Is Netflix Rationing Online Movie Viewing?
Some of us remember that just a few years ago many Netflix customers were totally pissed off when they learned that Netflix’s policy of “unlimited DVDs” per month was a scam. In theory, if you were signed up for two movies at a time, as soon as you returned one movies, they were supposed to ship the next one on your list right away.
They didn’t.
In fact, consumers learned that Netflix shipped DVDs faster to customers who rented fewer movies than to their “best” customers who signed up for the most.
Hell hath no fury like a movie junkie scorned.
That’s what Netflix discovered when their most devoted “heavy users” found that the movie rental service had an undisclosed policy of shipping films faster to those customers who rent the least.
In a class-action lawsuit filed against the nation’s largest online DVD rental company in September 2004, the company was accused of false advertising for its claims of “unlimited rentals” and “one-day deliveries.”
When it agreed to a settlement due to be finalized this month, Netflix denied any wrongdoing, but conceded it has a policy that allocates movies more quickly during shortages to those who rent less frequently.
That was a report from Cantonrep.com from back in 2004.
Four years later Netflix appears to be scamming consumers again, this time with their “Watch Instantly” product, which is supposed to allow customers unlimited video streaming. The service was launched earlier this year, in part as a preemptive strike against iTunes, which offers online video rentals.
According to the New York Times, these are supposed to be two different markets — the online rental market of current releases (iTunes), and the free online streaming of less current movies (Netflix). With all due respect to the Gray Lady, there is some market overlap among consumers in that often the decision to watch a movie online is based on convenience — “I want entertaintainment for a few hours, and I want it now!” — and it doesn’t matter if the meal is four star or something close, as long as it is filling. (Anyone who has barged in the Golden Arches at 11 pm for a Big Mac understands the analogy.)
The benefit sought for both products is immediate gratification, not a gourmet dinner. But that is precisely where Netflix is no longer living up to its end of the deal.
A neighbor of mine has complained about incredibly long wait times for Netflix video streaming to begin. Basically, Netflix is telling my neighbor, who has one of the fastest PCs on the planet as well as the fastest cable service available, that his connections are “too slow to show the movie.” Sometimes the messages are so ridiculous — “your movie will start in 10 hours” — that is it clear this is not a local problem but another Netflix attempt to control customer behavior.
My neighbor and I contacted the local cable provider just in case. Everything was fine on their end. We reset the modem. We bypassed the router. We did some trace routes and found nothing on this end to delay the movies.
One of two things was obviously happening –
1) As it did four years ago by delaying delivery of physical DVDs to its high usage customers, Netflix is again rationing its services to customers who use the “Watch Instantly” service too frequently.
2) Netflix is unprepared to deliver the services it promises, either with overloaded servers or other internal resources that can’t keep up with demand.
In either case, consumers are paying for services they aren’t getting. One approach we tried and found successful at times was the old “don’t take no for an answer” strategy. As soon as Netflix told us we had to wait three hours or four hours or whatever, we tried reconnecting to the movie. Sometimes it took us up to 10 attempts before we were connected and the movie started streaming. But at least something was working.
If you plan to sign up with Netflix primarily for the instant streaming, beware. You might not get all that Netflix promises you. Even if your main interest is getting movies through the mail and you plan to infrequently use the online streaming, it may be even less frequent than you think.
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