reason from arstechnica
Pricing is also changing for their other plans (new pricing structure here). The company posted mixed results for the quarter: revenues grew by 80% and customer churn is still shrinking, but the company has spent a great deal of money on opening new distribution centers, placing them solidly in the red. It is hoped that the distribution centers will give Netflix a one-day turnaround for DVDs in most markets, something that upstart competitors such as Wal-Mart and Best Buy cannot compete with (yet). But if you know how the Netflix system works, you can see why this could be a problem. With one-day turnarounds, people can essentially rent more and more DVDs a month, which means more inventory is needed, and there's more shipping costs to pay. It's a classic catch-22. Fending off the upstarts results in better service, but if your business model secretly hopes for people who will pay $21.99/month to sit on only 4 or 5 DVDs a month, then giving people the surefire ability to get practically any DVD in a quick manner can cause problems.
As a Netflix subscriber myself, I found myself doing what Netflix must hate: sending back DVDs I've not watched yet, knowing that I can request them again in just a few days. The old me would have kept DVDs around, waiting for my mood to match its call. But with service so fast in my area, I'll just send it back unwatched. I think I've requested Fawlty Towers DVD One now 2 or 3 times, only to end up sending it back because I find something else I'd rather watch first. I wouldn't be surprised if Netflix doesn't impose some limitations on this practice before too long; I can't be the only person doing this. Of course, I don't tend to do this with "blockbusters," which means that I don't run into the problems that high-volume users report where Netflix purportedly makes more popular offerings less available to those who use the service aggressively. If true, this practice is only likely to increase.