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Netflix May Start Penalizing Heavy Users

Old 04-24-03, 04:24 AM
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Netflix May Start Penalizing Heavy Users

Well I was over at another forum today and read that Netflix is implementing a program to penalize heavy users by making movies that are in higher demand harder for the heavy user to get by giving them longer wait times than those who don't rent allot. A few months back I stated in a Netflix thread that I thought they were doing something like this, but no one really paid any attention to my comment (oh well, I'm not even a memebr of Netflix anymore). Here's the link to a webpage that explains this more http://dvd-rent-test.dreamhost.com

What really blows me away, is that Netflix is trying to get all these new distribution centers around the states and get turnaround time down to one day each way. If they loose money by renting 10+ movies a month to any given member, then why in the world would they want to get turnarounds down so short? Maybe it's me, but they're shooting themselves in the foot.
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Old 04-24-03, 07:41 AM
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Are you referring to the people that pay more to have more than the standard 3 movies out at a time are going to get penalized, or do you mean the people who get 3 movies and keep 'em for 3 months before sending them back?

Just curious!

I don't use Netflix but my father does and he loves them. His main complaint is that he hardly ever gets any of the newer releases he has on his list...
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Old 04-24-03, 08:38 AM
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I think what the OP is saying, and what that website he linked to is saying, is that the more movies you get in a month, regardless of your 'X-out' plan, the less Netflix will focus on your queue.
In other words, if I am on the 3 out, and I get a movie, watch it that night, send it back the next day [have a very short turnaround time], I will suddenly start seeing more 'Short Wait' and Long Wait than another, less heavy renter, for the same DVD's. I would think the effect would be more visible for more 'popular' rentals, but not sure about that.
In still other words, if you really take advantage of the 'unlimited rentals' aspect of it, you will see fewer items in your queue be available.
The motive, though, is unclear--do they weight the popular disks toward non-heavy renters, so since they're renting less, they should get 'first dibs' on the popular things, which I might not have a problem with, or the things they want, or are they trying to penalize the heavy renters?
The guy who did the website really put a lot of work into the research, and his conclusions appear to be pretty obvious.
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Old 04-24-03, 09:36 AM
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Thanks for the post. I am now more likely to cancel my Netflix subscription when I take my summer vacation. I noticed last week that for a short period "Sweet Home Alabama" Availability was listed as Now. It has been listed as Very Long Wait or Long Wait. Since I must be identified as a Heavy User, a bug in their Availability Program explains the brief period of Now availability for this movie.
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Old 04-24-03, 10:58 AM
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I am a heavy renter on the standard 3 out plan, and I haven't had any problems. I would not be surprised if Netflix made newer or high-demand releases available to new members sooner, that's a good way to get people to hang around.

I don't really think this is "penalizing heavy users"--I don't think if I started sending back movies less frequently that I'd suddenly see my "very long" or "long" titles become available. They're catering to new users, and the effect on me is negligible. And really, Netflix *is* a video store, and it's bound not to have everything you want exactly when you want it, just like if I went out to Blockbuster or a local store.

But since I have about 200+ movies in my queue, I don't have a problem getting something I want, even if it's not what's at the top of my list. And a few months ago there was an unusual delay with my top few movies, so they sent out a fourth movie at no additional cost. I thought that was great.

I've had the Hitchhiker's Guide to the Galaxy sitting on top of my queue for a couple of weeks now, and it keeps getting passed over for the next movie in the queue, but I'm sure it will come eventually.
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Old 04-24-03, 11:03 AM
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Wow - those are quite some graphs. Too bad I didn't read through it all.

Briefly though, there was some discussion here several months ago that indicated new users were given priority, and typically everything was available "now".

If they loose money by renting 10+ movies a month to any given member, then why in the world would they want to get turnarounds down so short? Maybe it's me, but they're shooting themselves in the foot.
I listened to their earning press conference last week, and what they essentially said is that yes, they do begin to lose money with members who rent more than 10 per month (on the 3 out plan), but those are also the members that are most likely to recommend the service to friends. They view you as cheap advertising, and they love it.
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Old 04-24-03, 01:41 PM
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Originally posted by Movie_Man
I listened to their earning press conference last week, and what they essentially said is that yes, they do begin to lose money with members who rent more than 10 per month (on the 3 out plan), but those are also the members that are most likely to recommend the service to friends. They view you as cheap advertising, and they love it.
Never would of thought about that, but it sounds pretty good.

Ben732- What the guy was saying who did this research is that customers who get allot of rental turns per month will not be a priority for them. They actually try to give the newer and lower rental customers priority over those who actually take advantage of the unlimited rentals. So say you have two customers on the 3-out plan, "Joe" who gets 20 rentals a month and you have "Joe Smoe" who is new and only rents 6 movies a month. Well the guy who is newer and rents less movies is going to get priority over the guy who gets more rentals per month and has been a customer longer.
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Old 04-24-03, 02:57 PM
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This is an outrage!
So what if I weigh a little more than the average renter. Why should I be penalized! I'd file a lawsuit if my ass wasn't melded to the couch.
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Old 04-24-03, 03:47 PM
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Wow, I had read this thread earlier but didn't bother to click on that link until now... that's someone with WAAAAY too much time on his hands.

(not that I don't appreciate the effort...)
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Old 04-24-03, 08:29 PM
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Originally posted by bboisvert
Wow, I had read this thread earlier but didn't bother to click on that link until now... that's someone with WAAAAY too much time on his hands.

(not that I don't appreciate the effort...)
That's what I first thought as well. But it's very interesting and answers allot of my suspicions.
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Old 04-28-03, 10:08 AM
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It is interesting, but I don't have too much of a problem with it. The heavier users are the most expensive. Light users are the most profitable, and include new accounts. One could argue that by screwing over the heavy users those users will be more dissatisifed, but if they are really renting 10 films a month for their $20, they can't be too displeased.
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Old 04-28-03, 02:46 PM
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Interesting read, and I agree that this guy has way too much time on his hands. I always thought I was a person who rented a lot, since I live in the same city that they are based in. But I do not have any problems getting movies. All though I am the type of user they probably like. Because I just make sure I have a butt load of movies in my queue, and I always seem to get movies. This guy says they have already been doing this. Has anybody else done a test like this to see if it effecting them.
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Old 04-29-03, 10:16 AM
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I read about this on www.slashdot.org where they linked to some article. This is how I understand it. On high demand movies with limited supply the people with the least rentals in the preceding billing period will get priority. This includes new users and low volume renters.

Personally I don't see a problem. This is one of those decisions where you are going to tick someone off. I think other than profitability from their opinion a high volume renter will get another movie from their queue and won't mind waiting for the one that is in high demand.
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Old 05-07-03, 08:23 AM
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Originally posted by Movie_Man

I listened to their earning press conference last week, and what they essentially said is that yes, they do begin to lose money with members who rent more than 10 per month (on the 3 out plan), but those are also the members that are most likely to recommend the service to friends. They view you as cheap advertising, and they love it.
Having heard my share of earning reports (though I did not hear this one) I can tell you that this is just spin. What do you expect them to say?

Q: Aren't you losing money when people rent more than 10 movies a month?

A: Yes.

Q: What are you going to do about it?

A: We have no idea. Our big selling point is that you can rent as many movies as you want, so we can't limit the number of title you can check out a month, or go to a 'per movie' pricing plan like Blockbuster. Taking such steps would drastically reduce the number of new subscribers and we would likely lose a large number of current customers. We are letting ourselves be screwed by these 10+ renters, and there is nothing we can do about it except bleed money. But our company is still sound! Please reccomend our stock to your clients.

They can't say that, and keep their jobs. So they have to think of an explination. They really only have three choices:

1) This is a temporary problem. "Becasue of terrorism and the SARS scare, people are staying home and renting more movies. After the war is over, people will go out more, and rent less. Gee, I hope they just don't cancel their subscription." That won't work.

2) It's something that they are taking steps to solve. As mentioned above, they can't because the "unlimited rentals" for one price is thier main selling point.

3) It's not a problem at all. This is what they choose. I'm surpriseed they didn't use the "This is an insignificant number, only 0.001% of subscribers" excuse. I can only assume that there are a fair number of 10+ renters. So they went with "We LIKE it! It's free advertising." Using this same logic, shouldn't they send the new titles to the people who are touting their company the most? As it stands now, these 10+ renters are going to say "Yea, I get 20 movies a month, but it'll be 6 months before I can get a copy of "Catch Me if You Can." So I just rented that at Blockbuster."

Basically, their statement does not agree with their policies.

-Videophile, who has too much time on his hands too.
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Old 05-08-03, 05:05 PM
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hmm interesting. im on the ultimate 8 dvd plan. i rent bout 40 dvds a month. so they must be losing alot of money on me. i pay 43 bucks.

oh, and i do usually get the new titles. like this week I got The Emperor's Club and Extreme Ops. I bought Catch me if you can. i've gotten pretty much all the new titles I wanted during their release week. The only two I havent really gotten was Sweet Home Alabama, finally got it this week and Serving Sara, still waiting for it. The key is timing, you gotta mail your movies back at the right time, but if you dont, then yeah you're going to wait a while like me.

Last edited by duy37; 05-08-03 at 05:09 PM.
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Old 06-27-03, 11:31 AM
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I just signed on for the regular service, and personally couldn't care about new releases. Back catalog titles, try before you buy, is what I am interested in, and Netflix has an interesting collection at a nice price. If I really wanted new releases I'd preorder them to get them on release day.
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Old 06-27-03, 06:34 PM
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Looks like we will have to join Netflix on a month by month basis. Sign up and cancel every month so we have no history.
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Old 07-03-03, 10:15 PM
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Videophile: Brilliant analysis.
Namlook: Lucky you have so many homes.
Excelsior: Just the advertising they were looking for! (based on the truth and nothing but).
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Old 07-04-03, 05:16 AM
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If I don't get 10 movies a month, I see no point in using their service.

I'll stick to the mom and pop video store.
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Old 07-04-03, 07:27 AM
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"Namlook: Lucky you have so many homes"

Huh? Just use the same home address and a new hotmail e-mail address so the accounts are not connected. I'm not talking about signing up for multiple free trials. I'm talking about paying for the service, cancelling each month, and signing up again at regular price. Nothing wrong with that.
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