Throttling: Punishing Loyal Customers

I’ve been a pretty happy Netflix customer for a little over a year now.  It sounds cliched, but it really has changed how I think about and watch TV and movies.  For example, If I can think of some off of the wall episode of The Simpsons that I’d like to see (that I can’t find on BitTorrent), I can pretty easily find and order it via Netflix.  Also, I’m much more picky and choosy about what movies I go see at the theater these days because I know that I’ll just be able to see it on my own comfy couch via Netflix just a few months down the road.   Until then, I’ve only had any real problems during the mail heavy time of December.  And to be fair, that wasn’t the fault of Netflix at all.   Up until now, I’ve been a loyal customer and would gladly suggest the service to anyone.

The operative words here are “until now”, however.  For around a month now, I’ve had a good number of titles on my list put into the “very long wait” category.  I didn’t mind at first, but now the wait is becoming ridiculous.  Recently, a thread was bumped on a messageboard that I frequent, explaining the whole scenario.  Amongst the babble, I found a pretty good explanation.

“Throttling”

Given sufficiently speedy mail delivery times, customers on “Unlimited” plans who turn around their discs quickly enough can receive enough shipments in a month that the company’s actual cost of delivery exceeds the subscription fee, making the customers unprofitable. Even below this point, higher volume customers are by definition less profitable than customers who receive fewer discs per month. If these customers become too numerous, there are various measures which the rental company can take.

One is the so-called “throttling” approach, which received a fair amount of publicity in regards to Netflix (which refers to the practice as a “fairness algorithm”). In this case, high-volume customers may experience a greater likelihood of (slower) shipments from alternate warehouses, when the nearest shipment center does not have the requested movie. Also, if there is a high demand for a particular movie, it is more likely that an infrequent renter will get priority over the frequent renters, with the latter receiving a movie further down on their queue.

Looking around some more, the problem is more widespread than I initially thought.  MSNBC reported on it some time ago, for example.  Being less pleased than I started out to be, I decided to give Netflix Customer Service a call.  And by the way, they of course make that number impossible to find on the site, if it’s even there at all.  If you need it, it’s 1-800-279-5688.  After around a half hour on the phone with one of their reps, it’s clear that the “throttling” policy is the real deal, despite the fact that they refuse to use the term.  Or that they deny that the policy exists, instead giving you a explanation of another eerily similar “fairness algorithm”.  At the end of the day, they even confirm the existence of throttling (in the best PR-speak) on their FAQ page.

I think that I would still recommend the service, but not to anyone.  If you are a hard core user, it’s best if you are a lover of off kilter titles.  If you are expecting to get a line of the newer releases as they are out, it’s not going to happen.  It’s still a wonderful service, but only within certain contexts.  Personally, it honestly doesn’t affect me that much.  I’m sort of a half and half user who uses it to check out curiosity titles, as well as ordering new releases.  But really, it’s a low down dirty shame that customers who aren’t knowledgeable or who aren’t fully utilizing the system are diluting it and causing problems for everyone else who might be fully using it.

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