Some months ago, I wrote a series of blogs comparing on-line DVD rental companies Netflix to Blockbuster. As long-time readers may recall, Netflix won the battle hands down...and as a Netflix customer for many years, I raved about their outstanding service.
Well, a lot has changed since then. Their service has become a little slower, I have had to wait longer for some movies to be shipped, and there has been a higher number of difficulties with lost shipments and broken DVD's. That is not to say, that all has turned sour. I still get a fairly high number of films shipped to me overnight. It's just that their overall service is not as good as it was when I wrote my comparative blogs.
Well, I may have found the reason. Dan Briody, the Chief Information Officer at Insight has written an article in this week's edition of eWeek. In it, he states that Netflix has a policy of flagging customers who rent a higher-than-average number of movies each month. Then, they automatically slow down the number of films they get on-time. They give preference to slower renters on new movies and delay the shipment of films to the flagged customers.
The reason, of course, is profitability. The more films that I rent each month equals lower profits for Netflix. They make far more money on slow-pokes than quick turnaround customers. If each type of customer pays $17.99 per month, its obvious that less rentals equals greater profits.
Its just another example of making more money from bad service that seems to be pervasive in today's modern world. If invite you to read this informative, fairly short article if you are interested in on-line rentals. And while I am not thinking of changing my Netflix subscription right now, it does give one food for thought.
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