Posted 2/11/2006 04:30:00 PM by Douglas

Netflix users complain about throttling:

Netflix typically sends about 13 movies per month to Villanueva's home in Warren, Mich. — down from the 18 to 22 DVDs he once received before the company's automated system identified him as a heavy renter and began delaying his shipments to protect its profits.

The same Netflix formula also shoves Villanueva to the back of the line for the most-wanted DVDs, so the service can send those popular flicks to new subscribers and infrequent renters.

The little-known practice, called "throttling" by critics, means Netflix customers who pay the same price for the same service are often treated differently, depending on their rental patterns.

Thirteen moves for $17? Instead of complaining about your $1.31 movie, how 'bout going down to what's left of your local video store and see if you can get that deal from them. Good luck.

But what motivation does Netflix have for doing this?

A September 2004 lawsuit cast a spotlight on the throttling issue. The complaint, filed by Frank Chavez on behalf of all Netflix subscribers before Jan. 15, 2005, said the company had developed a sophisticated formula to slow down DVD deliveries to frequent renters and ensure quicker shipments of the most popular movies to its infrequent — and most profitable — renters to keep them happy.

Nothing wrong with keeping your most profitable customers happy, but this just makes no sense. If their rental histories say that customer A is going to sit on the movie for a week while customer B is going to return it in two days, what possible motive would Netflix have to send it to the slow-poke? Customer B is going to return it, and it'll be out in Customer A's hands in almost the same time period. Everyone's happy, right?

What this doesn't address, which really surprises me, are the people described in this story that rent 22 movies a month. Are they sitting by the mailbox and watching each movie as it arrives, or are they making DVD backups of these movies on their computers? I can't believe Netflix hasn't addressed this issue yet, considering how rabid Hollywood has become about digital piracy as of late.