The Third Pig

Netflix Flub Fixed

http://www.brickfinancial.com/thethirdpig/archive/2008/08/netflix_flub_fixed.html

Posted by Ben Taylor on August 16, 2008 08:30 AM

Credit: http://flickr.com/photos/beautyredefined/2389559961/

If you are a movie lover like me, even a casual one, then there is a good chance you are a subscriber to Netflix. Netflix (NFLX) has been providing online movie rental subscription services for the last decade or so. It allows subscribers access to a library of movie, television, and other filmed entertainment titles on DVD and delivers them to your home. Cool right? The company serves over 8.4 million subscribers – I am one of them.

Over the past three days, Netflix flubbed. For some reason the usually reliable company had a technology problem that disrupted the delivery of its DVDs. Netflix was able to ship some discs on Tuesday and Wednesday but none on Thursday.

In what seems to be the company’s personality it was proactive in acknowledging a problem existed and subsequently offered a 15% credit to affected customers. Although the company could have been more forthcoming with the cause of the technology glitch, it swiftness in correcting the problem earns them some points. However, the credits could be costly to the company, estimated at as much as $3.6 million in revenue lost per day of delay.

Netflix’s shares are up about 17% year-to-date. Interestingly, the news of the week barely moved the stock’s needle. In fact the shares are up about 1% week-over-week. This is probably good news for the company as its customers seem to be an understanding crew, and the market seems to think these glitches won’t hurt Netflix’s bottom line.

I was expecting my Netflix yesterday but have not received it yet. I will give the company a break though. They seem to be on top of it.

Disclosure: I did not, nor did the clients of Brick Financial own any shares of Netflix, Inc (NFLX) at the time of this writing. I however, am waiting for Strange Wilderness to arrive in the mail at any moment

Posted by Ben Taylor on August 16, 2008 08:30 AM

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