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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."
Last week my local Walmar had a large vending machine that dispensed the DVD that you wanted to rent. and the machine would accept the returns also.
All I needed was my credit card/ debit card.
Maybe they are looking to expand in both online rental and vending style?
Do not look at laser with remaining good eye.
Given that NetFlix has been pushing pop-under ads to my browser, I've chosen to avoid being a customer of theirs. So, as long as Wal-Mart doesn't start doing the same sort of thing, this sounds like a great idea.
I wonder if they'll have a similar "frequent renters get lower priority" scheme to what NetFlix has.
I have always felt of things like NetFlix, and even the Tivo, as a "poor man's video on demand."
You pick the movies you want, and some time, a few days later they are there to watch at your leisure, taking as long as you want, with pause, rewind FF.
Everything you want from video on demand except the ability to pick a movie right now and watch it right now.
Which turns out to be not so important after all. And it's a lot cheaper than putting in all those servers and 7 megabits to every home of highly reliable bandwidth.
Another example of the old adage that you should never underestimate the bandwidth of a stationwagon full of magtapes, except this time it's a postal van full of DVDs.
I'm not *too* worried about this. I think Netflix customers are probably somewhat saavier than your standard Wal*Mart customer. Granted, Wal*Mart has the advantage of being able to pour money into the program (a la Microsoft's Ultimate TV) and the advantage of brick 'n' mortar stores to push the product, but if they play the same censoring games as they do with their music, I don't see them taking off. Hell, even Blockbuster is beginning to see the original-aspect-ration light.
If Netflix embarks on an even semi-intelligent ad campaign, I think they have a fighting chance.
-d
Wal-mart's core customer group are not exactly likely to own DVD players
At $40 or so for a DVD player, who can't afford one?
Well, how much are you going to be able to slash prices on an online DVD rental?
I doubt that's the point. People do their grocery shopping at Wal-mart since groceries are there too. Now they won't have to stop by the video store on the way home either.
I bought Dogma at Wal-Mart. Unedited.
"Want in one hand and spit in the other and see which one fills up first." - My Dad
I really don't mean this to be a troll... but it occurs to me that Wal-mart's core customer group are not exactly likely to own DVD players.
You kidding me? Where else can you get a DVD player for 40 bucks? not Rad Shack.. anything they sell has to be at least 80.. or they wont sell it. Walmart can hook you up with a passable home theater for under 500 bucks.. and they stock a fairly reasonable selection of DVDs and videos. (And yes, even pulp fiction, uncut, last time I was there looking).
So this is the next logical step for them. Super Walmarts have replaced the shopping mall for all intents and purposes. (Sure.. they sell Kmart level CRAP in most cases, but in some instances you can get good deals there.) The one here has a pharmacy, a grocery store, a pearle vision center, automotive, the usual Walmart crap, a decent electronics and sporting goods area, and an outdoors home decor shop. There really isnt any reason to shop anywhere else. (Unless you want to go to home despot for hardware..).
This is exactly the demographic they want.. the kind of people who are at wal-mart three times a week grocery shopping anyway. The difference between a scheme like this and the ill fated VHS in grocery stores, would be selection.
Maeryk
Feminine Protection? What is that? A chartreuse flame thrower?
- last year their revenues were $200 billion us. that's more than the gdp of israel
- of the 10 richest people in the world, five are waltons (of walmart fame). you think gates is a fat cat? the waltons are downright obese!
- heck, s. robson walton may even be richer than bill! the "rich list 2001" claimed that s.r. had a personal bankroll of 65 billion, and placed him in the top slot for wealth worldwide.
- walmart has 1 million employees. three times general motors.
- however, despite all this, the average walmart employee makes only 15k/year.
how do you beat that kind of war chest?2 1337 4 u!
What is so unfair about Wal-Mart moving into the online DVD rental business?
Maybe now we will see some "innovations" in Netflix's offerings?
Lo, an intelligent sub-thread!
The issue here is that mega-corporations like WalMart (and companies like them) have the ability to subsidize long periods of losses in one division (by even giving product away for FREE) to achieve market dominance and force out little players.
Once in a monopoly position, their power is even more significant, because they can further erect barriers to entry beyond simply impossibly low price expectations. For example, they begin invoking patents, pushing for new legislation, establishing single-vendor agreements with suppliers/distributors, and more.
We've seen ALL of this done before. The examples the Slashdot community is most familiar with are no doubt Microsoft, but they didn't invent Monopoly business practices, they just play it very well.
Your idealist view of the free market sounds like it came from a 7th grade economy textbook. It sounds great on paper, but it just doesn't work that way. I don't mean this as a flame, but it is dangerous when intelligent people (as you appear to be) maintain overly-simplified views of matters of this importance. For example, your last sentence regarding Capitalism. Capitalism doesn't "work" or "not work". It's just a pretty good man-concocted system for keeping economics in rough order, and it has its flaws like any other system.
What is so unfair about Wal-Mart moving into the online DVD rental business?
There's nothing specifically unfair about Wal-Mart get into the online DVD rental, except that they can absorb huge losses while they wait for their competition to die.
That may seem like it's just the breaks of being in business, but Wal-Mart's brick-and-mortar store strategy is to open up so many Wal-Mart's in an area that it cuts into everyone's bottom line, even that of the other Wal-Mart's. Then when all the mom and pops are gone and any other competitors -- surprise! -- all the Wal-Mart's but one are closed. Net effect, fewer jobs and zero choice about where to take your business.
This is a "vertical" example of the same thing. Now that many American's have no place to shop and work other than Wal-Mart, they have to leech into other sectors of the economy in order to grow, and growth is the only important thing in American business these days. Doing what you do well (as Netflix does, in my opinion) doesn't count any more. Whatever you do, you have to do it more and more, no matter how bad you get at it because you're doing too much.
This is bad because only being able to choose what Wal-Mart sells is no real choice, and because Wal-Mart has very specific ideas about what you should be able to buy.
That "walmart only, propietary" deal happend to me with a couple of my small refillable propane tanks. I got two from walmart, turns out they put a "walmart_only_ thread on the filler valve, you are forced to get filler-ups/exchanges only at walmart then, unlike my other ones that I can take anyplace handy.
I didn't mind walmart when sam walton was still kicking, it seemed like they at least made an effort to have "made in USA" stuff in abundance, and didn't have weird polices like this propane deal (and what they will probably do with DVDs-good call there), but now,since he's died and who knows who is running it as an economic division of the chinese peoples liberation army, I've about almost completely removed them from sucking on my wallet. Once in a great while I get stuck, and have no recourse but to go in there, and every time I see aisle after aisle of lost homes, lost jobs, lost equity, lost cars, basically a lot of lost hopes and dreams disgusied as cheap trinkets, like what were used to purchase manhattan island. Trinkets, ohhh shiny and cheap.
They are that-cheap. Cheap as in price, cheap as in quality, but very expensive with a bigger look at when once those dollars leave the shores of the US and cease acting as an economic force multiplier.
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