What's frightening for customers is Netflix is willing to go along with this thick-headed plan, PaidContent reports, as long as the company gets its DVDs for half off.

If the deal goes through it will no doubt hurt both parties. Trashing the value of its service, Netflix will lose subscribers, and the studios won't see the sales bump they're hoping for since a chunk of otherwise honest would-be renters will either opt for piracy or just sit out the 30 days to rent the movies.

Netflix customers, will you be more likely to buy a DVD or Blu-ray if you're not allowed to rent it until a month after it's released? Will you stick with Netflix even if it stops offering new releases in a timely manner?

Netflix Wants 50 Percent Discount Under Release Delay Scenario [PaidContent via TechCrunch]
(Photo: Great Beyond)

The new service, Blockbuster Express Digital, will be tested in a few markets. The initial offering will have about 1,000 movies, which is about 15,000 fewer than Netflix offers on its streaming service, which works with TVs, computers and PS3s, and other devices.

Blockbuster isn't the first company to try to to rent DRM-protected movies that play on proprietary devices. Apple's been doing it for years through iTunes. Of course, to rent movies on iTunes, you don't have to go hunt down a kiosk. You can download them to your computer, iPhone, iPod or Apple TV and watch them instantly. How's Apple doing with that? CEO Steve Jobs calls Apple TV his "hobby," and when the company released an upgraded version of the box last month, it didn't exactly take the world by storm.

So, yeah, good luck with that Blockbuster. It's nice to have a hobby.

NCR, MOD Systems begin digital kiosk download revolution in Entertainment with first technical trial in retail [Press Release]

The LA Times says:

The price cuts are welcome news for movie studios because it could spur demand in a year of flagging DVD sales. The wholesale price paid by Walmart and its competitors remains unchanged at about $18, meaning studios will make the same profit despite the discounting.

It's normal for retailers like Walmart to price DVDs below their wholesale cost at stores and online to draw customers who often spend more money on other items.

Although discounting is not unusual for Walmart and Target, the new $10 price means the retailers will incur a big loss on each sale.

It comes as the two companies and Amazon engage in a price war over books that has driven down the price of some hardcovers to $9.

Will these new unsustainably low prices get you to skip Redbox or Netflix and actually buy a DVD?

Walmart, Target slash online prices of popular DVDs [LA Times]

If you've got a Netflix subscription and a PS3, click on this link and Netflix will get a disc out to you for free. There's no need to prove you've got a PS3. Netflix trusts you.

Sometime next year you'll be able to download a PS3 program that does away with the need for the disc, so at that point you'll be able to try and sell it on eBay to stupid people.

Instant Streaming Disc [Netflix, via Joystiq]
(Photo: Netflix)

"We're going into this business in a big way," Mr. Homeister said. "Our goal is to have broad availability in the marketplace, across multiple devices."

The idea is to allow consumers to pay once for a DVD and then be able to play it "any device: television, Blu-ray disc player, personal computer, handheld media player or smartphone."

Are you into this?

Best Buy Prepares for the Post-DVD Era [Best Buy]
(Photo:chhipkali)

This should help the console's newfound momentum. Following a price cut to $300, it leaped almost to the top of the sales charts in September, surpassing the 360 and Wii, trailing only Nintendo's Highlander-esque DSi.

Although Netflix streaming is no longer the awe-inspiring technological marvel it once was, now that the Xbox 360 has been doing it for a year and Blu-ray players and certain TVs are capable of the feat, but the PS3 now gives you that much more bang for the buck.

Will this nudge anyone closer to picking up a PS3?

Netflix Coming Soon to PlayStation 3 [PlayStation Blog]
(Photo: photformatc1otaker)

On a 32-inch HDTV the visual difference between a Blu-ray disc and a DVD played on an upscaling DVD player is negligible, but if you long to take the Blu-ray plunge, now is certainly a better time than three years ago, when there were barely any movies out on the format and you couldn't find a player for cheaper than $500.

Netflix Coupon for New Netflix-Enabled Insignia Blu-ray Players Brings Price to $99 & $149 [Hacking Netflix]
(Thanks, Mike!)

Netflix.com/Wizardofoz [Official Site]

The LA Times says that 18% of the chains stores are unprofitable — and 47% are barely profitable. The company plans to get away from physical stores and concentrate on opening kiosks to compete with the surging popularity of Redbox.

In all, the Times says that as many of 1,560 of Blockbuster's 4,356 stores could close down or be converted into "outlets."

Can Blockbuster catch up with Netflix and Redbox by aggressively eliminating physical locations? Or was that the one edge they had left?

Blockbuster more than doubles planned store closures to nearly 1,000 [LA Times] (Thanks, Brett!)
(Photo:Cuttriss)

For example:

I tried to watch Netflix on my Xbox and it was not connecting correctly. I did not think to much of it and I found this in my inbox!!! YAAA For 3% credit without asking!!!!

and

I am seriously impressed with Netflix. I didn't even complain about this (nor was I planning to), the system detected the problem on its own. Now if only Comcast would do the same thing.

and

Awesome example of why Netflix is dominating the video market. The service was down for less than 5 minutes, but they still took the time to issue this email (and a credit, even though it's a small one). This just reinforces my decision to switch from Blockbuster On-Demand a few months ago.

It's a lesson other companies should learn. You can take keep current customers and maybe win some new ones simply by treating them fairly. It is possible.

(Photo:formatc1)

Hacking Netflix alerted us to the existence of Video Mailbox, a service that let you rent, by mail, as many videos as you wanted for the low, low price of $29.95 per month. If you lacked a VCR, you could rent one for only $10 per month. Video Mailbox made its debut in 1987.

Their hilarious commercial features Ralph, owner of a local video store, shuttering his business because of mail-order competition—again, 15 years too early. Who can compete with ten thousand titles? The service is memorialized on its own web site.

...Video Mailbox came up with several breakthrough ideas: Why not allow the customer to rent as many videos as they like for a flat monthly fee? Why not ship the movies to the customer via mail, using a special pre-paid mailer? Why not give the customer a huge selection — practically every major film that was available? Why not have the customer indicate their favorite movies in a "queue" so that when they return a movie, the next movie on their list would be automatically dispatched? Why not use a sophisticated software program to manage each customer's queue, to ensure that videos were dispatched quickly and efficiently?

Indeed! While Video Mailbox didn't survive, it's a great example of a brilliant idea existing before the technology to support it could.

Was Video Mailbox The First Movies-By-Mail Rental Company? [Hacking Netflix]
The Story of Video Mailbox [Fan Page]

First off was Dancer in the Dark. It seemed a little off to me that the next closest thing to what I was actually searching for was 'Aliens in the Attic'—I mean, if you're looking for something to make you sob and snuffle unattractively in front of your TV and require 'in the' in the title, perhaps 'Flowers in the Attic' would be a better choice? And surely there are closer hits to 'Dancer' than 'Aliens'—'Dances with Wolves', 'Dirty Dancing' or how about 'The Dancer'? I chalked it up to what amounted to a search engine burp and kept moving...

But when Leff kept searching, there it was again and again, a shadowy sign of search results gone awry. Aliens in the Attic. Aliens in the Attic. Aliens in the Attic. Screwy algorithms? Angry robots? Divine intervention? You be the judge. Full story here.

Tell Me Lies, Tell Me Sweet Little Lies [I'm a DIRTY robot!]

But let's break this down a bit differently. Netflix plans start at $9 for 1 DVD and increase with each additional DVD like this:

The 3 DVD plan is an outlier here, which can be explained by Netflix's competition with Blockbuster. In order to be competitive, Netflix aims to keep the 3 DVD plan (its signature plan) as low as possible in order to lure customers in. (Blockbuster charges $16 for 3.) Once customers are hooked on a Netflix plan-any lower plan-they're going to realize how slack they are to return movies and lazily decide to upgrade. That 4th CD is going to cost them, and so will the 5th, 6th, etc.

As far as we know, this doesn't have anything to do with Netflix's practice of penalizing heavy users with slower service. If you're a heavy Netflix user and are concerned about getting punished for it, check out GeekTonic's work-around.

(Thanks to Alex Lunney!)
[Photo: bebop17]

HackingNetflix says:

Each envelope is ripped open by hand, and the DVDs are inspected for cracks. If you look closely at the photo you can see the Blockbuster Online discs that were delivered to Netflix by mistake.

Hacking a Netflix Shipping Center [HackingNetflix]

Here's what's been happening to Victor:

We have been experiencing a growing number of brand new Blu-Ray releases from Netflix that arrive with a small crack (usually 1-3mm, and sometimes only through the hardcoat part) along the outer edge that makes the disc unplayable. In better than 4 years we have had only ONE regular Netflix DVD arrive cracked, but with Blu Ray we've now have three arrive in just the last three weeks with this problem. I started asking around, and it seems like this is a growing problem. The Blu Ray hard coating actually seems to make the discs MORE susceptible to damage in transit.

Mars Box noted this problem nearly two years ago, when 13 out of 24 Blu-ray titles he rented in September and October of 2007 arrived cracked. In the comments below the post, other Netflix customers are still posting (as recently as last month) that their Blu-ray rentals keep showing up cracked.

Netflix raised the rates on Blu-ray plans by $1 per membership tier this past March. At the time, they justified the price increase by saying, "Blu-ray discs are substantially more expensive than standard definition DVDs." We wonder if that price increase wasn't also a way for Netflix to avoid an expensive envelope redesign, and pass the cost of frequent disc replacement over to the consumers who rent Blu-ray in the first place.

RELATED
"Cracked Netflix Blu-Ray Disc Problem" [Mars Box]
"Netflix Raising Blu-Ray Rates By $1 Per Tier"
(Photo: Ross C.)

Robert writes,

Within the last 2 weeks I have noticed that Blockbuster seems to be throttling the queues. When you exchange an online envelope for an in-store rental, it shows up in your queue within a few hours. When you return that movie to the store, it won't clear your queue for at least 2 days.

I returned a movie on Monday evening well before the store closed, and it has yet to clear my queue (today being Thursday). On my rental history it shows rentals being returned to the store 2 days later than normal. And there isn't really anything I can do. The store has checked it in, and when I go to report a problem on their website, it says since it's an in-store rental, I have to contact the store.

What's surprising about this is the 2 day delay is for a movie Robert rented from the store's physical inventory, then returned to the store. Imagine if you'd rented a movie from Blockbuster and turned it in, and the store refused to acknowledge it on your account for at least 48 hours—and wouldn't release that rental slot so you can get another movie in the meantime. That's what Robert's experiencing.

He pointed us to Blockbuster Underground, a blog that describes catching Blockbuster at some of the same tricks. That blog notes,

Even if you personally return a store DVD to a Blockbuster store and call the manager of the Blockbuster store to confirm the DVD has been scanned into the system, the DVD can still sit in your queue and occupy a shipping slot indefinitely. Every day a returned DVD incorrectly remains in the At Home section of your queue is a day you are not able to fully benefit from your subscription. Please note that Blockbuster will continue to charge you the full subscription fee even if unnecessary shipping delays of this nature are Blockbuster's fault.

The best thing is to call Blockbuster at the first sign of any shipping delay. You can reach Blockbuster toll-free at (866) 692-2789. Blockbuster may ask you to wait twenty-four hours before reporting a delay, but this is a ridiculous request. Blockbuster's system should be able to update at least hourly. If their system updates less than that, they need to fix it.

Your other alternative: see if there's a Redbox, and make the switch to Netflix.

Blockbuster Underground
(Photo: sunshinecity)

Some tech-savvy people found workarounds to trick Netflix into streaming movies to their Roku players or other devices, but Netflix caught on and put a stop to that. iPhone application developer Héctor Ramos has taken up the cause, and is encouraging residents of Puerto Rico to cancel their Netflix memberships:

We have called out Netflix, seeking answers, and all they've said is that Instant Streaming is not supported outside of the 50 states. They haven't addressed the issue of why they are charging us the same price for half the service. Nor have they justified their reasons. Even Hulu, which once blocked Puerto Rico, changed their policy once they realized Puerto Rico IS PART OF THE UNITED STATES.

So, Netflix, while I understand the restrictions of your contracts with movie studios, which is it? Is Puerto Rico part of America, or not? If you're not going to provide them with a major feature of your service, why charge full price?

Netflix Excludes Puerto Rico, Charges Full Price [Héctor Ramos]

(Photo: dirigibleduck)

This isn't a new development by any means — Netflix has had the policy since early this decade and the Oakland Tribune did a story on the phenomenon back in 2007 — but the revelation is more resounding in today's economic climate, with its increasingly harried workforce. Those lucky enough to have a job today are afraid bosses will be all too happy to grant permanent vacations if they ask for excessive time off.

Netflix's time off rules - or lack thereof - are part of a broad culture of employee autonomy instilled in the company when Hastings founded it a decade ago. The executives trust staffers to make their own decisions on everything - from whether to bring their dog to the office to how much of their salary they want in cash and how much in stock options. Workers are treated, as Chief Talent Officer Patty McCord likes to say, as adults.

One problem with the seemingly dream setup: Employees sometimes return all scratched up and unplayable.

Vacation policy at Netflix: Take as much as you want [BNet]
(Photo:Marike 79)

"Behind the scenes at Netflix" [Boston.com via Cinematical]

Hint to preserve your sanity: to avoid PC Mag's trashed layout, try viewing/bookmarking the print-friendly version.

"How to Delete Accounts from Any Website" [PC Mag] (Thanks to Josh!)
(Photo: jm3)

"Blockbuster Said to Hire Firm for Advice on Possible Bankruptcy" [Bloomberg]
"Blockbuster Shrs Plunge; Reportedly Mulls Bankruptcy" [Barron's]
Blockbuster on Google Finance [Google Finance via CoryOBrien]

Two readers have caught the changes and alerted us to them. Ryan writes,

Blockbuster has a new policy that decreases the amount you can rent at any time, and disguises it as a benefit of "no due dates". Previously they would exchange movies in store, and continue to ship your online queue as usual.

Another reader, Jon, is particularly annoyed because he was an early customer:

Blockbuster total access was a dream for me, 19.99 a month unlimited rentals and unlimited movies by the mail (I was grandfathered into that deal). But now they changed the plan for the worse and [are] trying to make it look like a great deal.

Their new headline reads, "No More due dates for total access in store returns," but the fine print is they don't send you your next mailings until you return the movies to the store. You used to get both in store and mail movies at the same time.

Here's the new fine print from Blockbuster:

You'll receive one free in-store movie rental for each online rental sealed in its return mailer, up to your plan's limits. The maximum number of free in-store movie exchanges is based on the plan to which you subscribe. At participating stores, your free in-store exchanges will not have due dates. You can keep them as long as you want without incurring additional fees, as long as you remain a BLOCKBUSTER Total Access subscriber. However, in all cases, any free in-store movie exchanges will count towards how many online rentals you may have out under your plan. Your next online movie will ship after the in-store movie exchange has been returned to the store you rented it from.

Here's the logic from the Blockbuster release.

"We already rent more video games than any other company, store-based or online, in the nation, so we know our core customer loves games as well as movies," said Bob Barr, Vice President and General Manager of blockbuster.com. "With this pilot program, we're laying the groundwork for offering BLOCKBUSTER Total Access customers easy online access to the movies and games they want, through an integrated subscription offering. Plus, according to their plan, they'll continue to be able to exchange their by-mail rentals both for free in-store movies as well as half-price in-store game rentals. A combination video game and movie online offering — with in-store exchange privileges — is a tremendous value and convenience offering not available through anyone other than Blockbuster."

HackingNetflix also notes that Netflix has not even considered video games, even advertising the similarly-organized Gamefly on their envelopes.

What do you think, Consumerists? Is this skillful move trying to outflank Netflix and overpower Gamefly, or just another misstep of a living fossil? Leave your thoughts below.

Blockbuster Testing Game Rentals With Total Access Subscription
[Hacking Netflix]
(Photo:northernplateguy)

Our eerily pale brothers at Kotaku have noted that GameFly sends way too much email, but our tip line has more problems with the service:

I've had Netflix for almost a year and love the concept so I figured GameFly should be ok. Nothing could be further from the truth. In the two months I have been a member it has taken an average of ten days from the time I put a game in the mailbox for a new one to show up.

This entire setup sounds like a gigantic scam on the part of GameFly. I have serious doubts that they ever shipped those games that never arrived, and now they are going to try and bill my credit card for a game that I returned when history has proven that clearly not enough time has passed for them to receive and/or process the game into their system.

5 days of mailbox-watching passed, and nothing had arrived. Another 5 passed, and still nothing, so I contacted their customer service dept. just to get an update on my games' shipping status. Their reply was basically "they got lost - here's a refund. You'll need to buy them again." When I checked their store again, these games were nowhere to be found. So I got my refund, that's fine. But I was puzzled: how could two separate purchases both get lost in the mail? And then coincidentally happen to not be in stock when I go to re-purchase them?

I've started cc'ing the consumerist.com on our correspondence, because you are starting to get weird on me.

I noticed a few months ago that when I returned a game, it would not be reported as received for several weeks. WEEKS!!!! I reported each problem and they responded more or less promptly by shipping out the next game. So I though, okay, they're addressing it, and they should solve this problem soon. What bugged me about the problem report is that they suggested I contact my local USPS myself about the problem.

And so on. We get occasional emails complaining about Netflix, but the consensus around here is that its members love it. What's up with GameFly—are only the disgruntled emailing us, or are they truly a bad service? Let us know in the comments.

Here's what they did instead:

• "Using an existing rooftop antenna, James plugged her TV into the hook-up to get more than 50 high-definition TV channels over-the-air. The cost for these HD channels: zero."

• Instead of HBO — Netflix for $17 a month allows you to rent 3 movies at a time over the mail and watch lots of movies on demand — including ones from Starz.
• Hulu, Fancast, Joost, YouTube, and most major TV networks' Web sites offer TV shows and other video content for free.
• They spent $600 on a computer that will serve as TV tuner, has a High Definition Multimedia Interface cable for carrying high-definition video, and an embedded Blu-Ray/DVD player, and can be used as a DVR. The cost of the new computer was paid off in about six months.

• They upgraded their DSL to 3 Mbps downloads and 512 Kbps uploads for an extra 5$ per month.
  
  
  According to CNET this ended up saving them $93 a month and they say they prefer this set-up to Dish Network. Something to think about.

  You don't need satellite TV when times get tough [CNET] (Thanks, Klay!)

Dear Dash,

As you may know, Blu-ray movies are more expensive than standard definition movies. As a result, we're going to start charging $1 a month (plus applicable taxes), in addition to your monthly membership charge, for unlimited access to Blu-ray movies.

The additional charge for unlimited Blu-ray access will be automatically added to your next billing statement on or after November 5th, 2008 and will be referenced in your Membership Terms and Details. If you wish to continue getting Blu-ray movies for $1 a month more, you don't need to do anything. If not, you can remove Blu-ray access anytime by visiting Your Account at the Netflix website.

If you have questions about this change or need any assistance, please call us anytime at 1-888-638-3549.

-The Netflix Team

Price change for access to Blu-ray movies [The Official Netflix Blog] (Thanks to Dash!) (Photo: corsec67)

We'd love to see Netflix roll out a reminder service, but since that would directly impact their bottom line, we have a feeling it won't be showing up on the official site any time soon.

Here's what the typical data screen looks like, if you're curious:

Holy crap, I kept Michael Clayton for 58 days, and I only watched it once! Maybe I should just cancel Netflix and read more books.

FeedFlix.com

I just got "The Rules Of Attraction" from Netflix and it's a screener disc. As a matter of fact, 3 or 4 times through the movie, 5-10 minute sections of the movie have "This is the property of Lion's Gate Films, This disc is not to be sold or rented". Interestingly, it was a 2 sided DVD and when I watched the 2nd side, it was a test pattern. No extras, no subtitles, no language options. Just the movie with legal disclaimers overlaid throughout.

While that's certainly not an appropriate disc to be mailing out, we have no way of knowing how it entered the Netflix supply chain—it's possible that a previous customer switched out the discs at some point, or that a supplier accidentally included it. We think you should contact Netflix and report the issue so they can remove the disc from circulation and send you a proper copy of the movie.

You can find Netflix's phone number under the "Help" section—in the lower right corner of the page, under "Contact Customer Service," click on "Website Questions and Inquiries." You'll be given a customer ID number along with the phone number to call.

(Photo: Getty)

"IMPORTANT: Your DVD Shipments Have Likely Been Delayed

We're sorry to report that since Tuesday we've been experiencing issues with our shipping system, so many of you have not received DVDs in a timely manner and many of you have not received emails letting you know we got a DVD back from you.
We pride ourselves in delighting you, and we've let you down. We apologize and are working around the clock to restore normal operations. To all of you whose shipments have been delayed, we'll be automatically applying a credit to your next billing statement. Or, if you are new to Netflix and your first shipments have been delayed, we recognize that this is not a good way to begin your Netflix membership and we'll automatically extend your free trial.
Our goal is to ship DVDs as soon as possible and to keep you updated. Again, we are sorry for the inconvenience we've caused you and thank you for your patience.
The Netflix Team"

I actually didn't even notice that my Netflix had been delayed until checking the website, but I appreciate that they are straightforward about the issue. -Kristin

Unlike the J. Crew "We've made some mistakes..." notice, Netflix here acknowledges the cause of the problem, that the company is working to fix it, and offers customers compensation. -Brent

I'm HAPPY about how well the service provider is handling the outage, mostly because other service providers handle things like this SO poorly. -Steve

While my personal experience hasn't been affected by this shipping delay, I am still pleased by their efforts to publicly own up to an error. Not to mention their effort to smooth things over for anyone bothered by the hiccup. I have always been pleased with Netflix and their customer service, and this is just another instance that tells me I've chosen to give my business to a great company. -Annie

1- they admit they messed up (I hadn't even noticed)
2- they said they were sorry
3- they will be crediting me for the error

I'm left happy, even if I need to wait an extra day or two for the new Harold and Kumar movie. -B.

If something did happen, I haven't noticed. Thank you once again Netflix for rising above my expectations. You quickly own up to a problem and provide the appropriate compensation without making me get into a verbal fist fight with a CSR. -Eric

Way to go, Netflix. Now fix your site!

(Photo: corsec67 )

In order to use the new service, users will need to be an Xbox Gold-level member which costs $50 a year. Naturally, they will also need a Netflix membership, but it has to be above the base $4.99 membership level.

The article says,

Confirming another pervasive rumor, the software upgrade will let users create avatars (which look a heck of a lot like Miis on the Nintendo Wii) and invite their friends to a “Live Party.” The Netflix partnership means that users can also invite their friends to watch movies with them too — something that has a few attendees here pretty excited.

“I like the idea of being able to be in a game, talking with friends and someone will say something like ‘I’ve never seen Office Space.’ And thinking that I could go, stop the game and make that person watch ‘Office Space’ with me,” says Edie Sellers, contributor to podcast site GameHounds.

Netflix has been like a pure virginal daughter to us at The Consumerist. We feel as if Microsoft, the biggest slimeball in town, is whisking away our daughter for a wild trip to Vegas where we know she will ultimately be deflowered. Their union fills us with worry and a sense of dread which emanates from the pit of our stomach. Don't you hurt our daughter, Microsoft, or we'll f'ng kill you.

Microsoft partners with Netflix on Xbox Live [MSNBC]
(Photo: Getty)

For users of Profiles, I have good news to report: we will keep the feature with no plans to discontinue it.

We were persuaded by the well-reasoned, sincere responses of loyal members who very much value this feature. As someone who enjoys helping his four-year-old daughter manage her one-DVD-at-a-time, G-rated sub-account, I identified with these thoughtful pleas to maintain Profiles.

Because of an ongoing desire to make our website easier to use, we believed taking a feature away that is only used by a very small minority would help us improve the site for everyone. Listening to our members, we realized that users of this feature often describe it as an essential part of their Netflix experience. Simplicity is only one virtue and it can certainly be outweighed by utility.

As for improving Profiles, there are no definite plans in place yet, but, like everything at Netflix, we seek to make it better and we are open to suggestions. Non-users of the feature and new members will be able to access Profiles in 2-3 weeks. Existing users will be able to continue their use, uninterrupted.

We apologize for any inconvenience the previous announcement caused.

Enjoy.

-Todd

Emails from Consumerist readers sharing the good news hit our mailbox moments after the news was released. Here's how some of our readers are reacting:

Rick: "Sounds like Netflix got the message. Personally, I never used profiles, but it's nice to see that they are willing to say, OK, we made you mad, so we're going to make things right. I like the tone of this message — not too sappy, silly, or over-apologetic. Most companies insult your intelligence one way or another with their apologies."

Sonya: "Yay!"

Keith: "Netflix does take us seriously :)"

Di: "I wonder how many people have already sold thier soul to Blockbuster over this. Oh well."

Steven: "We win I guess!"

Profiles feature NOT going away [Netflix Community Blog] (Thanks to everyone who sent this in!)
PREVIOUSLY: Netflix Eliminates User Profiles, Infuriates Customers
(Photo: Maulleigh)

• An Xbox 360
• Windows Vista with Vista Media Center (it's included by default in Vista Home Premium and Ultimate)
• A Netflix subscription
• The freeware vmcNetflix plug-in

Incredible shrinking service. Every single person I know uses Netflix uses profiles. For those out there who don't, you can create profiles for different people using the same account, and allow those people to maintain their own list of movies. For example, I get two discs at a time from my queue, my wife gets one at a time from hers, but we pay for just one 3-disc at a time account.

I called Netflix to tell them that if they do this, I will cancel service with them - I made it clear to the poor guy that answered the phone I wasn't going to yell at him, I just wanted to lodge my protest. It seems he's taken LOTS of such calls. He told me to log into my account, click on the Contact Us link, and go to Suggestions and put the information in there. Apparently that page sends information to the correct people. I certainly hope every Consumerist reader who is a Netflix user does just that. Netflix has been one of the better companies I've dealt with, and I believe that if their userbase tells them "no, you are being dumb, stop it", they just might. This also might be the point where they have realized they have Blockbuster just about beat and are starting to abuse their customers. I hope not, because I'd rather they not let Blockbuster up off the mat.

Here's the email Neflix sent out, announcing the discontinuation of profiles:

Important News Regarding Netflix Profiles

Dear ,

We wanted to let you know we will be eliminating Profiles, the feature that allowed you to set up separate DVD Queues under one account, effective September 1, 2008.

Each additional Profile Queue will be unavailable after September 1, 2008. Before then, we recommend you consolidate any of your Profile Queues to your main account Queue or print them out.

While it may be disappointing to see Profiles go away, this change will help us continue to improve the Netflix website for all our customers.

If you have any questions, please go to http://www.netflix.com/Help?p_faqid=3962 or call us anytime at 1 (888) 638-3549. We apologize for any inconvenience.

- The Netflix Team

The ability to have "his and hers", or a kids queue, is pretty essential to the Netflix service for some people. However, according to Netflix's FAQ, they will be emailing people a copy of their queues so they can rebuild their selections. Will this drive you back to the arms of Blockbuster?

The Associated Press says:

The design, which [CEO] Keyes said is likely to change with testing, offers a range of features to help customers make movie choices, including previews and recommendations. Keyes said the company is working to reduce the download time for movies to about 30 seconds.

At first the system will only be compatible with the an Archos portable device, but will eventually be an "open system," able to recognize a wide variety of devices. Blockbuster says that even if they don't manage to acquire Circuit City, "transforming" their stores with these movie ATMs is their goal.

"With or without Circuit City's acquisition, we think we have a terrific opportunity to transform our stores," Keyes said. Blockbusters' presentation also included mock-ups of small movie download kiosks for other locations such as airports.

Will a digital download kiosk save Blockbuster? Or are you perfectly content with Netflix and their new box?

Blockbuster unveils in-store kiosk prototype [AP]
Blockbuster Annual Meeting Presentation [Blockbuster]

It all started in the '80s, when corporations birthed the phone tree out of a desire to cut costs and, understandably, gain some distance from their outlandishly outfitted customers. They took the need for space too far, even as America cleaned up its act, forgetting that bad customer service is a bad business decision.

“I’ve listened to thousands of people interacting with machines,” Mr. Rolandi said. “You hear sighs of resignation. You hear people swear. If businesses knew what I knew, they would not design them this way. Many people do not take into account the emotional state of the customer. When you call someone for customer service, you’ve got a problem and you’re probably in a bad mood. You hear someone telling you your call is so important that we won’t let you talk to a human. Then they slap people with too many options, and eventually, you’re in a fight with the system. When you do get a customer representative, you’re loaded for bear.”

The popular conception of outsourced call centers ruining our lives isn't quite right. Fewer than 10% of call centers are based offshore. As Americans, we can all be proud of the more than 100,000 call centers we host, excluding telemarketers.

The Times thinks the tide is slowly turning in our favor.

For the first time, American corporations are acknowledging “customer service as something worth paying for rather than just red ink,” said [Jon Anton, director of benchmark research at the Center for Customer Driven Quality at Purdue,] who looks at call centers worldwide and, using a number of criteria, compares how well they work. “If you can satisfy customers and keep them buying, it’s as important as marketing.”

He said that in the last year or so some large companies have been creating a chief customer executive, whose success is measured not on profit, but on customer retention.

Another reason for this change is that the very technology that is driving us crazy is helping people fight back.

Consumers are posting their experiences with customer service online and warning people away from businesses that do not offer a good follow-up with customers. Secondly, there are Web sites that tell customers how to get around an automated system.

The Times cites Netflix as one example of an enlightened company switching its emphasis from automated support to well-trained, empowered call centers. We've lauded Netflix before, but don't know of many other companies that are cutting down phone trees in favor of quality support.

What do you think? Are companies slowly improving their service, or are consumers just getting better at biting back?

Far From Always Being Right, the Customer Is on Hold [NYT]
(Photo: Getty)