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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."
Who is the third?! Deaths always come in threes.
"but they do consider on-demand Internet-download services to be a threat to their business model."
In the US? Please. With current broadband conditions I'd probably have to wait longer than snailmail to get a DVD.
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.
Zip.ca is basically a Canadian version of Netflix. I'm really enjoying my subscription.
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.
I work as a mail carrier and I see a lot more netflix dvds than blockbuster or walmart dvd rentals. In fact I didn't even know walmart had dvd rentals until I delivered some to a house.
Something I've noticed about netflix is that they always send dvds in groups of 3, where blockbuster and walmart might send one.
"the fax machine is nothing but a waffle iron with a phone attached to it." - Grandpa Simpson
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
Amazon is joining the game? Maybe we'll FINALLY get a company doing this that's willing to rent out porn! Woohoo! They'll leave the others in the dust in no time.
Warning: Apple/Nintendo fangirl. Likes her electronics cute & cuddly. May be rabid.
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.
"Netflix Pioneers Industry To Get Left in the Dust?"
W... w... what? I can't even parse the grammar there. What does that mean? Who's getting left in the dust... Netflix? Industry? Pioneers? Typos in stories are one thing, but at least try to have the story titles make sense, okay?
OtakuBooty.com: Smart, funny, sexy nerds.
Wierd, I have been a long time subscriber and they have never done this to me. As a matter of fact they just opened a new distro center close to me and I can easily get 3 sets of movies in two weeks if I return them the same day direct to the Post Office... I have tried Blockbuster, walmart and Netflix and Netflix had the best selection and turn around time.
is GreenCine. It has an enormous selection and actual customer support. It's not one of the huge corporations like Blockbuster or Amazon, but rather like your friendly local rental shop.
I've found that Netflix "throttles" my rentals after a period when I rent too many movies for them to make a profit. They will delay shipments and change the wait status on your queue to absurd amounts of time. I'm led to believe that this practice will become even more common with the new price drop. This is, of course, against their terms of service, but it's extremely difficult to prove - the USPS bears much of the blame. Couple this with the nonexistant customer service, and the frequent movie renter is definitely at a disadvantage.
Of course, if you only rent two or three movies a month, then Netflix is fine. But for those who really like film, I'd highly recommend supporting GreenCine.
...and settlers get the land.
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 have to rebut to defend Netflix. I happen to live by the post office that serves the PO Box for the Orlando Netflix warehouse. I consistently get very good turnaround unless I get to a popular movie on my list like when Kill Bill came out, in which case they just send the next movie on my list. If I mail on Monday, they get it on Tuesday, I get the movie back on Wednesday or Thursday, depending on when my individual USPS delivery guy gets it sorted into his route.
Actually, Netflix did rent Adult DVDs in their early years, then quietly dropped it around the time they began to get more press. They never had anything hard core, just stuff along the lines of Girls Gone Wild. I guess you'd call it blue. Some of the Japanese idol stuff was rather interesting, they even had some hentai...or so I heard...;-)
To the making of books there is no end, so let's get started
This is my first month as a customer, and they've already done that to me. At least I think they did. I returned my 3 movies at the same time, they were all recieved at the same time, yet only one replacement was sent on Friday. The rest were sent on Monday (not even Saturday! And I know they ship on Saturdays.), even though they were all marked as available now. I always send them back the same day I recieve them, so I guess I was ahead of their hidden quota. It's a shame because I was otherwise very impressed by their service. Now I'm not sure if I'm going to keep it.
I could understand delaying until Saturday if they're swamped... but Monday? That's suspicious.
I'll probably keep it another month, but if it happens again, I'm leaving.
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
Piss commacomma moan
So long as they have n copies of a popular title and m > n people who want that title, someone has to wait in line.
They have made the decision (and not entirely unreasonable) that the people who use the service the least get to be further in front of the line than the people who use it the most.
If this offends you so much, you can buy a few million DVDs, set up a customer service and distribution organization and run your own competing service, and deal with people who whine that your arbitrary decision for who gets first dibs is somehow unfair.
TANSTAAFL
(In interest of full disclosure, I have never used Netflix, nor do I work for them. I am a new (and happy) customer of Blockbusters' competing product.)
How does the Slashdot Effect happen given that no slashdotters ever RTFA?
Of course, no /. discussion of Netflix could be complete without revisiting how Netflix discriminates against regular users by retarding delivery of their discs in favour of immediate availability for new members...
Da Blog
Depending on how they deal with this, Netflix could be THE de facto standard of DVD rentals...or they could be the ones that started the industry and then died out as others perfect their idea. The part that concerns me is how " the company is not really afraid of Blockbuster, Wal-mart and Amazon moving into their markets...". That almost sounds like the Apple of old...thinking you have a superior product and not fearing your competition can kill. If they take their competition seriously and strive to maintain their market share while improving their service before the competitors have a chance to catch up...that's when being the pioneer can pay off.
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
Along thoes same lines here's a couple of other links. Here's the delay calculation Netflix denies:
Enter a reasonable 10,10,3-at-a-time
Here's a study done on rentals to prove it.
Take a look at what happens to availability of movies right after you pay for the next month.
Oh, if you cancel 1 day after renewing, you have 7 days to send everything back and you loose the rest of the month.
I'm very happy with GreenCine. Much better selection than NetFlix when I joined (NetFlix may have improved by now) - particularly in anime and foreign films. They have every anime title I've ever looked for, while NetFlix had holes in most series I looked at, and I rented Hero and Shaolin Soccer from them before their official US releases.
They have nice forums and member lists, which is how I found out about Hero and Shaolin Soccer. Their customer service has been fine - I've got a quick, satisfactory reply anytime I had an issue.
However, their only distribution center is in San Francisco. Delivery time is only two days for me in Los Angeles, but I heard it's 3-5 days or so for people on the east coast. Interestingly, for me it's not two business days, just two days. They don't send or recieve on Sunday (obviously), but anything sent Saturday arrives Monday. (And, unlike NetFlix, they do ship on Saturdays.)
factoid means a piece of information that is repeated so often by so many that it is believed to be true, not a cute, interesting baby fact.
From dictionary.com: The -oid suffix normally imparts the meaning "resembling, having the appearance of" to the words it attaches to. Thus the anthropoid apes are the apes that are most like humans (from Greek anthropos, "human being"). In some words -oid has a slightly extended meaning"having characteristics of, but not the same as," as in humanoid, a being that has human characteristics but is not really human.
It's pretty ironic that the very definition of factoid has become a factoid itself.
I return them the same day direct to the Post Office...
A shorter way to say it is "I own a DVD-RW".
Plus the search system on their site sucks. But that, unlike a patronizingly moralistic corporate attitude, can be remedied, I presume.
Seriously: Netflix ships movies for a flat monthly fee. So does Blockbuster and companies X, Y, and Z. What makes it better? Nothing? Well, then we compete on price and margins go out the window.
It's basic business 101: if you have a strong differentiator (my product is better and no one else can sell it), you can charge more and make money. If you can't, you wind up in a commodity market and you make a lot less...or get trampled by a larger competitor, go through a consolidation wave, etc.
A good example is Tivo. First to market. Good product. Not really anything unique or hard to copy. Now facing stiff competition.
Yes, good customer service should matter, but honestly in these kinds of businesses it's really a self-service kind of deal. Sure if they ship you Patch Adams III when you were waiting for Back Door Housewives Vol 14 you will call up and complain but you're not building a real relationship here.
Advice: on VPS providers
I've been a Netflix subscriber for about a year. At first they were great. Three movies, one day to return them and a day to ship them. I could watch about five movies a week. Then, Netflix realized postage was eating them alive and announced they were going to increase their price from something like $20/mo to $22/mo. The same week, Amazon and Blockbuster both introduced their services for something like $18/mo. Netflix immediately retracted their cost increase and announced a price matching reduction, and THAT'S when they started the big slowdown that made sure that I received at most three movies a week, assuming no USPS holidays. The policy of "as many as you want as long as it isn't more than 3/week" is cheesy weasely. They should just be honest and charge a flat rate per movie, or offer a flat monthly rate for a service not to exceed X DVDs per month, and get back to shipping without an artificial delay. I don't expect them to lose money, but as customers, we should inundate them with emails, calls and letters demanding they deal honestly and treat us with some common decency instead of lying. I know that's what marketing people do, but we shouldn't let them get away with it.
Around the same time they started emailing to ask me when I received a DVD. I always told them a day later than the actual day I received the DVD to try to beat their scheduled delay BS, but I don't think it worked.
Still, three movies a week is not too bad. Any more and my productivity would suffer. It's about $1.70 per DVD. My local library charges $1 per day, but they don't have many titles and I have to go there to get them. Netflix is a MUCH better deal. I like the convenience of internet browsing, wide selection, deep stocking (seldom a wait if I want a title), and delivery and pickup at my mailbox.
It takes me 30-60 minutes to get a movie at Blockbuster, and I average a movie a minute browsing online at Netflix. I don't know why it's so much more efficient, but it is. That's the real value of Netflix. There are over 100 movies in my queue and it's on autopilot. Whenever I want something special, clicky clicky, top of the queue, here it comes.
I can see why they'd consider online movie distribution a competing technology, and why they'll probably try to be first into that market as well. It's the only way I can see it being more convenient than their current DVD service. Of course downloaded movies will be horribly encumbered with Digital RESTRICTIONS Management. I have a couple of friends who are building significant DVD collections by ripping Netflix movies.
>> My ultraviolent Linux switch video.
Not to be a troll, but that title has nothing to do with the article summary...
"When the only tool you own is a hammer, every problem begins to resemble a nail." - Abraham Maslow (1908-1970)
As a netflix customer who gets a lot of DVDs, and whose DVDs have sometimes been slow in coming, this seems extremely reasonable.
Just my $0.02.
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.
..I run a mail-order business and the variability of shipments between two static addresses is huge. I'm seeing a lot of complaints about Netflix "holding" movies, and though I've been a mostly happy member for 2 years, I don't think they're doing this.
More importantly, I think they need to increase manageability and sorting features on their website. The fact that you can't more easily manage new releases, sort by release date, etc., frustrates me.
the reason i have netflix besides anybody is they have a very large collection of documentaries. Seriously, that is a very real advantage (atleast for me)....
"There is no flag large enough to cover the shame of killing innocent people."--Howard Zinn
I have to agree. I've had netflix for a couple years and honestly, the three at a time subscription provides me with more than I actually need. I can't imagine who has the time to watch a couple movies per day and have a life, but for you guys, get a subscription to BOTH Blockbuster and Netflix and you'll never have to leave the couch!
For what it's worth, I did try Blockbuster for a month because it is a tiny bit cheaper, but when it appeared that they were missing an entire season of Voyager (the 4th I think), I canned them. They had all the other seasons - I just couldn't find a single episode from the season I wanted to see - not by any search pattern or even through a time consuming browse. And in response to whoever writes back saying I'm an idiot because it exists and I was to stupid to find it, I don't care. Blockbuster's search/browse interface was flawed enough to make finding the season hard and was reason enough for me to stick with Netflix.
What changed under Obama? Nothing Good
Is anyone else finding Vonage ads particularly annoying. I just found their pop under ad, a first one in years. This was only a few minutes after hearing their sound ad on slashdot. Seriously, its some chick's voice suddenly coming out of nowhere urging me to buy something. Yes, I use Firefox.
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.
I have been with NetFlix for about a year. I have enjoyed the service and find the website easy to use. I am a tab browsing addict and open a ton of pages at once. Browsing one page at a time is too slow, even over broadband. So, the Netflix site rules for ease of navigation.
I return movies the day after I receive them, most of the time. A few months ago, I decided to try BlockBuster. The net service is a little cheaper and I can also get two instore rentals a month. The big advantage is the games.
So, I am finally catching up on movies and I need to decide which service to keep. Here's the kicker: Both places have service centers in Denver. So, my movies go to Denver no matter what. However, BlockBuster's service is constantly faster. They claim the post office notifies them of which movies are sent for return and cross ship. This gives me a couple more rental periods each month.
For example, after Christmas, I sent 6 movies back to NFLX and BB on the same day. All three BB movies arrived before the first two from NFLX. What gives?
So, for me, after I receive my last two movies in my queue, I am cancelling the NFLX account. However, I do wish BlockBuster.com was easier to navigate...
I root for the underdog, but I am also a capitalist. Therefore, I go with the cheaper service that gets the movies to me fastest. And on both accounts, it is currently BlockBuster.
just my two cents.
Thought Experiment: Suppose a Netflix customer does not have time to watch all three DVDs the day they arrive. They copy them to a hard drive, mail them back that day, watch them all in the two day time they are in the mail, and then delete them before getting the notice from Netflix that they have been received. Illegal? Probably. Unethical?
Suppose they keep them on the hard drive for the five day window from the day they are received to the day they get the next set? An interesting question...
"Remember, there never were pineapple-almond cookies here."
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...
What does Roland Piquepaille think about this?
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
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
Probably that too. It's like taking out food to eat later from an all-you-can-eat buffet.
Their whole buisniess model depends on the assumption that average turn around time is not that short. Every time you send back your DVD to get new ones, it costs them money. By copying contents to hard disk, you shorten the time abnormally, thus cost them more.
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?
They only allow you an "extra day or two".
To quote their difficult to link to FAQ: "If you still have a movie or game seven (7) days after the due date shown on your receipt, we will convert your rental to a sale. The movie or game will be sold to you at the selling price in effect at the time of rental, which is either the retail price, or, when available, at the previously-rented selling price, less the initial rental fee you paid."
I'll stick with NetFlix, Thank you.
"In wine there is wisdom. In beer there is strength. In water there is bacteria." --Old German Proverb
That's true, Blockbuster's "no late fees" thing is false advertising. That's why the Attorney General of New Jersey is suing blockbuster.