Friday, August 15, 2008

Netflix Inc., the largest U.S. mail-order movie service, said “severe technical issues” have caused shipping delays for the past three days.

Shipments to about a third of Netflix’s 8.4 million customers have been delayed, company spokesman Steve Swasey said in an interview Thursday. It’s the second time in the company’s more-than-10-year history that it has been unable to send movies through the mail, he said.

Members who are affected will receive a credit to their accounts. Mr. Swasey declined to specify the amount, saying it would be “premature” until the company discovers the length of the delays. Netflix gave some customers a 5 percent credit on their monthly statement in March after its Web site went down for 11 hours, hindering shipments.

“We’ve never had shipping delays of this magnitude before,” Mr. Swasey said. “Into the third day is unheard of for us, so we’re working as fast as we can to resolve it.”

The Netflix outages follow similar delays at J.Crew Group Inc. last month, which led Chief Executive Officer Millard Drexler to tell customers: “We let you down.”



J.Crew’s problems occurred while the company was upgrading its Web site and call center.

Los Gatos, Calif.-based Netflix wasn’t able to ship Thursday. Netflix didn’t send out any discs on Aug. 12, while about half the company’s distribution centers were unable to transport products yesterday.

The Web site is still running, so members can watch movies online or on televisions if they have the Roku set-top box that enables TV-streaming, Mr. Swasey said.

The company has a notice on its Web site, posted updates on the Netflix online community forum and has sent e-mails to affected users, Mr. Swasey said. He declined to say what caused the technical problem.

“We apologize, and we’ll be automatically issuing credits to all of you whose shipments have been delayed,” Netflix said on its Web site.

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