Slashdot Mirror
The DVD Rental Race Analyzed
Thomas Hawk writes "Netflix and Blockbuster have been locked in a price war with regards to the DVD rental space. Wedbush Morgan Equity Analyst Michael Pachter has a $3 dollar price target on Netflix and is in contrast bullish on Blockbuster. Davis Freeberg challenges Pachter's thinking that Netflix will be the loser in the DVD rental battle and Pachter himself responds back on his rationale on why he thinks Blockbuster has the advantage." From the article: "Irrespective of what Pachter thinks about the overall DVD rental business, Pachter's seemingly obvious prediction would appear pretty dire for Netflix. Pacther updated his price target for Netflix On 4/22/05 with the new $3 price. If Pachter is right, then we should expect to see Netflix's stock fall by approximately 75% over the next 12 months."
I wonder how quickly Blockbuster returns videos for what percentage of the population as compared to Netflix?
The world will not get better through technology. We must seek to be better people.
I don't know a single person that uses Netflix so that's rather difficult. I also haven't heard it *anywhere* other than on Slashdot. I wouldn't even know it existed otherwise.
They have 1.5 million customers. Clearly somebody is using it. In our little corp headquarters office or 25 people I can think of 4 people who use it (myself included) and the other 3 are definitely not in the Slashdot demographic.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
I can't believe neither service rents porn movies. I think it would boost service considerably. Just keep it on the down-low. Hide it under "romance".
A war of attrition (price wars) are a top cause of business failures. Read any guide to the top reasons businesses fail. A war of attrition will be listed.
Blockbuster is a fat cow. Netflix will die by the very sword they have drawn.
Offer what the others don't, and offer it at a good price. It doesn't have to be the lowest. I buy from NewEgg not because they have the best price, but because I get what I ask for and they are quick to fix it if I don't.
If you have a widescreen HDTV, Video on demand sucks. All the video on demand I've seen in my area from Comcast, is crappy, standard 4:3 format, and has bad artifacts. It looks just like standard digital Cable or Satelite signal, which ain't great on a 55 inch widescreen.
At least with a DVD, I can play anamorphic Widescreen with 480 progressive scan DVD player and get something that looks half-way like the movie in the theatre. DVD still has artifacts, but they aren't nearly as bad as Video on Demand.
Blockbuster is a joke. An extremely bad joke. Netflix gives me a three day turn around, e.g., I mail on Monday, they receive it and mail a new one on Tuesday, then I get it on Wednesday.
Compare that to Blockbuster that gave me about a 18 day turn around. About 9 days to get my returned DVDs. About 9 days to get new ones back. It was ludicrous! Here's an even better example: Two months after quitting I get an email saying they finally received one of the DVDs I had sent out OVER two months prior!
Blockbuster is SO bad I seriously think it's a ploy to make internet/DVD rental services look back to protect their brick and mortar stores.
If someone says he and his monkey have nothing to hide, they almost certainly do.
The assumption that Netflix does not have physical distribution methods (such as Blockbuster stores) is just plain wrong.
The reality of physical distribution nodes is that Netflix has a lot - they are called distribution centers! In fact they are far better off than Blockbuster in that regard.
Yes for perhaps 10-20 titles you might get stuff a little faster at Blockbuster. However a lot of stuff people rent is not going to be something carried at your average Blockbuster - and then the advantage of Netflix becomes apparent, in that you are going to get ANY movie no matter how obscure pretty quickly. Not just the 10-20 post popular at the moment.
So basically Blockbuster has a lot of distribuition centers, but with poor stock. You can think of it like a really badly run cache management scheme, where Netflix fares much better.
And both are just idling until online distribution takes place in large quantities - I'll bet that Netflix is more nimble in this regard.
"There is more worth loving than we have strength to love." - Brian Jay Stanley