because of this one issue!