netflix_image.png



Company Overview


Netflix is the world's largest online movie rental service, with than more than 10 million subscribers. For only $8.99 a month, Netflix members can instantly watch unlimited movies and TV episodes streamed to their TVs and computers and can receive unlimited DVDs delivered quickly to their homes. There are never any due dates or late fees. Netflix members can exchange DVDs as often as they want using a postage-paid return envelope. Members can choose from a vast selection of DVD titles and a growing library of movies and TV episodes that can be watched instantly. Netflix is partnering with leaders in consumer electronics to bring to market a range of devices that can instantly stream movies and TV episodes from Netflix directly to members' TVs. These devices currently include Blu-ray disc players and new Internet TVs from LG Electronics; Blu-ray disc players from Samsung; the Roku digital video player; Microsoft's Xbox 360 game console; TiVo digital video recorders; and, soon, Internet TVs from Sony and VIZIO.



external image netflix-howitworks1.gif




No Such Thing As Unlimited Rentals

Customers who are “heavy renters” who pay $17.99 monthly to rent up to three DVDs at a time are finding that Netflix is in fact penalizing him for returning his movies so quickly. A customer interviewed says that although he is returning his movies at the same speed, he now only receives 13 movies a month compared to the 18 to 22 DVDs he used to receive, before Netflix’s automated system identified him as a heavy renter and began delaying his shipments to protect its profits. Not only does this formula now delay his shipments, but it also puts him in the back of the line for the most-wanted DVDs, so the service can send those popular flicks to new subscribers and infrequent renters. This 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. This automated system makes it so “unlimited rentals” is not a fully true statement, the company goes out of their way to make sure you don't go over whatever secret limit they have set up for your account.




external image netflix_review.png



The Terms of Use

Netflix didn't publicly acknowledge it differentiates among customers until revising its "terms of use" -- several months after a San Francisco subscriber filed a class-action lawsuit alleging that the company had deceptively promised one-day delivery of most DVDs."In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service," Netflix's revised policy now reads. The statement specifically warns that heavy renters are more likely to encounter shipping delays and less likely to immediately be sent their top choices.Because everyone pays a flat fee, Netflix makes more money from customers who watch only four or five DVDs a month. Customers who quickly return their movies to get more erode the company's profit margin, because each DVD sent out and returned costs 78 cents in postage alone. The company has no specified limit on rentals, but “unlimited” doesn't mean you should expect to get 10,000 a month. Netflix says most subscribers check out two to 11 DVDs a month.


external image usps.jpg

The Catch


So we all know that NetFlix can get you the latest movies mailed right to your door to watch in the comfort of you own home and pajamas, but there are a few little catches. In the first place, customers must rely completely on the United States Postal Service, which is reliable 90% of the time. However if you live in a remote area the Postal Service might not be the most efficient thing. Also, since the Postal Service is also considering stopping the delivery of mail over the weekends, viewers might not be able to get their precious movies on time, and be paying for a whole two days of the week that they will not get service. Another little thing most customers do not realize; the more often you request a NetFlix movie, the lower on the priority list you go. One might think that the better, more frequent customer you are you would get top priority, when the truth of the matter is that if you do not order videos very often, Netflix wants to make a good impression and actually give you the movies you want in the order that you requested them. Now back to that little issue of living in the middle of nowhere, or simply wanting the convenience of not wanting to check your mailbox every single day. What then?



external image netflix.png


Watch Instantly - Live Streams to Computer, Supported Devices, and Xbox 360

Netflix offers over 12,000 movies and TV shows through instant video streams available through select hardware and the computer. Netflix subscribers have choices to make on which players they are going to use. Although the subscribers with the plan of $4.99/two DVDs per month, one DVD at a time, don’t have unlimited streaming but are limited to just two hours. On the computer Netflix videos are streamed instantly through the Netflix website. Those subscribers who would like to watch directly on their TV have choices to make on which players they are going to use.
The first Netflix player other than the computer was the Roku. The first model is wireless, cheap ($99), and easy to use. Being dedicated Netflix hardware, setup is easy and the Roku box itself is sleek and minimal.
Netflix on Tivo is an only year old playback option launching in December 2008. Tivo is only the second piece of hardware able to handle HD streaming. To use Tivo on Netflix is just as easy and using the Tivo remote.
The Xbox360 began hosting Netflix video streaming. The advantages to the Xbox360 is that if you already are a Netflix member, using the Netflix option is free to all Xbox Live Gold subscribers. A disadvantage is the Xbox360’s potential to slow your connection and therefore not be able to view the so-called HD videos in actual HD.
Samsung and LG offer a dual Blu-ray player and Netflix interface device. Although more costly (about $350), if your big on quality it is the way to go because they offer the best live streaming capabilities and excellent HD.