Netflix Punishes Movie Lovers

**johnnymk** · 02-03-2006, 04:26 AM

Editor's Note — By Antone Gonsalves: InternetWeek

Nowhere but the Internet can you find a company that penalizes customers who like it too much. That's the case with Netflix, the online company that pioneered DVD movie rentals by mail, causing major headaches for brick-and-mortar operations like Blockbuster.
While most businesses would kill to get more customers to buy products or use their services, Netflix punishes their heaviest users by making fewer movies available to them and delaying shipments.

Those who find this hard to believe, only have to read Netflix's Terms of Service, which reads, in part, "In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service."

The reason for this less-than-customer-friendly policy is that Netflix makes more money off of the occasional user than from movie lovers who watch DVDs as soon as they get them, and then ship them back in Netflix's pre-paid envelope in order to get more movies. Since everyone pays the same amount each month, it's obvious why film buffs are Netflix's worst nightmare.

**MikeD** · 02-03-2006, 04:56 AM

Originally Posted by johnnymk

Those who find this hard to believe, only have to read Netflix's Terms of Service, which reads, in part, "In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service."

JMK, got link?

No doubt that this is true. My transit times immediately increased once I switched from 3 at a time rental to 8 at a time. They got dropped shortly thereafter.

On a related note, Blockbuster continues to improve their online service. Got this via email today:

Originally Posted by Blockbuster

As a valued BLOCKBUSTER Online® customer, you're the first to know:

Now you have another choice for your free in-store rentals.

It's up to you. Continue with your two free in-store movie or game rentals monthly. Or, opt for one free in-store movie only rental coupon every week. That's double the in-store value! Your choice. First to know. Only from BLOCKBUSTER Online.

Thanks again for being a BLOCKBUSTER Online customer.

I think I'll take that offer...

**renovation** · 02-03-2006, 05:08 AM

i have a 3 option the $5.50 bin at wally world .i hit it on a weekly basic

**chadlnc** · 02-03-2006, 05:35 AM

No doubt some of the problem is caused by those who rip and burn the movies as soon as they get them, then send them back the next day.

**johnnymk** · 02-03-2006, 07:18 AM

Originally Posted by MikeD

JMK, got link?

http://www.internetweek.cmp.com/

Link may not work without subscription

**ArkiStan** · 02-03-2006, 07:36 AM

Originally Posted by chadlnc

No doubt some of the problem is caused by those who rip and burn the movies as soon as they get them, then send them back the next day.

From a customer's perspective, I'd think it's rather the people that hold on to their rentals and never return them that are causing the serious problems with circulation, especially with the rare/foreign movies. I don't think it's right for Netflix to discriminate against customers based on their contracts, but if they really wanted to, I think they should rather be looking at people's turnaround times. While they probably make more immediate profit off people who hold on to their movies, penalizing them and promoting good circulation will assure that more customers get the movies they want, which will eventually prove beneficial for Netflix in the long run.

**Cubsfan** · 02-03-2006, 07:36 AM

Originally Posted by chadlnc

No doubt some of the problem is caused by those who rip and burn the movies as soon as they get them, then send them back the next day.

That's probably the biggest problem. Let's be honest, only a person with very little life can watch 21 movies in a week...

Oh, and about the blockbuster coupons. It's a little irritating, because the new coupons can only be used for movies, NOT for games. If I can't get games with my coupons, then I think I'll move to NetFlix.

**Houdini** · 02-03-2006, 09:48 AM

Also, buy only renting movies occasionally, they're more likely to profit to a larger extent. If you forget to order a movie for a month or whatever, you get charged. If you fully exploit the system, you cut into their bottom line. So their position, while wrong morally/whatever, makes business sense.