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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."
This isn't necessarily bad for NetFlix. First, it "validates" the market, and gives NetFlix a bunch of free PR (all the articles about the Walmart entering the fray will compare/contrast with NetFlix), including making tens of millions of consumers more aware of this new sort of rental scheme that they just don't grok yet. Second, it makes NetFlix a take-over target for any other company wanting to join in the competition (perhaps even BlockBuster, if their home-grown offering falters). Then again, maybe NetFlix will get blown out of the water.
To say the least, that's not going to be good for business
Competition is good for the consumer.
"My mother never saw the irony in calling me a son-of-a-bitch." - Jack Nicholson
That when I go to rent a movie, it's usually on a spur of the moment thing. It's like I ask my wife "what would you like to do tonight" and she might say I don't know...wanna rent a movie?
So then we go down to the rental place and look around, not really sure what we want and pick something up and go home THAT NIGHT and watch a movie.
With renting a movie over the net and having it mailed to you isn't quite what we're looking for. We want something we can see that night, not two days from then...because the way we live two days from then we might be doing something else that comes up etc etc. We live by the seat of our pants and never really plan out little things like movie watching in advance.
At least, that's how we play it. Is there really that much need for this out there? Just curious.
"Music is everybody's possession. It's only publishers who think that people own it." - John Lennon.
It will be good for the consumer because there will be price competition. As it stands now, Netflix has cut down on service and raised prices since they started. In fact, this is EXACTLY the type of service that Wal-Mart should EXCEL at. Wal-Mart is a master of the supply chain, which is the main issue with DVD rental through the mail.
I don't understand the argument against Wal-Mart in regards to small businesses. If Wal-Mart undercut everyone else, pushed small businesses out of business, and then jacked their prices up I could understand the argument. I haven't seen that though, they're always the lowest price. Lowest price is good for consumers. As for the service aspect - I don't need good service to buy rubbermaid, toilet paper, toys, video games, or dvds. I just need/want low price.
Not good for the consumer? Rubbish. You act as though aggressive competition guarantees an irrevocable market dominance. It doesn't! As soon as your theoretical future-walmart doesn't meet the consumer's desire for quality+low prices+convenience (something it currently does quite well, mind you) another business can rise up to meet that need.
Give the consumer due credit -- when a company takes it's customer base for granted and acts like a "dinosaur" it loses market share to smaller, more nimble companies that give the customer what they want. The business history books are full of examples (see Sears & Roebuck, K-Mark, IBM, etc.)
Result? Problem solved, unless you simply don't believe that capitalism works.