Netflix hopes to resume shipments today

Times Staff Writer

Netflix Inc.’s DVD queue just got longer -- much longer.

The DVD rental service is suffering through its biggest-ever shipping problem. Netflix on Thursday said “severe technical issues” had prevented it from shipping the awaited TV shows and movies to about 2.8 million subscribers, or one-third of its members.

Analysts say the Los Gatos, Calif.-based company has built up such a loyal following that few of its subscribers are likely to abandon it if the problem doesn’t linger for too long.

The troubles, which the company wouldn’t describe, 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, but halted all shipments again Thursday morning.


Netflix spokesman Steve Swasey said the company had resumed shipping discs from an undisclosed number of distribution centers by midafternoon Thursday and hoped to have service “fully restored” by today.

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.”

The snafu is only the second to cause major delivery problems since Netflix, which ships about 2 million discs a day, launched in 1999. But both have happened this year. In March, Netflix issued a 5% credit in monthly fees to members whose discs were delayed one day by an undisclosed problem and a 10% credit for shipments delayed two or more days.

This time, the company hasn’t yet determined how it will make it up to its members.

Netflix had no estimate of when its technical difficulties would be resolved. “We have hundreds of engineers working round the clock to fix this problem,” 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.”


Tell that to Howard Schwab, an attorney in Los Angeles. He pays $16.99 a month to rent three movies at a time and generally watches one a day. He received one disc Thursday but was awaiting two others.

“What happens tomorrow? I contemplate suicide,” Schwab joked. “You don’t understand the hunger of a real film fanatic.”