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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
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.
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.
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.
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.
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