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Wal-Mart Enters NetFlix's Business
wcbrown writes "AP reports that Wal-Mart is entering into the online DVD rental arena, currently dominated by Netflix. Wal-Mart is starting out with 13,000 titles, six distribution centers, and competitive pricing. With a seriously tremendous infrastructure and expansive will, Wal-Mart stands poised to overtake Netflix. To say the least, that's not going to be good for business."
You, my friend, do not have young children. "Hey, let's go get a movie" turns into a two-hour ordeal of car-seats, crying, dropped ice-cream, potty breaks and/or diaper changes, and so on...
The reality is that you give up a little spontaneity for a lot of convenience. You don't find hopping over to the video store for a movie all that troublesome, but there are plenty of people who do. Having a movie you want to see, right at hand, when you find yourself with a couple of hours of peace is a luxury to a lot of people.
I work with a guy whose family lives in Alaska. The one video store in town has a pitiful selection. Netflix provides something they simply can't get otherwise.
As far as movies go, there is a high psychological threshold that has to be reached in order to go rent a movie. Why? Because you have to go, pay on the spot, and are committed to going back within a few days to a week to return the movie. You are less likely to rent something wierd or experiement with different tastes because, well, because, that's just how most people are. But clicking on a movie on the site is low-threshold, and I find myself putting all sorts of odd movies on my netflix list that I would almost certainly never go through the effort to rent at Blockbuster.
According to this article in Slate, Wal-Mart, with $244 billion in revenues last year, represents nearly 2.5 percent of the U.S. economy. Worldwide, they employ 1.38 million.
When I tried Walmart dvd rentals a few months back the selection seemed about the same as NetFlix, but the quantity wasn't there. Just about every title I wanted to rent was a 'long wait', whereas on NetFlix very few titles have any wait whatsoever.
Walmart needs to get a greater quantity of titles before they steal significant market from NetFlix. I would also like to see Walmart enable returns/check-ins at stores (stores could bulk-main discs back to distribution sites).
I currently subscribe to Netflix, and at the rate they are either lost or stolen while in route back to the Netflix warehouse, I wouldn't want to be paying that for each one! Netflix has yet to charge me for those and state they won't unless it becomes frequent.
Anyway, I'll be sticking to Netflix...
I live to gib...
It looks like the first innovation Wal-Mart made was shifting the liability for lost/stolen DVDs to the consumer. With NetFlix, as long as it doesn't happen often, you don't get penalized for having one lost in the mail, with Wal-Mart, it costs you $17.88 (see here).
It's in their blood, though. Wal-mart has been convicted of dropping prices below cost at individual stores to kill the local mom'n'pop competition. Then they would jack the prices back up when they became the only game in town.
It was pretty popular for Wal-mart when opening new stores in small towns, before they were busted for it.
I went to college for this?...