Recently (in response to a subscriber class-action suit filed against NetFlix, Inc.), NetFlix quietly revised their terms of service (and ironically, their TOS do not include the requirement to notify subscribers when they make such changes — see the highlighted text below)

NetFlix now makes explicit that they may choose to throttle heavy movie renters. Specifically, they may delay by a day sending out a movie, and will allocate popular films to video renters who receive the fewest DVDs. The main problem NetFlix and other online DVD rental services have is that postage is somewhere in the range of $0.35 to $0.37. So that’s $0.75 for every round-trip cycle a DVD makes, users who only rent 2 movies a week earn NetFlix much more money on the 3-out-at-a-time plan of $17.99 then someone who is renting 4-6 per week.

In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service. As a result, those subscribers who receive the most movies may experience that (i) the shipment of their next available DVD occurs at least one business day following return of their previously viewed movie, (ii) delivery takes longer, as the shipments may not be processed from their local distribution center and (iii) they receive movies lower in their queue more often than our other subscribers. Other factors that may affect delivery times, include, but are not limited to, (i) the distance between the distribution center from which your DVD was shipped and your delivery address, (ii) the timing of your placement or adjustment of movies in your queue and (iii) circumstances impacting delivery by the U.S. Postal Service.

We do not process returns or deliveries on Saturdays, Sundays or Holidays. We make no guaranty as to the shipping and delivery of DVDs and may, in our sole and absolute discretion, change our business practice regarding allocation, delivery and shipping, without notice. We may from time to time revise these Terms of Use but we will not necessarily provide you notice of the revisions. It is up to you to review the Terms of Use frequently to determine if there have been changes.

BlockBuster has similar language in their TOS, but so far I haven’t come across too many complaints about BB slowing down heavy renters. I always got the movies I wanted from BlockBuster Online quickly and some months received 18-22 DVDs with most of my top preferences shipping first. Moreover, Blockbuster published a Press Release (BlockBuster Online Doesn’t Throttle Customers)

Throttling, a practice that limits the number of movies shipped to heavy online DVD renters, has recently drawn media attention.

“BLOCKBUSTER Online does not throttle. When we say our service offers unlimited rentals, we mean it,” said Shane Evangelist, senior vice president and general manager for BLOCKBUSTER Online. “We don’t prioritize our customers’ movie fulfillment based on how often they use our service, and we don’t limit the number of movies a subscriber receives each month. We want our customers to get the full entertainment value that comes from a subscription plan, whether that’s watching 20-plus movies

Intelliflix’s online DVD rental service gets very strong reviews as well and will also mail you video games and adult (mature) titles.

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