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Netflix Pioneers Industry To Get Left in the Dust?
prostoalex writes "The New York Times profiles Netflix, the company that pioneered subscription-based DVD plans where a disc is sent via postal service and no late fee is charged. It describes the company from May 1998, when it originally launched the Web site as a DVD-by-mail rental service (with late fees). Interesting factoids: Netflix operates 30 centers around the country and 11% of San Francisco residents subscribe to the service. Turns out, the company is not really afraid of Blockbuster, Wal-mart and Amazon moving into their markets, but they do consider on-demand Internet-download services to be a threat to their business model."
Just wait until you have kids, if you don't feel this truth now.
When I can walk by the bargain rack at Circuit City and pick up something I might like to see (again) like Zardoz for $6.99 it hardly makes sense not to own it. Or some deals at Costco.
If I pick up a few of these deals, here and there, I start to have a backlog of stuff to watch, and never feel the need to commit to subscriptions or pay full-fare for something "new" and "hot".
But that's just me. I am a cheap bastard saving for retirement and helping my kids thru college, but still trying to have a few toys...
This issue is a bit more complicated than you think.
So the question then becomes, what will the MPAA do? Netflix is probably right, as long as they run a open ended service w/out late fees, they're set. Blockbuster is still tied to a brick and morter establishment that prevents them from really running Netflix into the ground, Amazon and Walmart while in possession of huge amounts of $$$ aren't first to market on this.
Fundamentaly, when someone thinks of mail delivered DVDs they think netflix.
They're right, download on demand movies are the only real threat they face, and that decision remains up to the MPAA. A legal download option stands to one-up netflix simply because it removes the need for postage.
Of course, there is still the bandwidth/time/storage problem to contend with, but time should solve those for any theoretical on demand download site.
Killfile(TGK)
No trees were killed in the creation of this post. However, many electrons were inconvenienced.
While Netflix may feel that on-demand Internet-download services are a threat to their business model, it is truly signifigant that Blockbuster viewed Netflix as a threat to their physical-store business model.
I believe the rise of Netflix was instrumental in their adopting their 'no-late-fees' policy (I know some exceptions apply), and this was mentioned by many pundits around the time of Blockbuster's move.
Blockbuster's move and the related coverage for Netflix/zip.ca introduced a lot of people to the whole industry - the people that wondered why Blockbuster would do such a move. Great P.R. for Netflix and zip.ca.
"There's no success like failure, and failure's no success at all."
- Bob Dylan
If they are afraid of the online download distribution system (and they should be), why not pioneer it?
I used to be a member of BMG but left after i discovered allofmp3.
I use blockbuster's online DVD rental service. Originally I was attracted by the cheaper price and the ability to rent a couple new releases in the stores every month. Recently though, I've found I prefer to use my two coupons a month to rent games. The game rentals are more expensive (but free with the coupon) and with Blockbusters new almost No Late Fees policy, I can basically have two two-week game rentals. It's cool to have almost a month to tackle a longish RPG for free with my online DVDs.
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I have been downloading episodes of "Lost" because the quality is quite a bit better than my (analog) cable TV. Yet the files are only about 350 MB in size. That translates to a little over 1 megabit per second. In practice, my internet connection (Comcast) doesn't seem to have any problem exceeding 1 megabit per second. (It is 3 or 4 mbps claimed).
If the music industry is any indicator, fear of piracy will be a bigger impediment than bandwidth. It does seem irrational, since it's already easy for anybody to make a downloadable version of a movie, but there you go.
I've been a Netflix subscriber for almost 2 years, blockbuster for maybe about 3 months now and I am probably the most hated customer at Netflix.com and blockbuster.com
If I send out a movie on say Monday, I get that movies replacement by at least Friday. Everytime.
You see, I have a movie addiction and watch about 6+ movies a week ( never watch television or play video games otherwise though, so this translates to well under 10hrs/week of tube-time ).
I watch and return movies to netflix and blockbuster.com as fast as they send them usually. Overall I get to watch about the same amount of movies from each. That is 3-4 movies per week.
Netflix has always been honest, and blockbuster reasonalbly so as well. Blockbuster has a gimmick price though ( $15.99 is introductory, it's actually $25/mn ), but they give 2 instore rentals per month ( which I need for quick fixes ).
The difference is the web interface. Blockbuster's is clumsy. You don't get your recommendations on the first page like Netflix does. Netflix gives me, personally better movie recommendations but that maybe because have rated almost 700 movies with them. Netflix also gives links of critic links and customer reviews on every movie page. You can even see how many customers have rated a movie. Blockbuster's killer feature to me is that you can search movies by writer. Netflix needs this badly.
Based on upvotes, Ageism is the only "-ism" Slashdotters care about and think isn't SJW
" I know you were joking, but IMHO downloading movies is not that far off.
I have been downloading episodes of "Lost" because the quality is quite a bit better than my (analog) cable TV. Yet the files are only about 350 MB in size. That translates to a little over 1 megabit per second. In practice, my internet connection (Comcast) doesn't seem to have any problem exceeding 1 megabit per second. (It is 3 or 4 mbps claimed)."
Actually I was very serious. Who wants to watch a 750mb xvid movie on a 52" HDTV? I would expect to be downloading a near 1:1 DVD quality movie--which is typically 4.6-8.7GB.
Now, I could probably easily download a full dvd within a matter of hours on my connection--but not everyone has the luxury of bandwidth and not restricted by transfer caps.
How would these be distributed? I'd suspect a direct system such as FTP would be expensive considering most bandwidth at the minimum is $30/mbit when purchased in mass quantities (read: 100mbit->GigE) Bittorrent? Right...I love bittorrent as much as the next person but truthfully I rarely max out my line downloading something from bittorrent and I still find FTP faster when downloading linux iso's (some in DVD format...) Not to mention the fact that your average user will not be happy having to pay for a service and then sacrifice upstream bandwidth to feed a service like bittorrent.
I would like to have a movie at the click of a button too...but it's not going to happen until the network infrastructure can handle the bandwidth requires, when the costs are affordable to users. And, I'll say it again--compressed video isn't going to fly.
Netflix users are more tech-saavy and rip-n-burn the DVD's in one day, send them all back and get three new ones. Wal-Mart and Blockbuster users actually watch the movie when they have time, thus the sporadic return and delivery rate.
Plus the search system on their site sucks. But that, unlike a patronizingly moralistic corporate attitude, can be remedied, I presume.
Maybe you need to take a look at more Xvid and Divx converted content... Because most of that stuff in those DVD's is fluff (unless you need six audio tracks in 5.1+ surround, the extra 'content', etc which frankly I don't see a need for). Taking it down to a singlw AC3 audio track and going with high quality mpeg4 in either regular or widescreen nets about 300-500 MB per 30-40 minutes (it just happens to be most of what I download in that format are 30-40 minutes). You dont' loose anythign with those in my experience... In fact I have a japanese TV series in Xvid that suggests it was recorded from some sort of widescreen HD format (not sure what exactly japan uses, but this was higher than the res of any DVD I've ever played back) that is stunning...
we are all invisible unless we choose otherwise
I manage about 3 sets a week, however the longer I keep this up the slower it gets. It started with them shipping and receiving on the same day. then it moved to about 50-50 for that. now I send them in and I get an extra day delay in about 50% of my dvds and I never EVER get one sent back sooner than the next buisness day from the day it was recieved.
Seriously: Netflix ships movies for a flat monthly fee. So does Blockbuster and companies X, Y, and Z. What makes it better? Nothing?
How about the fact that Blockbuster seems to lose movies all the time? We had the free blockbuster 3 week trial. A week after we mailed back our movies we had to go to the site and click "I mailed it in". They mailed out new ones, only to have those get lost in the mail as well.
We cancelled our blockbuster subscription and switched to Netflix (blockbuster obviously has some serious problems because when we cancelled our subscription, they offered us another *month* free).. Netflix has never lost our movies in the mail, and have always been pretty timely.
There are those people who claim netflix throttles their movies.. but those same people probably don't take holidays into account. We saw some serious lag in movie turn-around time around christmas, but that disappeared shortly after the season.
http://www.hackingnetflix.com/
I noticed a significant decline in shipping speed in the 3rd month and have filed a complaint with my states attorney general.
-- these are only opinions and they might not be mine.
there may be other factors that impact the commercial success of netflix, but video on demand is not likely to be one of them. many vod tests, in this country and england, have failed for lack of consumer support. the vod model of searching titles is totally unsatisfactory to the consumer pattern of search and shop. the vod model is a tree structure, a binary search across categories and sub categories. netflix has done an interesting job of pioneering a non hierarchical recommendation process now available through Macromedia. the other albatross that vod has to bear is the complete inability of cable system operators to market anything .. but that's another story.
While paying for DVDs takes some cash, Netflix's largest expenditure is shipping costs, IIRC.
A mail carrier further up mentioned that Netflix DVDs tend to be delivered in sets of three. There's a pretty easy explanation for this: Netflix processes on Monday through Friday. The mail service ships Monday through Saturday. There are probably more people watching on the weekend then the week, so the likelihood of a collection of DVDs being mailed back on Monday is probably higher. Additionally, assuming you mail out to them and your DVD arrives on a Friday or Saturday, your chances of that DVD being processed on a Monday are fairly high, which increases the chances of that being grouped with another movie that made it to their center on Monday.
The point in all of this is to simply explain why the discs arrive in triplicate so frequently. Given this, why doesn't Netflix have some sort of slightly larger envelope that they stuff with return envelopes and discs? It would seem to me that sending that bigger envelope (it only needs to be a little bigger, so no postage increase) with two or three DVDs for the same postage would cut costs tremendously.
If anything, during the last year that I've had Netflix, I think my level of service has gone UP. I get my movies quickly, and often in spurts, sometimes turning over 10 a week. They've never so much as batted an eye when the post office ate a DVD.
See, my story is just an anicdotal as the next guys...
Lots of posts here focus on the "internet" side of downloadable movies. Even with my 10 Mbps cable modem, downloading movies this way sucks.
My cable company, cablevision, has an on-demand service that works very well. They also have a high-def on-demand service that works equally as well. Since getting both of these services, my wife and I have stopped going to the video store (and canceled our netflix subscription).
Granted, the selection isn't great, but that will change with time. Once all cable companies roll these services out to every customer and provide the same selection as the "rental" guys - the days of rental will be over.
Who in their right mind wants to either drive to the store, or pre-select the movies they want to watch? When my wife and I get in the mood to watch a movie, we just scroll through the list and pick one. No hassle.
When we see a movie we think is worth adding to the collection, we buy it (that doesn't happen very often these days).
The next bastion of entertainment to fall will be movie theaters. It's only a matter of time until first run movies will be shown via on-demand services. Imagine....no more $20 box of popcorn, no more sticky seats, and no more loud, obnoxious viewers.
Sure, there will always be teen-agers that want to get out of the house to support theaters....but think of all the people that want to go see movies that can't or won't (the disabled, parents with young kids, the elderly, those that can't drive...etc). Their money is just as green as everyone else's.
-ted
Netflix is in business to make money. I know they do that rationing of heavy customers, and I don't mind one tiny bit. Why: I want them to survive and continue to offer an incredibly broad and diverse selection of movies to be delivered to my home for a reasonable monthly rate. I don't want to have to resort to some lame companies like Blockbuster or Walmart. The Netflix business model is predicated on customers who have actual real lives, and don't watch twelve damn movies a week. If I ran Netflix, I'd cut you people loose, or charge you more. But what they do instead, throttling your consumption, is fair enough, as it is passive and lets them maintain their pricing model.
As for intentionally denying getting it. Give me a break. Maybe they do, maybe they don't. I doubt it. I've been a member of Netflix since they opened shop, 1998, back when I bought my first DVD player and paid through the nose for it. I'm grandfathered in to the four-DVDs/month plan, but pay for three. I have about 500 DVDs in my queue (of course I'm delusional to think I'll ever get all those, esp. since we just had a baby), and my wife has a couple dozen in hers now (that new split queue feature is excellent). Over those almost seven years, I've rented hundreds of movies from them. I've returned movies and gotten the replacement BEFORE Netflix even indicated that they'd received the return. Netflix has never received probably a dozen of the movies I've returned, and they've always taken it on the chin. I've never received a good number they sent. I've received movies that were broken clean in half, or more pieces. And I'm still thrilled with the service. Just not the Postal Service. I'm sure some bastard mail handler has a lot of those missing movies sitting at home.
Larry
So, how big is your DVD collection? I'm convinced that those Netflix DVDs that go missing wind up in some postal employee's collection... :-) Seriously though, sure I've had a bill or two go missing, but Netflix DVDs... a couple dozen have disappeared into the void over the years.
Larry
I second the GreenCine fandom. I got sick of waiting for Netflix to stock all the anime and non-mainstream discs that I wanted to watch.
GreenCine has a much wider selection than Netflix. Plus, they have a 1-day turnaround policy: they always send out a disc the day they receive one from you. No more 3-day delay shenanigans like what Netflix seemed to do during high usage months. If you've ever been sick of waiting for Netflix to stock a disc, or just sick of Netflix in general, and you live within a day or two of GreenCine's San Francisco distribution center, it's worth checking them out.
I was going broke purchasing movies that Netflix would never stock, and my bookshelfs were overflowing with discs I'd likely never watch again. I've all but stopped purchasing DVDs now. "Am I really going to watch this more than once?" Only a few discs get a "yes."
Yes, I didn't understand the title.. it had nothing to do with the story that was linked. The story was pretty positive on Netflix, it wasn't predicting that they would get "left in the dust" or anything like that.
:)
Ah. Maybe it's just missing a comma, then.
"Netflix Pioneers, Industry Left In Dust" means that Netflix is pioneering and the industry (presumably the brick-and-mortar rental industry) is being left in the dust.
I didn't read the linked story (I have no idea what it's about, based on the story title) but a differently-placed comma would result in "Netflix Pioneers Industry, Left In Dust" which would mean that Netflix pioneered the video-rental-by-mail industry but is now getting left in the dust by heavyweights like Blockbuster, Wal-Mart, etc.
Reminds me of that "Eats Shoots and Leaves" book about the power of misused punctuation.
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But thats their problem in assumeing thbis
just like how the cable companies assume you won't be useing all that badnwidth they advertised to you...
In Holland, this is NOT illegal. I know of people who go to the DVD-theque with their laptop, rent a disc, copy it onto the harddrive, and turn it in again immediately. I think it's called time-delay or some such, and it's legal because it is in the field of fair use. One of them is a college professor, so he should know. As long as you delete the movie the next day (assuming that would be how long you would have been able to keep the physical disc), there is nothing illegal or unethical. It's a plus even for the DVD-rental place, because they can rent out the disc twice in one night, and the people who would not delete the copy are making 'backups' at home anyway. Now I don't know about Netflix, so it might be different. There are probably a million agreements you have to sign to become a member, keeping you from any right you may or may not have had. I don't know! /side note
When you think about it, all this restricting customers by way of not letting us make backups and creating dvd-regions and the like, isn't that restricting the free market? The same free market these corps advocate?
http://www.peerflix.com/
peerflix is an interesting way to get movies in the mail. Basically, you are sharing out your own DVD collection with other peerflix members. I've been using it for a few months now, and while it still has a few bugs to work out, it seems promising.
That's true, Blockbuster's "no late fees" thing is false advertising. That's why the Attorney General of New Jersey is suing blockbuster.