Hell hath no fury like a movie junkie scorned.
That's what Netflix discovered when its most devoted "heavy users" found that the movie rental service had an undisclosed policy during shortages of shipping films faster to those customers who rent the least.
In a class-action lawsuit filed against the nation's largest online DVD rental company in September 2004, the company was accused of false advertising for its claims of "unlimited rentals" and "one-day deliveries."
When it agreed to a settlement due to be finalized this month, Netflix denied any wrongdoing but conceded that it had a policy that sometimes allocated movies more quickly to those who rented less frequently.
That policy -- called "throttling" by some critics -- has unleashed a backlash as a vocal group of disgruntled users have attacked the terms of the settlement agreement, which would give Netflix customers the choice of one month of free rentals or an upgrade in their service plan. Critics say that instead of punishing Netflix, the agreement helps the company promote its service.
Just last month, the Federal Trade Commission joined several consumer groups in filing amicus briefs in the suit, decrying the settlement as potentially costly to customers.
Steve Swasey, a spokesman for the Los Gatos, Calif.-based company, denied critics' claims that the practice is meant to save Netflix shipping costs by coddling customers who don't fully make use of their subscriptions. The most popular plan is $17.99 a month to rent three movies at a time, with no late fees.
Swasey said, "100%-guaranteed customer exhilaration is very difficult for any high-volume consumer company.
"Netflix made the decision that if we had a shortage of DVDs that we would give them to lighter users. We are giving it to folks who have less alternatives for viewing."
Netflix began acknowledging the policy in an online posting of its terms of use after the suit was filed. But even before the company's explication of its shipping system, film nerds everywhere had scrambled to figure out why they weren't getting prompt delivery of their movies.
For Mike Muegel, "Sweet Home Alabama" was the movie that made him start to feel the hurt.
Muegel, a freelance software engineer in Dallas, loves watching movies through Netflix. Such was his passion that for a while he watched about 20 movies a month. But in early 2003, he requested the Reese Witherspoon romantic comedy and was told he would have a "very long wait."
