There are some profit salvaging, number crunching procedures going on at Netflix these days. Manuel Villanueva signed up for Netflix Inc.'s online DVD rental service 2 1/2 years ago and now he has discovered the movies don't come as quickly as they used to. In the beginning, with the $17.99 flat fee and 3 movies out at a time program, he could manage to rent and return up to 22 movies in a month. Now, the (presumably) bleary eyed man can "only" watch 13 a month!.
According to this article at MSNBC, the company's automated system identified him as a heavy renter and began delaying his shipments to protect its profits.
The Netflix formula also causes Villanueva to be placed on a lower priority, towards the back of the line, for the most-wanted DVDs. The idea is that the newer films will go to less infrequent renters. This practice is known as "throttling" and means Netflix customers are often treated differently, based upon their rental patterns.
Although at first this practice was
not well known, Netflix publicly acknowledged that it does indeed
differentiate among customers in January 2005 when the modified their "terms of use" agreement. This was however, some four months after the filing of a class-action lawsuit alleging that the company had deceptively promised one-day delivery of most DVDs.
Source: MSNBC
