To: pr at netflix / com
Subject: Questions from the author of "An Analysis of Netflix's DVD Allocation System"
Date: Thursday, May 01, 2003 8:32 AM

Greetings. I'm the author of the report that analyzed your company's
method for determining who gets low availability movies. I'd like to
update my report at with your
responses to a few questions.

1) CSRs have responded to several individuals that:

   When demand temporarily is greater than supply we ship to
   customers who rent fewer movies because they have fewer
   opportunities to get a particular movie. We do this to give
   the best experience to as many  members as possible.

Is there anything you would like to add to this?

2) Could you explain why, in the past, customer service representatives
stated that availability did not vary from customer to customer. For
example, previous a CSR had stated:

   The quality of service a subscriber receives is not
   determined by the size of program, or length of membership.
   All subscribers are treated equally, including those on
   free trials.

This is false because:

   + Length of membership drives the availability algorithm: new
     users have not previously rented and have much easier access
     to low availability titles.

   + Size of program seems to affect availability, since a 5
     disc user can rent more than a 3 disc user and still be
     have similar opportunity to get a low availability movie.

3) Is only the previous month's rental history used to determine a
customer's ranking to get low availability movies or is anything else
involved? In my report I surmise the rental plan is also taken into
consideration and the average cost/disc last month or month(s) is used.
Is this correct? Is it limited to the previous month or is it an average
of some number of previous months?

4) Have you or are you planning on updating the user signup process and
online help documentation to clearly describe your method of allocating
movies when demand outpaces supply?

5) Do you have any comment on this suggested improvement:

Better would be to only phase in availability differences after a
customer has reached certain rental thresholds based on their plan
during the month. For example, at the start of a billing period a
customer looks pretty much like a new customer. But as the month goes on
and they reach threshold 1, knock down their priority. When they reach
threshold 2, knock them down another notch. Etc. A simple meter at the
top of their queue could show their current priority status. Because
billing period start dates should be spread uniformly across the month
(it is based on when you joined Netflix), at any date in the month only
a fraction of all customers will have the best priority. And those
customers who don't use their service much will never get knocked down a
notch or perhaps only one notch.

Thank you very much in advance.