Log in

Netflix Cites Faulty Hardware for Shipping Mishap

26 Aug, 2008 By: Erik Gruenwedel

Database upgrade malfunction or faulty computer hardware: Netflix chose the latter as the cause of a distribution meltdown Aug. 12 to 14 that cut off DVD shipments to one-third of its 8.4 million subscribers.

Media reports had suggested that a database upgrade went haywire resulting in a breakdown among Netflix’s 55 distribution centers nationwide.

“We’ve taken steps to fortify our shipping system with the acquisition of additional equipment and worked with our vendors to verify we’re in good shape elsewhere,” said Mike Osier, chief technology officer, in a statement on the Los Gatos, Calif.-based service’s Web site.

Regardless of the cause, analyst Michael Pachter with Wedbush Morgan Securities in Los Angeles said the mishap cost the online DVD rental pioneer $6 million in third-quarter revenue.

Add Comment