Digital Media

A screenshot of Josh Lowensohn's Netflix queue featuring plenty of "long waits."

If you're a Netflix customer who's paying an extra $1 a month to rent movies on Blu-ray, you might have noticed that the discs aren't being delivered as quickly as DVDs.

Josh Lowensohn, one of my colleagues here at CNET News, was complaining that he's had Futurama: Bender's Game, in his queue for over a month. The flick Wall-E has been in the queue since November 18. Why is it taking so long for Netflix to ship?

I called Steve Swasey, Netflix's very accessible spokesman, and he said the Web video store simply doesn't have enough Blu-ray discs to go around, especially when it comes to hot new releases.

Hollywood just isn't providing enough Blu-ray copies of newly released films as the company would like to get, according to Swasey. That's the first bottleneck. But the spokesman said the problem isn't all the fault of the studios. Once larger numbers of Blu-ray discs for a film are available, the company won't necessarily buy them.

"There is an expense to that," Swasey said. "These things cost money. We deploy money where we think it's going to be most efficient to keep subscribers and investors happy. It's always check and balances."

Here's the final problem that affects frequent users of Netflix and this won't come as a surprise. If a movie is hot and the company doesn't have enough to go around, the film is going to the user that rents fewer new releases, according to Swasey.

"What we're doing is giving new releases to the person who hasn't rented as much," he said. "We've been doing this for a couple of years and fully disclose this in our terms of agreement. If we have a shortage of titles we do what we think is equitable and give the title to the person who hasn't rented as much or who hasn't gotten as much enjoyment from the service."

Lowensohn is among the unlucky Netflix users who rents a lot of new releases. He says he rents about 20 movies a month. When I tell him what Swasey's response is, he is less than satisfied.

"Sucks," Lowensohn said. "Why are they charging me more? I'm paying but I'm not receiving the movies I want."

Swasey said Netflix is bullish on Blu-ray, but right now only a small percentage of customers are asking for the discs. So far, Netflix's Blu-ray service has about 500,000 subscribers. Netflix's traditional DVD business has 8.7 million subscribers.

Swasey seemed to say that Blu-ray will get more of the company's resources when demand is greater. Sorry, Josh.

CNET'S Josh Lowensohn contributed to this story.

A bleary-eyed Greg Sandoval, the News.com reporter who spent a night on the street for a chance at the iPhone 3G, interviews blogger Robert Scoble.

(Credit: James Martin/CNET Networks)

SAN FRANCISCO--The first bad omen for our experience with Apple's iPhone 3G came late Thursday night, when some of us waiting outside the Apple store here may have insulted a priest.

Sitting on the sidewalk in front of the store, a group of us, giddy with excitement about Apple's new handset, noticed a priest walk by. "Hi, Father," I quipped. "Tomorrow, will you bless our iPhones?"

The priest wasn't amused. Things really took a turn for the worse when someone tried to explain to him why the iPhone was worth the money and a night on the streets.

"You have to understand," the man said, straight-faced. "It's the Jesus phone." Of course, he was referring to one of the iPhone's popular nicknames used by fans to describe what they consider awesome power. It dawned on me that I must be the only one in the group who went to Sunday School. I quickly explained that the man didn't mean any disrespect.

Now, I can't help wondering whether there was anything divine involved with Apple's system troubles on Friday morning, which resulted in delayed transactions and spotty phone activations, as well as some disappointed customers. Isn't Apple's customer service typically a slice of heaven?

During last year's launch of the original iPhone, customers were moved in and out of the store rapidly. In San Francisco on Friday, however, the experience was anything but speedy.

After spending about 11 hours in line (I entered at 9:30 p.m. PDT on Thursday), I was one of the lucky first let into the store at 8 a.m. Friday. I didn't leave until 57 minutes later. Out of the first 40 or so people who entered the store, I was the first person to walk out with an iPhone 3G. (Apple employees failed to activate it.)

I felt sorry for the poor souls at the tail end of the line. Their day promised to be a long one.

The first sign of trouble came after entering the store when Joe Wilson, an Oracle software engineer and the guy who stood in line ahead of me all night, turned to me red-faced and said, "The journalists are taking cuts."

Apple let a dozen or so cameramen and photographers into the store to record customers coming in. Some of them decided to hop in line instead of shoot their pictures and video. Not in front of us. Wilson told them very quietly but sternly to move back. To their credit, they did.

Then, one by one, each of the customers was instructed to follow an Apple employee to a workstation. That's when the iPhone experience began to look as disorganized and mediocre as that of any other phone retailer.

First, I was given the pitch for MobileMe, Apple's package of Internet services and software. This was followed by an explanation of the benefits of a two-year warranty. That was followed with a short discussion about accessories. Then came the big blow: the male employee helping me looked up from his handheld computer and quietly said, "I'm sorry, we're down."

I'm told that the iPhone 3G itself will make up for the morning aggravation. Truth be told, I had a blast hanging out with the so-called Apple fanboys and gadget freaks. Sharing food and exchanging news about the iPhone and the new applications, trading insults with people who thought we were goofy for waiting in the cold for "a toy." All of it was worth the trouble.

As it turns out, the best thing about Apple is its customers.

I shot this video just after being allowed to enter the store and minutes after I was told Apple's system went down. You can see the guy helping me is trying to reboot and other employees are prevented from helping customers.