Netflix Subscribers Frustrated by Blu-ray Shortage, Light Users Move to Front of the Line
Some Neflix subscribers are finding that their pricey Blu-ray player has been sitting around with nothing to do. That's because Netflix doesn't have enough Blu-ray titles to go around, particularly when it comes to hot new releases. It's not uncommon for a movie to sit in a subscriber's queue for a month or more with an expected availability listed as "Long Wait." Bummer.
Cnet talked to Steve Swasey, a Netflix spokesperson, about the problem, who said part of it has to do with studios not providing enough Blu-ray copies of new releases that the company would like get. But it isn't always the fault of the studios.
"There is an expense to that," Swasey said. "These things cost money. We deploy money where we think it's going to be most efficient to keep subscribers and investors happy. It's always check and balances."
Not all subscribers can be happy hearing Swasey lay the blame on the cost, considering that Netflix started adding a $1 surcharge for Blu-ray renters back in October. Jessie Teitz, Neflix's VP of marketing, said the surcharge was to cover the "significant cost difference" between Blu-ray and standard DVDs, which brings up another tidbit that active subscribers can't be happy about. When there aren't enough copies to go around, users who rent less frequently jump to the front of the line.
"What we're doing is giving new releases to the person who hasn't rented as much," he said. "We've been doing this for a couple of years and fully disclose this in our terms of agreement. If we have a shortage of titles we do what we think is equitable and give the title to the person who hasn't rented as much or who hasn't gotten as much enjoyment from the service."
In short, the $1 surcharge that all Blu-ray renters pay is going towards not enough Blu-ray copies, which are then doled out to infrequent renters.
Hit the jump and tell us whether you agree or disagree with how Netflix is handling Blu-ray movies.

Image Credit: Josh Lowensohn via Cnet
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rruscio
December 16, 2008 at 8:09pm
Tiny numbers of units, minimal penetration, high cost, expensive media, crap content, PO'd consumers.
It's too bad really. Especially for people who bought in.
Sorry.
rr
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Antilogic81
December 16, 2008 at 10:07pm
DVD was just as expensive and content promised was never really delivered *you know how few alternate filming angle capable dvds are out there? I have one in my vast collection, the matrix* It had a cool reception too, and when I worked at blockbuster they had just started making the switch to dvd only...lets just say every other customer was acting like a dick to me about it.
I'm pretty sure any new format has to get past the same hurdles. If you ask me Bluray was introduced too soon. Lots of people still feel happy about their dvd players, and to be fair, bluray doesn't offer anything new to old movies that DVD hasn't already done so in terms of resolution - I don't think film companies want to spend the money to remaster something that meticulously even if it could be done. It's why I only purchase new movies...which also brings me to another point about bluray's failings. A lot of new movies suck, but you can't really blame bluray for that. It's sad that hollywood is killing the format they pushed so hard for.
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Vegan
December 16, 2008 at 4:48pm
I think it's a shame that infrequent rentals get treated better by the company. I know it makes sense that in their eyes, those are the better customers while the true Netflix fans are "worse" customers, but the frequent users are also the ones who are paying a lot more every month.
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DerfMcWoowoo
December 16, 2008 at 1:39pm
I understand why NetFlix would do this. It is a sound business model, however, the evolution of that business model has to take a different path. Though a high-use user provides a lower profit margin for the company, they still provide a base of capital so that the company can remain in existance. If too many high-use users bail, NetFlix will wash up.
I would anticipate NetFlix offering another paid-for service that puts users at the top of the list. I see this as a win-win solution since it provide users with the experience they want and the company with the additional dollars they want.
All that said, I still think it sucks that NetFlix caters to less frequent users. If you look in the dictionary for "Customer No-Service," this is one of the examples you will find.
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Pyrophorics
December 16, 2008 at 2:39pm
I can't see them adding a seperate feature so you can be bumpted to the top of the list.
What would be be called?
Best - You will get a new release movie when it is released so long as it is in the top of your queue.
Better - You will get a new release movie 1-3 weeks after it has been released as long as you keep it in the top of your queue.
Good - You will get a new release move 1-3 months after has been released as long as you keep it in the top of your queue.
Standard - You shouldn't count on getting this movie until after it has already aired on basic cable...
Yeah, I understand the business idea behind it but then again it's Netflix that has put themselves in this situation. You want business, you got business. What always happened to first come first serve?
It should be based on how long a user has had a movie in his or her top three calculated down to seconds. Anytime you change the order of your queue (where the movie drops below position 1, 2 or 3) the timer resets.
All this prompts me to do is cancel every single month just before I am charged and then resubscribe. Boom, look at me and my "new" status.
Then we come to the idea that they don't have enough Blu-Ray titles to go around. You are in the business of one thing, providing movies to customers.
What was that? Sorry, you can't fulfill the main service of your business? You need an extra $1 to help with the cost. Ok, here ya go.
Wait, where did my dollar go? You still don't have enough movies? *Cue scene of Netflix CEO rolling around in a pile of $1 bills*
Besides, Blu-Ray isn't even that popular. What, are the only ordering a handful of each new release???
I will tell ya what, as long as you have competition (other rental companies... e.g. Blockbuster) there will always be another place for me to go.
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kowal
December 16, 2008 at 12:52pm
Phenom 9500........Asus M3A.......6GB corsair ram.....geforce 9800gt....windows vista/XP dual boot
Another netflix trick is to send you disc from the other side of the country........which means a 3day wait for yor movies.
I am a disabled person who stays home.......so i am a "frequent user"\
I would gladly pay a few dollars extra a month......to avoid being throttled......but hey what can you do.
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ken_a
December 16, 2008 at 12:38pm
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mso-hansi-theme-font:minor-latin;}xveganx, I think you are half right.
While it is true that heavy user is probably less likely to move elsewhere,
even more important is the fact that, in a fixed-priced service like Netflix, infrequent
renters are far more profitable then a high-volume renter. It is crucial for
Netflix to hold on to the high-margin customers. Imagine how frustrated an
infrequent renter would be if they can't even get the small number of titles they
want!Myself, I have used Netflix for six years and I am a heavy-volume renter,
with perhaps 15 titles sent to me in a month on my 3-disk-at-a-time-plan. This
does mean that I am sometimes "throttled" and have to wait a week or
two for a hot new release, even if it is at the top of my queue. Honestly, I
don't really mind, as there is plenty of great content in my queue. The exact
order I get stuff is not terribly important. If I’m really dying to see something ASAP, I’ll
almost certainly have paid to see it in a theater. Though, I will admit that the $1
premium for relatively scarce Blu-Rays is a tad insulting.In all, Netflix’s breadth of offerings and generally high availability (waits
are only to be expected on a minuscule fraction of their library at any given
time) represents an incredible value to me and a no-brainer for $17 a month.
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I Jedi
December 16, 2008 at 12:12pm
Supply and demand. If you don't have enough supply to meet demand, then don't oversell yourself.
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xveganx
December 16, 2008 at 11:59am
this seems to be common practice among a lot of companies in different industires. I understand it, but I think its a shame. They figure the heavier users aren't going anywhere, so they make sure they give new subscribers the best service. You see the same thing with cell companies, new customers are treated like gold while existing and long time customers get the shaft.














