Netflix: FAQ du jour: Expected Arrival Dates

"Q: Why are the expected arrival dates different for movies shipped on the same day?
A: We try to ship you movies from your closest shipping center. If a particular movie is not available at your closest shipping center, we will ship it to you from another location. This can increase delivery time, and therefore, it may have a different expected arrival date."

Netflix Closes Center in Stamford, Conn.

You who live in New England might already have noticed this, but Netflix has closed the Stamford, CT distribution center, according to an archived article in the Stamford Advocate published 5/25/04. Netflix spokesman Brinton says you are now being served by the DC in Queens (Flushing, NY).

Most popular online movie sites

Of the top online movie sites, Netflix is third, behind Yahoo and IMDB.

Netfix's web site design

How Netflix redesigned their Web site in August 2003: here's an analysis from the archives of eleganthack blog.

Late fees

This old article is interesting because of the surprising statistic regarding late fees:

"[Netflix] found that 11 percent of movie renters return movies unwatched because of the time restrictions and that 20 percent pay, on average, about $7.60 in late fees for every tardy DVD rental. "

That's rough. For one in five of us, we're paying $11.00 to rent a DVD for a week from Blockbuster. One in ten of us doesn't get to see the movie at all!

Valuing Netflix subscribers

Netflix's enterprise value is $1.3 billion, valuing its subs [that's subscribers, as in, you and me] at $1,000 per head.

My Netflix Queue

Listology allows me to post my Netflix queue for all the world to see. It's free. You can do it too. Thanks Jim!

Manuel's Netflix Site Has Been Updated

Manuel has made a Web site detailing his experience renting anime from Netflix. He lives in the Detroit area. He's been a member since August 2003 and as of June 2004, he's received 312 discs, eight of which were damaged and two mislabelled.

Defying the Naysayers

If you've been keeping up with all the predictions about Walmart, Blockbuster, and VOD driving Netflix out of business, here are a few reasons to bet on Netflix:

Strong Internet brand
Economics of DVDs
Economics of VOD

Today's Featured Competitor: Clean Films

Family-edited films on DVD available to rent online
Delivered to your door by mail
Free shipping and handling both ways
No late fees
All you can rent for a flat monthly fee of $19.95 (two-out plan)
Cancel any time
Free 15-Day trial
Appears to be located in Utah
Same titles available for purchase

I couldn't find out how many titles they have, but I guess about 3000. The library is small because the films have to be edited first.

Family Edited Movies are backup copies of popular Hollywood DVD titles that have been edited to remove nudity and sexual situations, offensive language, and graphic violence.

90,000 DVDs. No shelves.

A Netflix hub reveals a rhythmic flow of DVDs, bar codes, and Band-Aids.
From: Fast Company Issue 74 September 2003, Page 38
By: Lucas Conley

There are no Nerf balls or cappuccino makers at the Worcester hub. More striking, given the hub's stock of 90,000 DVDs, there are no shelves. "I came from a traditional warehousing background," says O'Handley. "I was like, 'Okay, I want Shrek ; I'm going to go to slot S-407 . . . right?' " He smiles at his innocence. "Not so."

Instead, an ingenious daily dance takes place. Each morning at 8:00, the U.S. Postal Service (cheaper and quicker than the alternatives, incredibly) drops off "pumpkin carts," orange bins with thousands of returned DVDs from all over New England. Operators scan the discs, collecting returns data, which computers at Netflix's San Jose headquarters match to new orders. After lunch, the Worcester operators rescan every disc in their inventory; with each scan, they act on instructions from San Jose to "Ship Disc," if a customer wants the film, or "Scan Tomorrow," if not.

Regarding postage:

Presorting saves Netflix six to seven cents per DVD, O'Handley says.

Silent Film warning

There should be a warning on the silent films in the Netflix movie listings so that people will know what to expect. I'm sorry that this member (S.S.) was disappointed (from the member's review on Netflix):

"I expected this to be a B/W movie, but i did not expect for music to be playing over the actors actions and periodic flashing of text on the screen to be read. There is no spoken dialog for this movie. I turned off within 15 minutes."

The film reviewed is Uncle Tom's Cabin, made in 1927, before the sound era began. It is great that Netflix has opened up a whole new era of film-viewing for people who might otherwise never get to see such an historically significant film like this one.

Solidarity

I'm hurt that my friend Mike at Hacking Netflix got rebuffed by the PR folks at Netflix when he requested an interview or press access or something. You're not alone, Mike.

Naughty Netflix

Twice in one month, Salon posts an editorial about Netflix! Using the relationship metaphor again! Do these people think in terms of anything else but sex?

Netflix FAQ du jour: Available Now, but not shipped--Why?

"Q: The top movie in my Rental Queue says Available Now but I was sent a different movie. Why?
A: We make every effort to ship you as many of your first choice movies as possible, but our inventory levels are constantly fluctuating. The movie that is shipped is the movie that is available at the time of shipping."

Change of plans

I have changed from the 5-out to the 3-out plan, for a couple of reasons.

#1 I have other things to do. It's summer where I live. Social opportunities abound. I haven't been able to keep up with my viewing. If you can't watch 'em, don't rent 'em! Last month, I watched only 12, and so far this month, only 7. The 5-out plan requires I watch a minimum of 10 per month to break even with the brick-and-mortar stores, IMHO.

#2 I have other things to do, two. There's an historic theatre here in Greensboro that's begun an Orson Welles series AND an independent film series, so I'm there twice a week. And there are films opening almost every week that I want to see in the first-run theatres. (Spiderman, anyone?). I haven't even seen Harry's 3rd yet!

Hacking NetFlix : Great Video Industry Overview in USA Today

I'm blogging a friend's blog of an article. Is that allowed?

I like the way he summed it up:

Studios make more from videos than they do from theater box offices. Last year, people paid $8.2 billion to rent videos and $16 billion to buy them, compared with $9.5 billion to see movies at the theater.

Equally impressive, studios in the first half of 2004 licensed 20 movies to VOD in 30 days or less. That's up from 14 in all of 2003 and three in 2002. This year's fast-to-VOD films include X2: X-Men United, American Wedding, The Lord of the Rings: The Return of the King and Mystic River.

That's why he [Blockbuster CEO John Antioco] doesn't think studios will continue to shorten the period retailers have in which to offer hit movies before they appear on cable, satellite and the Internet. If they did, retailers and consumers would buy fewer DVDs. Because studios make about $2 on each VOD showing, they'd need about eight rentals to make up for just one $15 DVD sale lost.

Thanks Mike!

Video-on-demand in constant flux

Video-on-demand in constant flux

Three reasons that VOD could become a reality in a year or two:

More outlets: Starz, Tivo, Netflix, etc
More in-home capacity: Broadband and digital video recorders are growing
More content: Studios are opening up

Further analysis of reasons Netflix wants you to receive more discs

Form 10-Q

This information is from the Form 10-Q which Netflix filed with the Securities and Exchange Commission at the end of the first quarter of 2004. "Subscriber churn" is the term used to describe how many subscribers quit the service or fail to sign up following the end of their free trial. Lower subscriber churn is their goal, because it reduces marketing expenses and increases revenue.

increase in subscriber churn may signal a deterioration in the quality of our service, or it may signal an unfavorable behavioral change in the mix of new subscribers. Lower subscriber churn means higher customer retention, faster revenue growth and lower marketing expenses as a percent of revenues for any given level of subscriber acquisition.

"Subscriber acquisition cost" is the term for how much it costs Netflix to find and keep its customers, through advertising and promotions. They want to keep this low. It's cheaper to keep you as a customer than to try to find a replacement for you if you quit, which is why they want you happy. If you rent alot of discs, you'll be happy (if you watch and enjoy them, of course).

For example, disc usage may increase, which depresses our gross margin. However, increased disc usage may result in higher subscriber satisfaction, which reduces subscriber churn and increases word-of-mouth advertising about our service. As a result, marketing expense may fall as a percent of revenues and operating expenses margins rise, offsetting the impact of a reduction in gross margin.

It is also in their interest to increase the number of titles they distribute, because it makes you happy, you share the good news with your friends, and Netflix spends less on advertising.

We can also make trade-offs between our DVD library investments which have an inverse relationship with subscriber churn and subscriber acquisition cost. For example, an increase in our DVD library investments may improve customer satisfaction and lower subscriber churn, and hence increase the number of new subscribers acquired via word-of-mouth. This in turn may allow us to accelerate our subscriber growth for a given level of marketing spending.

These factors give me reason to disbelieve that Netflix would deliberately slow down the number of discs you receive under any circumstances. I realize this is contrary to the popular findings of DVD Rent Test, but it shows there would be no financial incentive for them to provide poor customer service.

I have observed a periodic slowdown in turnaround of discs, but I think there is an explanation other than that they are doing it on purpose. My theory is that disc delivery times experiences occasional slowdowns as Netflix adjusts to rapid growth. When a new distribution center opens, there is rapid overnight growth in the number of local subscribers, which puts a powerful strain on the new DC with its new, inexperienced staff and management. I think we should give them time to adjust. You'll see that your disc turnaround times will return to normal in about a month, if you hang in there.

CustomFlix DVD Duplication, DVD Replication, On-Demand Video Publishing

CustomFlix DVD Duplication, DVD Replication, On-Demand Video Publishing

Netflix partner