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Netflix Shipping Centers Slammed By Problems

By JORDAN ROBERTSON

Published: August 15, 2008

SAN FRANCISCO (AP) - Netflix Inc. (NFLX) (NFLX) said Thursday that major technical problems over the past three days have severely limited the number of DVDs it could send out.

The unspecified problems affected all of the Los Gatos-based company's 55 shipping centers and marked the biggest disruption in service since Netflix launched its DVD-by-mail subscription business nine years ago.

Normal shipments from the online DVD rental leader were expected to resume on Friday, according to Netflix spokesman Steve Swasey.

The company was able to send out some discs on Wednesday, but shipped none on Tuesday and wasn't able to ship discs for much of the day Thursday, Swasey said.

Technicians were able to resolve some of the problems and get some of the distribution centers up and running again Thursday, but were expected to have to work through the night to get the entire system functioning properly, Swasey said.

He declined to comment on the cause of the outage.

"We're not real big on pointing fingers or attaching blame or airing this out in public," Swasey said.

About a third of the company's 8.4 million subscribers are currently waiting for DVDs held up by the problems. Affected customers were promised a credit to their accounts for the delay.

The glitches didn't affect Netflix's Web site or its service for streaming movies and television shows instantly to customers' computers.

Previously, Netflix's longest disruption had been in July 2007 when its Web site went down for 18 hours. The company suffered another outage in March of this year when the site was down for about 11 hours, resulting in a one-day delay in delivering DVDs.

Swasey said that was the first time Netflix was unable to deliver DVDs for an entire day.

"When we miss on that it's a big deal," Swasey said.

Shares in Netflix rose 68 cents, or 2.2 percent, to $31.84 Thursday.

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