Netflix queues up major delay in shipping DVDs*

*UPDATED 5:25 P.M.: Netflix spokesman Steve Swasey said this evening that the company had resumed shipping discs from an undisclosed number of distribution centers and hoped to have service "fully restored" by Friday.

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Netflix, the DVD rental service, is suffering from the biggest shipping problem in its history, delaying delivery of those familiar red-and-white envelopes to millions of its customers.

The Los Gatos, Calif.-based company today told its 8.5 million subscribers that it had been experiencing "severe technical issues" that had prevented it from mailing movies and TV shows. The problems began Monday night and halted all shipments Tuesday. On Wednesday, the company was able to send about half the discs subscribers had ordered from its 55 distribution centers across the country.

Today, Netflix had yet to make any shipments as of 10:30 a.m. PDT.

"It's comprehensive, and it's affecting our entire nationwide distribution systems," Netflix spokesman Steve Swasey said.

The problem, which he wouldn't identify, has prevented delivery to about one-third of the company's members, or about 2.8 million subscribers, who have sent discs back and are awaiting their next shipments, he said.

In a message on its home page, Netflix said, "We apologize, and we'll be automatically issuing credits to all of you whose shipments have been delayed. Our goal is to ship DVDs as soon as possible and to provide a personalized e-mail update to you if your DVD shipment was delayed."

Netflix, which ships about 2 million discs a day, has missed shipments only one other time since it launched in September 1999. That delay occurred in March. Netflix then issued a 5% credit in monthly fees to members whose discs were delayed by one day and a 10% credit for shipments that were delayed for two or more days.

This time, the company hasn't yet determined how it will make it up to its members. "There's no set formula because this is only the second time in our company's history that we've missed our shipping date," Swasey said.

So far, the delay hasn't cost Netflix much in the way of consumer satisfaction, said Michael Pachter, an analyst with Wedbush Morgan Securities. "Most people aren't sitting by their mailboxes on a Wednesday or Thursday waiting for their Netflix movies," he said. "People watch movies on Friday or Saturday. So as long as [Netflix gets] the movies out today or tomorrow, most people won't even notice."

Netflix currently has no estimate of when its technical difficulties will be resolved. "We have hundreds of engineers working round the clock to fix this problem," Swasey said. 

-- Alex Pham

Photo: Netflix

Comments

[Cube]

Why does anyone even waste their time with this company?? With the price of gas and your time just to mail back a DVD why not use your cable/Sat. Pay-Per-View??

Just put up your feet, relax and let "your fingers do the work" while this dinosaur of the past heads off into history where it belongs.

DVD's - thought up in the '80's, flogged on us in the '90s and we're still stuck with in the new Millenium. Just like fax machines

[cinesusie]

I watch my Netflix movies EVERY day, not just Fridays and Saturdays.

For subscribers like me, any delay is torture. It's like sitting in the car, twitching and scratching your face, trying to hold yourself together while your needle pal is in your connection's upstairs apartment, scoring the schmeez. Every minute you wait is another burning bamboo shoot rammed under your fingernaisl.

Those of us who are strung out will tolerate it, of course. NOBODY ELSE HAS A DVD LIBRARY AS BIG AS NETFLIX's! They've got stuff that Blockbuster and the rest of them never heard of. If you mention some titles to the clerks at these stores they look at you like you've got some sort of social disease.

So netflix holds all the cards. It can make customers like me beg. And to paraphrase Ms. Sterling's remarks from a noteworthy picture that you can get through netflix: "I don't beg. Groveling bags my nylons."

[Radical Raul]

What a bunch of incompetent morons. You would think they would know their system well enough and have back ups and safeguards in place to manage events like this.

LOL!!!

[Rose]

We love Netflix. With 5 people in our family, for $30 a month we can watch a pretty limitless variety of movies and tv shows, including online. Pay per view movies are just that Pay "PER" view and would cost us a fortune, with DTV.

One or two days of delay with the excellent service we've gotten in the past will not bother us. We've always been pleased at how well Netflix has responded to our concerns.

[joey c]

Netflix is better than pay per view or other electronic distribution methods primarily due to the very wide inventory that this company keeps. For film buffs, this is the ultimate. Try to get a classic foreign movie on pay per view and you see what I mean.

[Vanessa]

I am a very unhappy netflix customer today. I've been a member for 4 years, although the page gives my membership as starting in July 2007 but payment history back 4 years. This is the first time I've been upset by them. I can tolerate the delay despite the fact that I DO watch DVDs daily. I am, however, unable to tolerate rude customer service people. I called in an attempt to find out how long the delay would be considering EVERY slot in my queue is out now and I have no DVDs at home. The customer service agent was very brisk in her manner which I can understand but she should still be polite.

[Paul]

DVD delay? I didn't even notice. I have the 1 DVD at a time plan ($10 baby!) so I rarely turn around DVDs fast enough to feel inconvenienced by the wait. Also, while I'm waiting I usually enjoy an episode of The Office or some random movie (King of California was really good) using NetFlix instant watch on my PC or on my living room TV using my xbox 360.

Seriously, why do people pay $80 - $100 a month for cable or satellite? That's about $1000 a year! I'll stick with my $10 a month NetFlix and invest the rest in stocks or save up for a new car.

[Jon]

To Cube:
What Gas, I walk to my mailbox, get the DVD watch it and walk back out to mailbox and return it. unlike ppv you have better selection, you can set the time you want to watch it, and watch it multiple times. I go through about 20 or more DVD's a month through netflix for 18 dollars including tax. 20 from PPV would be 80, 20 from blockbuster or most local shops would be near 50 or more for 1 nite only rental.

[Ollie]

I've definitely noticed the delay. I watch my dvd rentals during the week, and hang out with friends on the weekend. It doesn't affect my opinion of the company, but if it becomes common I might have to switch.

[Anon]

Cube, don't be an idiot. You don't waste gas or time with Netflix -- the movies come to your house, and then you leave them for the mailman to pickup at your convevience.

I'm on the 2-at-a-time plan, and I'm able to go through 4 movies a week, all without using any additional gasoline. That's approximately $1 per movie, much cheaper than TimeWarner's paltry PPV/On Demand offerings...

[crzzie]

Netflix rocks! You can watch movies online - which I do a lot - in addition to getting them in the mail- and you don't have to drive to the post office, you can put them in your mailbox at your house for return. Kudos to Netflix!!

[yirmin snipe]

Isn't it funny that this happens right after Netflix starts "making good" on the throttling settlement. Yeah I feel good... they were supposed to give me my free month for ripping me off in the past and now they suddenly have a mysterious glitch when they were supposed to be shipping my movies... can anyone provide the name and address of the judge over the settlement because it looks like contempt of court to me.

[goat]

The only way anyone could be satisfied with just their pay-per-view service is if they have a very limited interest (or just mainstream taste) in movies. The PPV catalogs offered by cable and satellite is a joke compared with the library of Netflix. So who cares if the format is DVD instead of purely digital? I can get "Machine Girl" from Netflix, can you get it from your PPV?

[LoveNetflix]

I thought it was just me that wasn't getting any DVD's in the mail. Thankfully I have a life so this brief delay doesn't phase me. Sorry to hear about all the Momma's Basement Trolls that can't go one-two days without their media fix :(

FEEL BETTER!

[VT JT]

I must be one of the lucky ones. I dropped my netflix in the mailbox on Monday night, and received 3 new ones today (Thursday). Been with Netflix since it's inception and my only complaint is that you must have Window$ M$ in order to use their "watch instantly" feature. Other than that, never had an issue. Love my Netflix and even if i had a delay for a few days it is not something i could cry over and be upset about. So many other options in life, other than sitting at home watching TV.

[Zella]

Don't watch regular TV anymore, in fact I can hardly bare to see it when I'm out and happen to see a television, which are now everywhere. the TV news is BS and 95% of shows are well...horrible. Netflix at 30/month is currently the best deal for me right now. I don't have cable or satellite and don't watch anything except movies, documentaries and all kinds of other special interest DVD's that are offered by Netflix and not offered by pay-per-view anyway. One can also download many films from Netflix, I get unlimited movies with my subscription. I don't pay for any service except Netflix. I don't have to watch commercials or channels that I don't like. The only complaints I have are:1) they don't ship on the weekends,so the shipping time is affected, 2) sometimes DVD's are scratched or won't play,and 3) they could definitely use more titles in all genres in more distribution centers. I'm a buff and have seen almost everything. I'm reading more books and I get news from the papers and the net. I do watch some videos on google video and youtube also. I am more in control of what I watch and not being hypnotized by the usual advertisers and TV fare. I am much happier. Mainstream Cable/Satellite/TV is passe!

[LoveWeasel]

I WAS slightly miffed that Netflix has had my returns for several days, and it doesn't look good for having new movies this weekend, but there's no use crying over it. There's plenty to do in life if you're not glued to the TV.

AND I REALLY have to feel for all of the tech people at Netflix who have to fix this mess, not to mention the sweatshop /call center people who answer the customer service calls.

I ALSO find it ironic that this problem started RIGHT at the beginning of the throttling settlement implementation - it's entirely possible the problem was caused by the changes they made to make it happen...

[Noflix]

If you can't get your DVDs from Noflix, go to www.blockbuster.com and sign up for their free 2-week trial. Maybe the 100's of morons working the problem will figure out how to put a DVD in an envelope and drop it in the mail in 2 weeks. Then, if you like Noflix, you can cancel your Blockbuster free trial. But first call Noflix and demand 3 free months or an upgrade to the next level of service for a year else you'll cancel them and stay with Blockbuster.

[Bell D]

I watch netflix everyday as well. I don't have cable..its so expensive. I spend 30 bucks a month and watch as many movies as I want. I am a little pissed that I would only get a 5% or 10% credit for the time wasted. I don't care if this is only the second time that this has happened in its history. Its not like netflixes makes food, or something. They're sole purpose is to send out movies and thats it. Its just a little saddening. If this goes on for another week I am just going to cancel. I want an entire refund if this continues.

[Stranger]

@Cube

Why bother paying for Pay Per View when you can pirate it off the internet for free?

[Andrea]

GAH!! The wait KILLED me....I wish they would have warned us to expect delays before I was already antsy about not recieving my movies. I finally recieved all 4 movies from the top of my queue on Saturday, but then, my next shipment of 2 movies (which was due to arrive the following Wendesday) NEVER SHOWED UP! I just can't believe that after the fiasco of last week, 2 movies go missing in the mail?!?!?! I wondered how many other people experienced that this week?

I love Netflix, great selection, great price, totally use the watch instant features as well....how could I leave? But COME ON!! I'm feeling very strung along.

[ivan f. purcell]

THERE SRE A FEW THINGS LACKING AT NETFLIX:
A) TEAMWORK
B)DISCIPLINE)
C)QUALITY CONTROL
D)AUPERVISION)
E)LACK OF MORE DISTRIBUTION CENTERS NEAR BIG CITIES.
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