What’s at stake for Netflix
HackingNetflix.com linked to my story about Netflix intervening in the Plant Consolidation case before the PRC, and judging by the comments, there’s more than a little confusion about what’s at stake for Netflix and its subscribers.
In a nutshell, the potential problem is that subscribers who currently enjoy overnight service to and from their Netflix service center might find themselves with 2 day service. If you’re the kind of Netflix subscriber who typically watches the DVD the day you get it, and sends it back the next day, you’re going to have a longer wait between movies.
Example- I have overnight service to and from my Netflix plant. I get a movie on Monday, and send it back Tuesday. Netflix gets it Wednesday, and ships out another DVD, which I get Thursday, assuming I’m not being ‘throttled’.
Now lets say the PO changes it’s network setup so that the service standard between me and Netflix is two days. I watch my DVD Monday, send it back Tuesday. Now Netflix dioesn’t get it back until Thursday. They send my next disc that day, and I get it two days later, on Saturday.
Do the math- assuming Netflix and the PO are both on time, with overnight service I get a new disc every three delivery days (i.e. Monday through Saturday). Switch to two day service, and it’s one every five delivery days.
There are 302 delivery days in a normal year, subtracting Sundays and holidays. So a quick turnaround subscriber who gets about a hundred DVD’s a year with overnight service would see that drop to about 60 with 2 day service.
That’s what it means for subscribers- what it means for the company is that in areas where service standards lengthen, a larger portion of their DVD inventory is going to be in transit, and unavailable.
So the question comes down to whether or not a postal plant consolidation is actually going to change service to my Netflix center.
Here’s an example- one plant set to be consolidated is Springfield, Mass. The Netflix center serving Springfield is in Worcester. You can use the USPS Service Standard software (available from the Postal rate Commission web site) to verify that mail between Worcester and Springfield is supposed to be delivered overnight.
The proposal, however, is to shift Springfield’s mail to Hartford for sorting. Using the software, double click on Hartford, and you’ll find that the service standard from Hartford to Worcester is two days. That doesn’t necessarily mean that Springfield to Worcester would automatically go to two day service, but it would certainly make it a strong possibility. (On the other hand, Hartford to Worcester is only 57 miles, so the USPS could consider upgrading Hartford-Worcester to overnight rather than downgrading Springfield-Worcester to two days. The devil would be in the details.)
In parts of the country where the distances between plants is greater, the chance of service standards slipping would presumably be greater.
Example- I have overnight service to and from my Netflix plant. I get a movie on Monday, and send it back Tuesday. Netflix gets it Wednesday, and ships out another DVD, which I get Thursday, assuming I’m not being ‘throttled’.
Throttled is what they do after the first month with Net Flix so who cares that USPS sends the mail to Hartford. Now that Henderson works for them they’ll throttle everyone and blame USPS. Throttle means they hold your next DVD so that you can only get one a week instead of 3 if they allowed the system to work which is what they do the first month to suck you in.
It’s a little more complicated than that- and obviously, no business is going to consciously go out and try to aggravate its customers- not a good way to build the market base. (And how exactly would you ‘throttle everyone’? Wouldn’t that mean not sending out any movies at all? Why?)
“Who cares if they send the mail to Hartford?” Well, Netflix for one. What you seem to be missing is that having the DVD in transit for an extra day means that it’s one more day that you don’t have a DVD, but on the return trip it also means one more DVD that Netflix can’t send out that day. Throttling means not sending YOU the movie, but instead sending it to a low volume (and therefore low cost) subscriber.
Throttling is a completely separate issue. If you get fewer movies because your service standards change, it’s gonna feel the same as being throttled. But it doesn’t do Netflix any good- they don’t have the DVD either!
Hey, it is getting worse. Now Netflix is shipping movies from around the country. So, you can end up getting a movie a week later. Oh, I wish they had an option for users to select local only.