Shipping Snag Delays Netflix Customers' Rentals About 2.5 million Netflix customers won't get this week's movie delivery on time. The company says an internal technical issue has disrupted shipping across the country. It's the worst delivery problem the Internet rental pioneer has ever had.
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Shipping Snag Delays Netflix Customers' Rentals

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Shipping Snag Delays Netflix Customers' Rentals

Shipping Snag Delays Netflix Customers' Rentals

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RENEE MONTAGNE, host:

And if you're a Netflix customer, your mailbox has been a tad empty. The company's outgoing shipments of DVDs came to a near halt this week. Netflix worked feverishly to resolve the problem and says full service will be restored today. NPR's Wendy Kaufman explains.

WENDY KAUFMAN: Roughly 2.5 million Netflix customers won't be receiving their movies on time this week. Shipping stopped at all 55 nationwide distribution centers for at least part of the week because of what the company calls internal technical issues.

It's the most severe delivery problem the online rental pioneer has had in its nine-year history. Netflix posted a notice regarding the service disruption on its member Web site, and company spokesman Steve Swasey says Netflix will provide an automatic credit to customers whose movies were delayed.

Mr. STEVE SWASEY (Spokesman, Netflix): We're going to provide a discount to them or a refund on their monthly fee. We haven't determined exactly what that will be yet, but when we don't fulfill our obligation to send members' disks, then we feel we should make up for it in some way.

KAUFMAN: Netflix boasts about 8.5 million customers. About a third of them have been affected by this week's problems. The company said the disruption in the distribution centers has not affected it's watch-instantly Web-streaming service.

Thus far at least Wall Street doesn't seem worried, although one analyst said the service disruption could cost the company at least $3 million.

Late last month, Netflix posted a better-than-expected quarterly profit and raised its forecast for 2008. Wendy Kaufman, NPR News.

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