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Analysis of Netflix's DVD Allocation System
dvd_rent_test writes "Netflix uses the number of movies you have previously rented to determine your priority in getting movies. The more movies you rented during your last billing cycle, the less chance you have of receiving a movie versus an individual who has rented fewer movies. This is why new users have great success getting their movies and older or heavy users have a difficult time getting some movies."
I mean, after all, waiting for movies has got to be increasing piracy ratings. It should only be fair that %93 of Netflix's profits go back into the MPAA to make up for lost sales caused by people waiting on movies.
Everyone is entitled to their own opinion. It's just that yours is stupid.
I was wondering about this. I have been a member for almost two years, and I am very efficient about sending the movies back quickly (thus maximizing the total number of movies I can see.) I have been wondering for a long time why I never seem to get any of the "Short Wait" movies, much less the "Long Wait" ones. Well anyway, I'm thinking about cancelling Netflix anyway. The post office has lost (or stolen) a number of movies I've sent back anyway. I'll probably just get a PVR instead.
It's a paid service, you would think that they would want to cater to their most active customers to keep from losing them. On the other hand, you might think that since you pay a flat fee that those who didn't make good use of their account in previous months but paid the full fee anyway deserve a little extra priority.
Hmmm... I'm not sure that anyone really has a reason to complain to loudly about this. No-one is being ripped off. Still, I'm not sure I understand their logic in implementing this way. In the end I'm not sure it is in their interest to give preference to either group: the frequent users or those who pay and don't play.
lysergically yours
DVD burners are cheap now. They ought to just license the ability to burn-on-demand from the MPAA. That way they never run out of Titanic or whatever. Perhaps the MPAA would need to fund "UN inspections" to ensure that the excess DVDs are destroyed.
I notice blockbuster charges ~$3.90 for all DVDs now, "because the cost of replacement for damaged DVDs is so much higher than VHS". Sha, right, why blockbuster's don't all have DVD burners in the back room is purely a testament to bad/non-existant negotiations between Blockbuster and the movie companies.
I had to stop using NetFlix a couple months ago because my USPS carrier wouldn't consistently put them in my apartment's mailbox (leaving them outside risking theft--those big red & white envelopes just scream FREE DVD!).
When I went to kill my membership, they offered me the same membership for less money, what was 3 DVD's for $20 a month, was now two or three bucks less. And the savings could be had on all there other plans, if agreed to use their services for a year or so.
Seems like they've got some pretty "creative" ways of handling their customers. I'm content buying DVDs off of eBay.
Anybody else think they're a little "funny"?
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety
And, of course, the account B was the new one that was having an easier rental time. So it must be that Netflix gives better rental times to people who use Internet Explorer! Microsoft owns everything!
Philip Sandifer's academic website
Allocation strategies always involve prioritizing one type of customer over another - in Netflix's case, this current strategy would seem to make sense while they are trying to grow the business and rake in new customers. Assuming that there aren't significant supply chain issues that are getting in the way of prompt availability for all customers, like a larger number of people than expected not returning DVD's in a timely fashion, Netflix will need to revisit this at some point before they screw their loyal customers one too many times.
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I was one of the "first 1000" to sign up with Netflix. If I remember right they had the "Lifetime membership for $9.99 a month" type thing going on. I loved the service -- until they started charging my credit card "$14.95" a month because they were a little optimistic during the whole:
1. Send out unlimited DVD's for 10 bucks a month and let the user keep 4 at any time -- for any length of time (pick up all shipping costs).
2. ???
3. Profit
I was burned that the price kept going up -- and I don't take nicely to automated withdrawls from my accounts going up anytime the source decides to reinvent their business logic. I should either have to sign up again at the higher price, or sign a document authorizing the higher price.
(+1 Funny) only if I laugh out loud.
Look, there are only a certain amount of DVDs to go around. In the article, it states that the priority is based solely on the LAST billing cycle. So, if you have a bad month getting the movies you want, you'll have a good month the next time, then bad, then good.
It's not a perfect system, but given limited resources, it's the fairest thing they can do and still keep prices reasonble.
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I had a similar experience with Netflix. A bunch of current releases were listed as long wait or very long wait. I complained to Netflix and amazingly that day the status changed from long wait to short or available now. Coincidence? I thought so originally but this report sort of sheds new light on things.
RTFA...it has nothing to do with your trial period. Your rental availability is based on the account activity of the last billing period. For example, if you only rented one movie last month, then this month you would have good rental availability. If you rented a lot last month, then this month you would have crappy rental availability.
I think it has more to do with the fact that people who are renting a lot are obviously watching more movies. Therefore, the chances that they'll find another movie that they like if the one they REALLY want is not available are pretty good. However, if you only rent sporadically, then the chances that you are going to get frustrated and terminate your service if the movies you want aren't available are pretty good.
My first reaction to this article was that Netflix was way off the mark. However, if you really look at it it makes sense. They are keeping the people who are most at risk for cancelling the happiest. Those people who rent a lot of movies no matter what are less of a cancel-risk, so Netflix isn't as vigilant about making sure they get their first choices right away.
Social Engineering Expert: Because there is no patch for stupidity.
1) They are "punishing" the people that make the most use of their service, rewarding those that make the least use. Considering they charge the same amount of money either way, it sounds like a good idea to me.
2) They are catering to two entirely different clientel: Set A) that watch a ton of movies, Set B) That watch only a few movies. Set A pays the same as set B but gets more quantity at the cost of less quality.
Either way, it sounds like a GOOD, FAIR, business plan to me.
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I just recently cancelled all my cable movie channels and got two library cards (this town and the next town over). I check one or two DVDs out from the library every other day. Sure, they are crappy old movies, but it sounds like that's the bulk of what you get on Netflix and on most of the cable channels anyway. Your taxes already pay for it. Be an old fogey and use the library! It's civic!
I, for one, thing it is *appalling* that NetFlix would discriminate against the elderly and the fat-assed.
m.
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Netflix had a big spread in Wired several months back... the business model of the company is such that they are only profitable on accounts which rent 5 or less movies a month. This jives with the linear availability chart at the end of the linked article. When the account had 5 or less rentals in the previous billing cycle, availability of movies in the current cycle is 0-1. But once you pass 5, it decreases.
In other words, as long as your account is 5 or less and you are profitable for them, you will get movies quickly. If you are renting more than 5, it seems they slow you down in an effort to limit you to the 5 through delay tactics.. rather than just saying "up to 5"
Kinda sneaky to pitch unlimited rentals and then use false availability numbers to limit your customers to a preset amount.
I think I will just stick with the local video store. I can rent 4 or 5 movies there for 20 bucks a month without the waiting time OR lies about availability.
I think the article is pretty good, however in my own playing around with my rental queue, I am convinced that queue length is somehow a factor.
When I joined Netflix, I got my shipments in two days from the Santa Ana facility, and I almost always got the top three on my list. Now it seems like they take three days at least. (Get shipping email on Monday, DVD arrives on Thursday.)
Now that I've been a member for six months or so, the top of my list has aggegated together about six movies that are all "Very Long Wait" and to be quite honest, I've never seen them anything other than that. I don't think I will ever get them.
FWIW, I do beleive the article is essentially correct and various service levels with Netflix decrease over time.
It also would not surprise me in the least if they analyze your viewing habits to determine if you are likely to stop using the Netflix service. It would probably be called the Geek Regression.
And just for kicks, the list of movies I will never see from Netflix: Solaris (Original 1970's version), Trees Lounge, Raging Bull, 24 Disc 1, Sopranos Disc 1. Has anyone gotten these?
Never confuse feeling with thinking.
Ah, people are missing the other side of the coin here.
Look at this example:
Lets say in January, Joe rents 10 movies, but Mary only rents 1. During the next month more movies will be available to Mary because she rented less.
So in February Mary rents 10 (because more were available) but Joe only gets 1 (because less were available).
Now over the two month period both paid $19.95 per month, and both AVERAGED 5.5 rentals per month. So it comes out fair for both parties. When you look at it this way it seems totally fair and justified. Although a little strange I'll admit.
Not only are they keeping the people most likey to cancel happy, they are also keeping the people with highest profit margin happy (less rentals means less shipping cost to netflix). So if could be viewed as simply good business practices to keep the customers you make the most money off of happy.
I've been a Netflix subscriber for over a year. I'm on the 5 at a time plan because we have four people in my family adding movies to the rental queue.
For the most part we get everything that we ask for amazingly fast. It's very rare that anything hangs up on the queue with a long wait. Even highly popular and newly released items arrive quickly. And since we are in the Bay Area not far from Netflix central the turnaround time is often just two or three days.
I'm very happy with Netflix. In a good month we'll easily get 20 or more DVDs for an average rental price of under $1.50 delivered right to our door.
Rich
You're partially right...but it has everything to do with the trial period...
During the trial period, you have an empty history. Therefore, you get every movie you want (almost) immediately. After you do this and start thinking the service is so awesome in terms of title availability, you continue and, as long as you are trying to use the service to get movies you want (as opposed to being a dormant subscriber who pays but never gets anything), you get screwed because you'll continue to get punished for wanting to take maximum advantage of the money you're spending.
Why do I h8 apple?
I don't know how well it's doing as a business, but there are many advantages to renting from Netflix rather than the big chain stores. They let you keep movies as long as you want. They have a far larger inventory than any brick and mortar store. Blockbuster is great if you're looking for domestic new releases, or you need to rent something in a hurry, but they blow half-digested-popcorn-chunks if you're looking for foreign or old (and by old I mean, older than a couple of years) movies.
Plus they actually have NC-17 stuff. Most Hollywood and Blockbusters won't rent those, or carry only censored versions. Personally, I prefer to be treated like an adult.
The only problem with this is if you wish to watch a series of DVDs. I tried to watch the entire 3 seasons of the Sopranos. I finished them a month ago, but never got Season 2, #1. It was first listed as 'short wait', three weeks later, it went to 'very long wait.' I'm still waiting, and its still 'very long'. The same seems to be true with '24'. Disc 1 has always been 'very long wait', but 2-6 are available 'now'. I wish they'd fix that.
"It's so convenient that the average Netflix customer watches five movies a month. Some subscribers rent twenty or more. (Which is a problem: Netflix loses money on postage for households that rent more than five a month.)"
So, if this is true (and hopefully Wired has become more trustworth as a "news source" in recent years...), then obviously they want to discourage people from renting more than 5 per month.
The method above seems like a pretty good way to do it!
.. half the movies my girlfriend picked out have "Very long wait" which means that it's just that much longer that I won't have to suffer through watching "Divine Secrets of the Ya Ya Sisterhood."
;)
As a prize, I got "I'm gonna git you, sucka!" nice and early.
You are kind of missing the point. The system doesn't make it so you can't rent as many movies, it just makes it less likely that you are able to rent a popular movie. So Joe could still watch 10 movies, just not 10 that are in high demand. So he might get UHF or Kentucky Fried Movie while having to wait for his beloved About a Boy.
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They don't track it by that, it's by email. I have let my netflix account lapse twice now, and restarted twice. One time I started with a different email address and made a new login, and it didn't "know" about any of my old rentals. The other time I used my old email and login and it did know about them.
RTFA -- they don't crap over old, established customers -- they crap over people who had a high amount of rentals in the last month. It doesn't matter if you've been with them 2 months or 12 months. So yes, by their rule, your first month will have a quick turnaround in rental time, but after that, it is based on the last month.
What would you rather them do--make all new people wait the longest? Great business plan.
I don't have a problem with a company showing customer's loyalty, but you can't expect them to have a DVDfairy hanging out in their office crapping out DVDs on demand--there's a limited number, and this looks like the most reasonable way of distributing them fairly. You get a good month, then you get a not-so good month.
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My wife and I used to rent 10+ movies a month on the standard 3-out plan. But then we got busier and started watching less and less. Lately we've been lucky to watch 2 or 3 movies in a month, and a few recent months have only seen one. We switched to the 2-out plan sometime last year to save money. I later realized that this plan is not normally offered - our account got flagged and we were offered the plan based on our rental history. Netflix kept a customer and we stayed happy by paying less.
My sister-in-law's story is even more phenomenal. Her financial situation dictated that she cancel completely, which she did. Netflix came begging to get her back, and ultimately agreed to keep her on for a mere $7/month! (I thought it was $7 for 6 months, but this sounds more likely) She's a damn good haggler, so I don't know if this would be common at all; I imagine if they did it too much, they would lose money.
I've always been impressed by the fact that we've been able to get just released movies very quickly. I suppose maybe that's one reason we haven't canceled despite not getting as much out of the service lately. When we do use it, it's always top notch, so Netflix still gets our money. I don't recall having major problems even when we were renting a lot more, but I suppose Netflix has grown considerably since then. I always assumed they kept the service good by expanding to meet customer demand. It'll be interesting to read more comments and see how other people's experiences relate to the study's results. I'd love to see the same thing conducted again with a larger sample size.
Say hello to zMac.
I've been a Netflix customer for quite some time and I've enjoyed the service immensely. But I wonder...
Why do you keep sending me "Free Trial" offers on the inside flap of each envelope? Why do you keep preaching to the choir?
Even if I had 100 friends, they'd be so sick of me handing them "Free Trial" coupons that they'd stop talking to me. Why not subsidize some of MY rental fee or the number of movies I can rent by offering your PREMIUM advertising space to companies like Best Buy or Circuit City. Or, let the advertisers offset the cost of purchasing a larger quantity of DVDs and remove LONG and SHORT waits altogether.
It seems so obvious to me that the envelop flap should be used for advertising - ANYTHING OTHER THAN A NETFLIX product. I would love to see a coupon for $2.00 off any DVD with the purchase of any other. How about $2.00 off a pizza? How about $2.00 off a movie ticket? Why not co-op the envelope space and sell to local area grocery stores or whatever? Use your imagination!
Use the back of the envelop flap for something that is going to benefit the CUSTOMER. Advertisers are constantly looking for new places to advertise. Here you go, a perfect space.
And when you're all done absorbing this idea, you can send me a check or a job offer. I'm a simple man.
Sincerely,
Andrew