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Blockbuster's Offensive Against Netflix Flops
bigtallmofo writes "With over four million subscribers, Netflix was an obvious target for rival Blockbuster. In 2005, target them they did. Introducing their own DVD-by-mail service and (for a while) undercutting Netflix's price point, Blockbuster went for the jugular. A year later Netflix shows a market value of $1.5 billion with no debt compared to Blockbuster's $684 million worth with $1.0 billion in debt. Is there still a DVD-by-mail war or has Netflix won?"
Not to bring the whole "throttling" thing into this, but it really seems that the war now is between Netflix and themselves. If they can keep from shooting themselves in the foot again, i.e., lawsuits, etc... Then theoretically, They shouldn't have anything to worry about(considering their market share). I can say from personal experience that they are trying to protect and keep their existing user base, and are quite apologetic when called on it now. I am currently enjoying a a free month + two months at half price after calling them on it. Bottom line is this, they both obviously have deeper personal issues to deal with... I'd say the war is on temporary hold until they can both get their crap together
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I think Netflix is too entrenched to be taken out by another company. However, I do think faster broadband and downloadable (legal) movies like those available on itunes are going to slowly chip away at netflix.
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Netflix has already partnered with Tivo, which already has tivo-to-go that works for the video iPod.... potentially they're ready to roll-out downloadable movies...
Seth
$5 / month hosted VPS on linux = awesome!
Yeah a number of people might subscribe to Blockbuster's deal. It might suit them fine. But in this case, Netflix has won the mindshare. Blockbuster is the video store on the corner, and well-established at that; but on the internet, Netflix is the common word. The red envelopes are signature. They've won the highly-important mindshare game, and they appear to be winning the business game, too.
Sure, there are always advantages of one over the other. Blockbuster has instant gratification---I can get the movie I want within minutes. Netflix has wider selection---I can't walk into a BB and find much anime. They also have convenience---I decide on a movie, I can click it and it'll be there tomorrow. And I can procrastinate and watch it when I feel like, returning it when I want. And it's cheaper than the corner store if I watch a lot of movies.
I can't really speak to BB's online service; they might have similar selection and pricing, but they also have the same disadvantages. And after dealing with Netflix ("oh, the movie never came? here, we'll ship you another free of charge") vs Blockbuster ("oh, you returned the movies in the morning, but we didn't notice til after noon... that's $6 please"), I would definitely rather do business with the former.
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
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How we know is more important than what we know.
That company has been fucked for at least 7-10 years.. I have seen 3 Blockbusters come and go in my town alone..
Now, they have gotten rid of 40% of the Blockbusters where I live (Long Island).. so I could only imagine how many more have been, or are in the process, of being shut down..
I've stress tested both. Netflix was able to push out 9 movies a week for 6 weeks, and then throttled down. Blockbuster managed 4 movies a week, for the less that a month I kept them.
Now I just borrow what I want from the library system. Reserve online, get it all pulled and sent to a library near where I am during the day. No limit on the number of DVDs I take out.
Based on my Blockbuster experience, I would not even consider them again.
Market value and debt don't really tell enough. Earnings and cashflow are bigger tools to gauge the success of the companies. If Blockbuster is making enough money to service the debt (and other obligations), then they're doing fine. If Netflix has enough cash reserves that they don't need debt to keep operating, then they're doing fine. Debt is just a tool that businesses use.
-h-
I used Netflix when they first came out, as I thought it was a very novel idea and one worth trying. It worked great until I ran into the same problems that everyone else did - delays with new movies, being pushed into the far reaches of the queue and other inconveniences. I quit Netflix due to their growing pains, but didn't have a ton of animosity toward them. Having been in the business world, I understand that sometimes you can shoot yourself in the foot with success when demand exceeds capacity.
Recently, I was given a Netflix subscription again and noticed that they've gone through substantial upgrades, added new features and have none of the same queue problems that I exeprienced before. To me, this shows the maturation of the company, because they have the resources now to meet their customer base, given that they are now a very profitable company with the means.
I don't think Blockbuster is going to go kaput over the issue, because there will always be people who prefer a brick and mortar video store or you'll have an occasion where you can't wait a few days in the mail for a video. For this, Blockbuster is king. However, the cost of running a B&M operation like Blockbuster far surpasses an online only entity like Netflix, where store space, rent, maintenance, employees and the like are no longer issues. This means that Netflixs' margins are simply leaps ahead of what Blockbuster could even hope to achieve in their wildest dreams.
So can Blockbuster compete with Netflix? I think the answer is on the walls to everyone. I think this is exactly why Blockbuster tossed everything (and the kitchen sink) against Netflix, because they saw the picture and it didn't look pretty.
Do I think Blockbuster is going to bite the bullet? Not at all. Do I think Netflix will take a giant cut of of their market and force Blockbuster to resign itself to a B&M only operation with limited expansion abilities? Very much so.
Netflix has been very good to me, I bought the stock at about $10 and now its at $27. However, with good video on demand coming soon I have to wonder if NetFlix has a future. I doubt that Netflix could compete with the likes of Apple and Google when it comes to video on demand. I'm very curious to hear whether Slashdotters have abandoned their Netflix accounts in favor of services such as Comcast's OnDemand and would you prefer a download service to NetFlix?
"However, I do think faster broadband and downloadable (legal) movies like those available on itunes are going to slowly chip away at netflix."
Tell me if this saying doesn't ring a bell with you.
"A car full of DVDs, has a greater bandwith than any wire."
Parallel car versus serial wire.
Blockbuster's 2 free rentals a month are sweet; I used to use them for video game rentals (which are now $7 each at my local store).
That said, with all of the comments on which service is better I'd like to weigh in on a few specific points:
First, each service does a good job of what you want it to. Keep a large quantity of movies queued up and they show up in the order you want and you've always got something to watch. Look into who has a better catalog of what you like to watch and stick with them.
Second, each service FAILS when you use it to the limits. I've heard people saying they average 18-23 movies a month with netflix/blockbuster. 18-23 movies!!@?? That's WAY below a dollar a movie, and don't forget shipping back and forth (at least $.60). The idea here isn't to scam the company into a loss on you, the idea is to use a service and have a reasonable good time using it.
Now, I'm all for fairness in advertising (i.e.: unlimited should mean unlimited) but don't complain when you only get 15 movies in one month, for $17. And ESPICIALLY don't complain to me when I know that the majority of the people who are doing this crazy 8 movies a week thing are simply burning every movie right when it comes and then shipping it back the next morning. It is all but impossible to watch three movies a night three nights a week. That is SURELY not what these services were meant to be. You're raising my rates, and it's totally illegal as well.
Than why not spend you time at Digg?
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
Couple unlimited rentals with the ability to download the jacket to any movie ever made... Well I'm sure you get the point.
I'm not fat, just big boned...
started with netflix for obvious reasons. switched to blockbuster because the allure of getting a couple free in-store rentals each month was tempting (there is a blockbuster a few blocks from me in DC). also, blockbuster seems to have more titles available than netflix.
however, the simplicity and robustness of the user interface from netflix is extremely superior to blockbuster. ratings are much better. watching trailers and reading reviews is easier.
also, there are more categories in netflix. i like to watch lots of foreign films, and blockbuster doesnt break them apart like netflix breaks them into different subcategories -- japanese, chinese, etc.
overall, the little details really enhance my experience, so ive chosen netflix.
01100111 01100101 01110100 00100000 01101111 01110101 01110100 00100000 01101101 01101111 01110010 01100101 00101110
The Netflix executives aren't stupid--you can bet that they have contingency plans for getting into the downloadable content market. Whether they can pull it off is another question.
iTunes may have a lead in this area, but Apple also has big hurdles to overcome to make a good business out of this; a lot of 320x240 downloads isn't going to cut it.
Very valid point, they're also hiring a "video encoding engineer". Of course it should also be noted that most people who choose to watch movies want to watch a movie on their big screen tv plugged into their (insert level of surround sound) system. Yes, a few of us have working HTPCs (a few of us just use XBMC, but that's another story). However downloading a movie, and watching it in an arbitrary (compressed) file format (with or without special features, menus, etc.) requires a select group of people. That coupled with the current state of broadband technology in the US (withstanding the few places that actually have FIOS), I don't think there's enough of a market to make a dent one way or another in netflix's market domination. The only thing that could significantly cut into Netflix's market is the customer service level / shipping speed at netflix, and this only effects users who have already been subscribed to the service for an extended amount of time (e.g new members get new releases much quicker then old members. While there might be a long wait for Brothers grimm in my account, a friend who just joined can add it now (or could friday). It's annoying, but one has to admit it helps win over customers ;-) ).
I've used On Demand with Comcast, Time Warner and Cox in three different states over the last two years. They're all still plagued with problems like the movie randomly stopping partway through, the service going down, the boxtop set resetting randomly, limited or no ability to quickly navigate through a movie, etc.
:)
Aside from the technical problems, I dislike On Demand because the selection sucks and is rarely updated, and all the interfaces they've designed for the different systems are slow and buggy.
NetFlix, on the other hand, sends me DVDs I can use however I want, it's one flat rate for as many movies as I can watch at a time, and I can return them whenever I like.
Blockbuster still has one ace up its sleeve - porn. Most of the mom-and-pop shops that survived Blockbusters intense expansion did so by renting and selling hard-core porn. That option is certainly a tough one for Blockbuster, as many franchise owners will object, but for the corporate locations it may be the only option to keep them open.
Of course, this wouldn't kill Netflix - it would just turn Blockbuster into the world's largest chain of sex shops. But being a chain of sex shops is a better option than going bankrupt.
The thing that tempts me to switch to Netflix is their bigger selection (while both collections are growing, Netflix consistenly has about 10000 more). They have lots of BBC titles (including BBC Shakespeare performances on DVD) that Blockbuster just doesn't have.
I am tempted to sign up for both on the $10/month plan. That would get me 2 DVDs at a time (one from each), plus 2 in store rentals from BlockBuster for $20/month. But then, the $15/month I spend now is already a luxury.
The thing that irritates me about Blockbuster is that their DVD event email is screwed up. They forge custhelp.com as the MAIL FROM, despite repeated complaints from me and from custhelp.com (according to the custhelp.com postmaster). Since custhelp.com publishes an SPF record, I have to list Blockbuster.com as a "forwarder" so that the event mail isn't rejected.
I haven't actually tried Netflix yet, but I'm sure they have something messed up also.
I viewed the Netflix settlement as moral dilemma. I typically despise class-action lawsuits as I view them as an extortion by attorneys gaming the systems and plantiffs hoping for an easy payday, but I also try to minimize my living expenses so as to expand my standard of living. In the end I took the moral high-ground and declined the settlement. Another blow against "The Man."
Blockbuster gives two in store coupons every month good for a game or movie rental. With their game rentals hovering in the $8 range, it pretty much pays for itself every month. Blockbuster also credits the value of the coupon against the 'keep it' price for any video or game rented at the store. Good deal (for me at least).
www.lonseidman.com
So price is going to make or break video on demand. If I can download a movie and 'own' it from Apple for $5 it will work. If it's $10, well ... I can get several movies from Blockbuster for that in the time it'll take to download that one movie with most cable/dsl lines. Bandwidth may be hindering p2p for the MPAA more than the RIAA right now, but when they finally do decide to enter the online market, it's going to be working against them. They need (a) a solution ready to deploy, and (b) to push for more bandwidth from ISPs. Since they aren't doing (b) then they probably haven't got (a) yet. That's pathetic considering how long they've been watching the RIAA fight because they didn't have (a) ready in time either. My guess is they'll just lobby congress to keep video on demand on PVRs and then hope the internet will just go away.
This is definately a personal quarrel I have with BB, but I feel it is a valid one. I've worked for two different divisions of Blockbuster (at an actual store and now at the corp. office of a subsidiary of thiers) for four years total and I'd use Netflix any day. BB is an extremely deceptive company. "Don't pay attention to the man behind the curtain" is how they like to present their motives to employees and customers when we know we're gonna get railed ( No Late Fees? Please... who didnt see that it was a load of BS? ). Sucks that I'm in college or I'd leave in a heartbeat. Needless to say I won't work for any part of their company after I graduate. Don't be surprised if their online initiative falls through completely. I don't think they're ready for it in the least. I know they're throwing a lot of money at it, but it seems like they're rushing to catch up to the market and that's never a good thing.
I will forever be a student.
All hail Netflix!!! I've tried both, and by far Netflix is king!! They are responsive, they address shipping problems/questions, they do not count it against you when the CD is lost in the mail or the wrong CD sent. Over all the CD's are clean and free from straches or problems. So go Netflix!! Enjoy, RedR
But I don't like blockbuster. We'll ignore all the scratched discs and such that the stores would give me (almost no problems in that way from Netflix). I recieved 2 broken discs from BB in about 3 years of renting, compared to 1 in 2 years at Netflix. And if you consider how you get the discs, that doesn't look too good.
But what are their prices now? I'll ignore the "2 day rental" scam they run on popular movies. They used to be $4 for everything. Now they are like $6 for a movie and $8 for a game. EIGHT DOLLARS TO RENT A GAME. I also enjoy how they sell anything you keep out too long to you. That is how their no late fees program works. You can reverse the charge within 30 days and pay a restocking fee, but the fact they don't advertise this fact in that no late fees campaign ticks me off.
Mostly it is the price raises that they keep doing. If it wasn't for video games (I don't get enough time to play them to make Gamefly worth my while otherwise I would HAPPILY subscribe) I wouldn't go near the place.
So, from my point of view, here is what happened:
Never tried BB's program. Never thought of it. I'm surprised it lasted this long. Is Wal*Mart still doing this, no, they sold out to Netflix didn't they?
That's right, WAL*MART FAILED. Surely BB could do it where WAL*MART couldn't.
I've only talked to 2 people who tried BB's program. They both (former and current Netflix subscribers who tried it because of the price) said the selection was worse, the availability was worse, the turnaround was worse. Only the price was better.
And at $2 a month (wasn't that the difference?) no one cared. Netflix later dropped their rates in response anyway, IIRC.
Time to die BB. You're like Radio Shack and Toys R Us. You are not even a shadow of your former self. You're a dead man walking. You can try to switch industries (like RS did) and stay as a bit of a joke (and with their GameRush crud, this looks like their plan), or slowly wither and die (like Toys R Us is doing).
Long live Netflix. They (along with TiVo) have completely changed the way I watch TV. They have a great price for the service, and only continue to impress me.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
What could give both of them a run for their money is PeerFlix.
See: http://www.ellenburg.org/content/view/17/26/
Because then he'd/she'd miss out on the chance to be a dick, which is oh-so- satisfying to the under 16 crowd.
I need to become a lawyer. This lawsuit rocks!
- Sue a company for something they didn't really do wrong in the first place
- Negotiate a "Settlement" that's really a marketing campaign for that company
- Pocket massive legal fees!
Did anyone read this settlement? If you sign up for it, you get a free month of a one-level upgrade of Netflix service. Then, and here's the cool part for netflix...
After that month, THEY CONTINUE TO BILL YOU AT THE HIGHER PACKAGE PRICE!
What kind of "penalty" is that? Trade a couple rentals to get your customers to upgrade packages? That's cheap advertising is what that is!
paintball
Captain Janeway is playing the world's smallest violin just for you.
*deep breath*
Do people intentionally miss the point around here?
Seriously, while the proliforation of broadband will erode the "content via UPS" model. It still will only be a small competition for the simple reason that much more can be pushed to the consumer via the latter, rather than the former (another reason video stores are still in business). Plus it lends itself to parallellism better. Also just in case everyone here is suffering memory loss. VOD (video on demand) via cable bombed dramatically.
The only problem I have with the library is that the DVD's are usually scratched... which means that I have to watch them on my computer. Which is not my 52" TV with surround sound. So I usually end up copying the movie, burning it to a DVD, and watching it on my TV... Which unfortunately breaks so many laws, it's a shame.
Well... There is geexbox... but I really want my remote control...
Zip.ca is the big online DVD rental outfit here in Canada and I've been with them about 4 months now. I haven't rented a single movie from BB in that time, as I am slowly working through every older movie that I wish to see via Zip. It's been great so far, they provide a lot of obscure titles. The few times I've tried for new releases, I find that it takes forever to get them... this is where BB has them easily beat! With BB, you can usually walk into the store the day a movie it's released and rent it. With Zip (and possibly with NetFlix?) you wait weeks for a new release. So, after I get through watching about the 120 or so movies left on my list from Zip, I might cancel them and go back to BB for the new releases. We'll see.
Meh.
Blockbuster seems to get new movies and some special tv-2-dvd things quicker.
Tried both at the same time awhile ago and noticed that Netflix just served you better. Had faster turn-around times, Netflix did pretty much most of the time actually send you your top 3. Blockbuster would jump around more, which was kind of annoying. Also with BlockBuster I felt that they did not see, sure about this model (hope that makes sense, it was awhile ago and the specifics allude me, maybe it was just an impression they left).
StarTux
Blockbuster has probably only ever regarded Netflix as a minor pest. You all are seriously misjudging the size of Netflix's business by looking at market value. Blockbuster is doomed and bleeding money, but still pulls in 10x Netflix's revenue. Only three or four years ago, Blockbuster was still collecting a billion dollars in late fees per quarter or something like that.
No, Blockbuster's latest moves -- mail rentals, changing late fees, rental subscriptions -- have all been lame attempts to fend off a monster called Comcast. This is the same monster that will always keep Netflix a fringe player.
You have to essentially watch 4 movies or more per month to make Netflix a better deal than Pay Per View (PPV). Generally speaking, Netflix is for people who know what they want to watch in advance and watch a ton of movies. That's not most of the public. Most people realize they are going to be bored that day and see what's on. They want instant gradification.
How many of you subscribe to netflix and then let the movies sit for a long time without watching them? Most people I know with Netflix do that, then are basically paying $18 a month for watching less movies than they could watch on PPV for less money.
Face it, Netflix is a fringe player for obscure DVDs and movie junkies. Blockbuster was wasting their time trying to do it. Comcast rules the entertainment market, everyone should be extremely scared of them. Movie studios, theater owners, Blockbuster, Netflix, and those dudes on the streets of NYC selling Kramer-like recordings of movies. Comcast is poised to pwn them.
What kind of 'throttling' were they doing? I know at one point, I was watching at least on movie every day. I had 90 movies rented in 90 days. The turn around from my mailbox out to my mail box in was 2-3 days.
I've stopped buying DVDs because I don't want to re-buy once HD DVDs become available - Netflix is a terrific alternative to building your own video collection.
I have had some annoyances with Netflix though - damaged (out right broken or cracked DVDs) are about 15% of what I recieve, and sometimes I have to wait several days to get a movie from across the country. But all in all it is super convenient compared to the alternatives, and very inexpensive for what you get.
I suspect that Netflix is in a great position now because it would cost a heck of a lot of money to start up a competitive service.
We use Nexflix. Never even considered Blockbuster as an option. YMMV.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
While it's not a perfect service, I've generally been okay with Blockbuster Online. And I can say for sure that if the movie doesn't show up in a timely manner, you can have them ship another. It's automatic. They don't complain, try to talk you out of it, or make insinuations about your character, they just ship the next movie. If you end up with an extra, you just ship it back. Due to the flaky nature of the mail, I think this is necessary for any business working this way, even if it may sometimes be expensive. My first three selections from Blockbuster Online never showed up--but I got an extra month out of it, new copies shipped, and generally everything since then has been okay.
It's really fairly decent service. I can't compare to Netflix because I'm not a Netflix customer, but I think it's worth the money.
We stopped using both Netflix and Blockbuster. BB because of its insane fees and costs, and Netflix just because renting a movie for us is an impulse action. Instead we use Hollywood Video. Its cheap. Quality. And I can find nothing that BB does better.
The problem is that BB has a reputation for fake late fees. I know what finally made me stop renting from them years ago was that they would charge late fees on movies that were returned on time. This combined with their editing of movies, and the fact that it was clear they were trying to trick their customers by offering 3 'night' rentals, and counting both the rental and return nights as full nights, just made me give up on them. When they started their 'no late fees' scam, I didn't even bother to look into them. Apparently that was the right move.
Checked it out... sounds like this is one of those theoretical, idealistic type of things, if everything else is perfect about the world then debt vs equity doesnt matter.....
e ory
But since everything is not perfect, this only sort of applies.
http://en.wikipedia.org/wiki/Modigliani-Miller_Th
Find the distibution center closest to you, track where your movies are returned to and which gets back soonest. Then copy the address and print a label for it. stick it over the shipping address on the netflix, cross out the shipping lines on the bottom.
From my experience, my movies get there at least a day earlier, sometimes 2-3 days depending on how far across the country they want to ship it.
If you don't expect people to take advantage of a service to the point of its collapse, then you are not anticipating human nature. For every business method ever created, there have been people who have attempted to scam it. I understand that the people's complaints are rediculous--too few movies/month-- but what do you expect. There are some who will take more than their share, and some who will use the service like it is designed, thats how the game works. If you can come up with a good idea for netflix to stop this, apply for a job.
Blockbuster edits the movies they rent.
If a movie has scenes that are offensive to the ownership of Blockbuster ( usually sex, they don't seem to have a problem with violence, go figure ) Blockbuster reserves the right to edit that scene out of the movies they rent.
While they will admit to it if asked directly, they will not advertise it in their stores.
Apparently telling the truth (fairly representing their products) values of Blockbuster's owners.
Why do people think that OnDemand will kill Netflix. Cable/Sat companies can't seem to get the price on pay-per-view down to a price that matches Netflix, and that is one stream for everybody. How does making each stream independent for each person reduce the cost to make it comparable to Netflix?
Now I just borrow what I want from the library system. Reserve online, get it all pulled and sent to a library near where I am during the day. No limit on the number of DVDs I take out.
Unfortunately, my library system has only one building and a small collection. Relying on the library for movies might work in a big city, but not in the rest of the world.
Hello its slashdot. Its the people Kurt Cobain was writing about when he wrote Smells Like Teen Spirit. The want everything for free except for the stuff they do, then they want paid for that. So much for my Karma.
OMG Ponies!!! with Glitter!!!! I miss Pink
I'm sorry, but 18-23 movies isn't even one movie a night. And there are at least some users (like my DAD) who are retired, and like to have something to do during the day when everyone else is at work/school/out whatever. The 5 out a month barely supplies enough to keep him in stuff to watch unless he gets the TV series discs which have ~5hrs of content, so 2-3 days per disk rather than one for movies.
And for many rural people (who seem to be a large market segment) we don't get much over TV, and the quality is random - sometimes quite snowy. Also, like many others I prefer no commercials, so I like to watch DVDs of a show vs broadcast. And watching one TV episode a night can eat up the slack (I mean, with several people in a household - you might need 2 discs at a time, due to different tastes and more than one TV/DVD player in a house).
So the idea that 18-23 DVDs a month is for piracy is certainly not necessarily the case, especially for a household of 4. Now if you are a single guy with a full time job, and you're doing that you either have no life beyond work and DVDs, or you are pirating them as fast as you can.
But there are many reasons you could turn around 18-23 DVDs in a month as listed above. Especially if one family member (if not all) are somewhat TV addicted(not unusual in the US).
Opera, Proxomitron-Grypen,GPG 0x0A1C6EE3
Before any DVD you want will be either available on demand over the Internet, or available for immediate burn at your local blockbuster (or kiosk). A Coke Machine sized vending machine could easily store hundreds of DVDs and have a high speed connection to the Internet to download more of them as needed. Why not order a pizza and have a DVD of your choice delivered w/ it? Netflix idea fits a niche right now, but I don't think it's viable over the next 5-10 years.
i have a netflix account, and i like it.. the majority of the time i get movies in a single day.. it's unusual for me to get a movie in more than 2 days.. i stopped going to blockbuster after being charged late fees for no reason on movies that were returned the next day.. foolishly, i paid a series of late fees on movies that were not late to keep the membership.. and blockbuster makes it very hard for the customer to dispute late fees and get a refund, or credit.. hollywood video is less like that, but still there are problems with returns in the drop off boxes outside most hollywood video stores.. some stores in my area leave the videos in the box until the next morning, and late fees happen from that..
in short - i'm sick of late fees, dealing with smartassed employees, shitty selections, and literally getting ripped off at the register..
i have *never* had a problem with Netflix.. yeah, some movies come in 2 days or so, but so what.. in fact, i've had one DVD that was broken in the mail.. they said send it back and they would send the same one out.. it was an overnight transaction.. i've recently had 3 DVDs go missing in the mail on return.. i reported it, and my next selections were sent out the next day..
for 20 bucks a month for 3 at a time, i'm very happy..
i seriously doubt that i will ever go back to renting from a store.. although, i do find the DVD kiosks nice to rent from when we want more movies for a specific event or holiday..
i hate blockbuster..
i hate microsoft.
"You're raising my rates,"
Wah.
" and it's totally illegal as well"
What? Blockbuster doesn't decide what is and is not against the law.
Why yes, I AM a rocket scientist!
Netflix won, Blockbuster got their butts whooped. If you haven't tried Netflix, you should. It rocks.
No, I don't work there, own stock in them or have any vested interested. I'm just a happy customer that loves a good service.
Et al. is short for "et alia," which means "and others." "Blockbuster's original market plan (and others as they were Blockbusters original market [p]lan" really doesn't make sense.
-matt
I looked at PeerFlix briefly, but it had a LOT of issues. I can't remember what they were but either cost or wierd terms or something drove me far, far away when I looked at it... pretty sure it was the cost. You seemed to have points that bought things and it took a lot of points to get things that were not "Pooch & Turner" level movies. There seemed to be a lot of overead fees for a company that got people to mail things to each other.
It's a cool idea but I don't think PeerFlix is going to be the company that makes it popular.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The lawsuit wasn't taking issue with not being able to get tons of movies. The lawsuit was objecting to Netflix increasing its turnaround time for specific customers based on high usage. If Netflix is working flat out to get people their movies, there's no problem. Once they start deliberately slowing their service down, they're in breach of contract (or false advertising, or however you want to phrase it).
I'll bet Netflix is still making money on the people getting 20 movies a month. I assume they prioritize order fulfillment so infrequent users get the best service - keep the people happiest who're giving you the most profit. In that case, the heavy users are getting "excess" manpower and warehouse space, so the only price Netflix needs to beat is the postage costs. I think you're spot on at $0.60 round trip with presorted bulk mail discounts with the post office. The break-even point in that case is actually 30 movies a month with the $18 plan. As long as Netflix can efficiently prioritize their orders, they can probably make a profit on even extreme corner cases. They just have to make sure those users are getting DVDs which would otherwise be unrented, packed by people who would otherwise be chatting with their coworkers.
High-speed Road Trip (18.000KPH)
I've tried both Netflix and Blockbuster online rentals. I had netflix for a long time and quit them when they raised their prices from 14.95. Later on I signed up with blockbuster because they were cheaper. Blockbuster raised their prices too, but they were slick about it and gave me a free used dvd coupon with it. I stick with blockbuster because I find their selection to be perfectly adequate (I've never had trouble renting something I wanted, maybe I'm just incredibly mainstream), and because I find the two free instore rentals indispensible. It's nice as a movie junkie to have a big queue of movies coming to watch stuff, but sometimes you need a movie for a date or something and having two free in store rentals is awesome. I use them every month. Also you can get video games with them.
I think if blockbuster leveraged it's brick and mortar more, they'd cut into netflix's market share quite a bit.
Gnuyen
Netflix would already be doing DVDs online if it weren't for the fucking movie industry's bass-ackwards views on digital technology. The deal with TiVo is basically out - Netflix cant negotiate a reasonable deal with the movie industry to allow people to rent DVDs online and have them downloaded to a TiVo box. There is nothing we can do about it until the movie industry either gets investigated by congress (the only real way to make an industry move nowadays) or someone with much closer ties (like what Apple did with ABC/Disney) makes it happen.
The Doormat
If you're not outraged, then you're not paying attention.
I respond to integrity. BB has never had any. The have always overcharged and when they needed to, they lied (false advertising). Netflicks at least tried to offer a service worth the money. BB would charge you more than the product is worth if they could and they did! If people would remember how companies lied and cheated, they wouldn't lie and cheat so much to begin with. Please don't use BB. Companies should be a little competitive even without competition. We should boycott more often. Am I a communist? What we need is for BB to die, Netflicks to open better B&M stores and an alternative to Netflicks to offer a download service. No, not iTunes.
I had a discussion with a friend sometime ago and I had some suggestions on what Blockbuster could do to have save more money and make customers more happier.
Offer customers both the option of sending it back by mail or returning it back to a local store. That's an advantage of having a local store in almost every city which Netflix doesn't. Of course, if convenience is your thing, you're still allowed to drop it in your mailbox and have the postal service ship it back. But by offering both return methods, both parties will benefit from the user returning to the store. The user's queue will be emptied by the following day (instead of waiting ~3 days for the mail to be delivered and scanned), therefore that means more movies per month. Blockbuster saves money by shipping all the dvds back to the central office together, saving on shipping.
Another feature they can offer customers is the option to allow the subscriber to have 1 dvd out from the local store at any given time. They can even subtract that 1 dvd from the # of dvds they can have out at a time. They can even restrict it to 3+ months old movies, where if the subscriber wants to watch newer movies, they'll have to go through the online store. I mean, every Blockbuster has a bunch of movies that hardly ever circulate much. There's really no point in letting them sit there to collect dust. By allowing users to have access to the local store, this will make them happier and actually give those old dvds some worth in the store. Sometimes you might want to watch a movie that night, but neither netflix or blockbuster would fix that. If the 1 dvd out at a time is too much, you can restrict it to x dvds from local store / month.
Just my 2 cents.
HD Trailers
Oh, it was worse than that. Long after there were DVD players in all the stores and every movie company had released movies on DVD, Blockbuster still didn't offer DVD rentals at all. I kept going in and checking every month or two. They were literally the last video store in my city to offer DVD rentals.
I tried Netflix because Blockbuster were simply uninterested in renting DVDs to me. I stayed with Netflix for the selection and the convenience. Once Blockbuster lost me as a customer, they would have had to do something really spectacular to win me back.
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
Let's see... A billion dollars of revenue and big losses, or a tenth of the revenue and millions in profit...
Or people who want to watch their movies uncensored. Or people who care about video quality, and don't want to pay out the ass for HD. Or people who actually like the extra material found on DVDs. Or people who feel they already pay too damn much money to the cable company, who keep jacking up their fees every quarter, unlike Netflix.
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
DVDShrink is your friend. Along with 10 cent blank DVD's, you're golden.
Hopefully, I don't have to draw pictures here...
Yes, Netflix has certainly blown Blockbuster out of the water. The question is when Amazon decides to appear on the US market. They currently seem to try things out in Europe. Once they learned all their lessons there they will probably go after Netflix. If I worked at Netflix, I would be afraid. Amazon has huge customer base they could use to roll over Netflix. They also have the whole distribution game down better than anyone else. We'll see ...
"As such I no longer have a desire to rent DVDs"
I can appreciate that, but buying DVD's even at Costco is about $14-16 a pop. That's still pretty expensive; that's about $60/month to watch 4 movies. It might be cheaper to pay for HBO/Max/Showtime and get a couple dozen movies for about $25/month.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Jack, meet ass.
I hate to be a liberal here, but does anyone see anything wrong with lending a company 1 billion dollars to start a dvd rental by mail venture even though one already exists? How come I have no health insurance, but a company got 1 BILLION dollars to rent dv-fuck**g-d's???? Am I the only person on this planet that sees something very wrong with this?? Its literally an insult that this country can't find enough money to give free health care but when someone needs to rent a dvd through the mail, well suddenly people come up with over a billion dollars! A BILLION DOLLARS!!! FOR DVD RENTALS?!?!?! AND THERE IS A COMPANY ALREADY DOING IT!!!!!!!!!!!
Porn over the internet? There's no market for that!
I hate mismatched parenthesis.
Well, It's available now. It's called On Demand. I haven't been to blockbuster since discovering it.
Netflix has James Burke's Connections (II & III), Blockbuster does not.
'nuff said.
Ronald said nothing. He flung himself from the room, flung himself upon his horse, and rode madly off in all directions.
Please note that $1.5 billion equity value is less than $684 million equity value and $1 billion debt value. Therefore, the value of Blockbuster is $1.7 billion, in fact, larger than NetFlix. Furthermore, since Blockbuster is more leveraged, if both firms pursue the same strategy in the same industry, you should expect a higher return from Blockbuster stock, as its assets would have the same risk, and Blockbuster would be 'levered up' versus NetFlix.
That being said, Blockbuster is no NetFlix.
"Is there still a DVD-by-mail war or has Netflix won?"
That's a dumb question. What major market for any product has only one supplier (besides government)? There's room for both and more. Must be a slow day at Slashdot to put this up front...
Have we fallen so far that we must describe any competition as a "war"?
I'm trying to figure out what this has in common with war, and I'm not coming up with much. Well, there are two sides. Except some wars have more than two sides. So it's more like a football match.
timeshifting is illegal? *cough*fair use*cough*
It's called fraud when you sell one thing and deliver another.
Had Netflix sent a letter out to their customers saying "We have to cap the number of DVDs you can rent on plan Y to X per month. If you want to see more than X DVDs then we have these upgrades available," the suit wouldn't have had any basis. However, Netflix advertised they offered "unlimited rentals" on their least expensive service when, in fact, they didn't.
Your post implies you think that honesty in day to day business is too much to ask for. It'll be too bad if that becomes a common sentiment.
Are barnes & noble or borders out of business because of amazon ?
do people not buy software at best buy because you can get it cheaper online?
bricks and mortar obviously brings things to the table that web sites can't really match. hence there will always be a place for it.
I couldn't help but to notice how people here seem to think that debt is something bad. I think somebody already pointed to the Modigliani-Miller theorem, but here is a brief introduction for dummies:
Firm market value = Market value of equity + Market value of debt
In case of Blockbuster: $684M + $1000M = $1684M
In case of netflix: $1500M + 0 = $1500M
So the market values seem about equal. Now, of course making a loss is not good, but that has more to do with the operation than the capital structure choice.
The modigliani miller theorem is of course a simplification and in reality debt can have both negative and positive impacts. On the positive side interest payments on debt are tax deductible while equity dividends are not, so by having debt, tax savings can be made. Also debt can help discipline management and prevent them from diverting too much of the cashflows on perks for instance. On the negative side, in case of risks of bankruptcy, the debt can create incentive problems. Depending on the situation the firm may end up not making profitable investments or make unprofitable investments because of the effects of the debt.
http://en.wikipedia.org/wiki/Corporate_finance
Blockbuster was at a disadvantage from the get go. I bet a large percentage of Netflix's first customers were disgruntled Blockbuster customers, so they didn't have a chance of getting those people back. I'll not be unhappy to see Blockbuster close up shop. Netflix et al will get the mass market and the Mom and Pop Brick and Mortars will cover the specialty market and everone (mostly) will be happy and (mostly) un-ripped off.
My days of not taking you seriously are certainly coming to a middle...
i don't rent dvd's anymore, whether offline or online, all the movies that get released are pretty much crap these days, it takes almost a miracle to even get us to waste money on a theater.
sigs suck
"There is nothing we can do about it until the movie industry either gets investigated by congress (the only real way to make an industry move nowadays) or someone with much closer ties (like what Apple did with ABC/Disney) makes it happen."
Investigated for what? The content producer doesn't have to make a deal with anyone they don't want to. Just like you don't have to work for anyone you don't want to. And a company can hire whomever they want.
It's called free will. But I'll remember to sic congress on you, next time you turn down a job offer.
Didnt Netflix force BB to change its late fee policy? Didn't they start their online service after Netflix? Seems BB is follower not the leader. I couldn't stand the ridiculous late fee's that BB charged. It was not a user friendly policy. Their selection has always been the worst. Unless you thrive on mainstream and mainstream alone. Netflix service is the best video rental experience by far.
My karma is getting better everyday.
Recently Blockbuster upped its prices. Inflation is a normal part of life but customers(including myself) were not informed of the increase. I noticed on my bill that it was high and had to call Blockbuster thinking it was a mistake. Im sure whatever contract i signed made it legal not to tell me but imo that is bad business practices. If they had told me before billing me the increased amount most likely i would have stayed with them; i had no thoughts of dropping the service before.
The price is the same, as far as I can tell the selection is just as good, and the shipping (in my case) is better. It costs $17.99 to get 3 discs from Netflix, but I get 2 coupons a month which I can print and take into the local blockbuster and rent any movies or video games for free, which is very convenient for me. They also give me other coupons such as buy one get one free for used dvds, or a free used dvd. Those coupons can add up to more than the $17.99 fee. When I used netflix they said on 5 occasions that they never received the disc, then when we said we were going to cancel they magically found them and tried to get us to stay with them... which we didn't. I have never had any problems with missing discs since I switched to blockbuster.
So, I'm not sure what Netflix could be doing that was better than that... anyone care to enlighten me?
I hope you're joking... timeshifting a DVD?
I had a day without Netflix a few months ago, so I went to BB (hadn't been there in almost a year). I rented Wild Orchid (my wife was out of town), hoping to see some almost softcore action. My wife gets home and a week later I get a notice saying the movie hadn't been returned. I went to the store and the guy says "Yeah it's in. That happens all the time. Computer error you know." So not only did my wife find out, I made wasted gas on a trip into town.
Bastards.
Oh yeah, Netflix needs to work on the weekends.
oh, wait, there is no other news, it's christmas.
/* oops I accidentally made a comment, sorry */
That's my experience, too.
Netflix slows down turnaround times after they verify you're a "secured" customer. Sure they tell you that they have the right to do so, but that doesn't mean it's the right thing to do to a loyal customer. Netflix and Blockbuster both can go screw themselves.
I thought your comment is interesting.
This was not: "The two posts that have actually mentioned this phenomenon so far have both been penned by Chris Bradshaw. Apparently he is the sole target of this dastardly plot. " You are trying to shut off the entire discussion by attacking one messenger?
Maybe the New York Netflix operates differently. The Salem Netflix, that serves Portland, Oregon, definitely does some funny business, in my experience. But Netflix is, for us, still far better than what is in second place. The Blockbusters here are staffed by often difficult, bored people. And who wants to drive to look over a few DVDs when Netflix has a huge list?
I read THE TERMS OF THE SETTLEMENT. I wasn't really concerned with whether or not Netflix actually committed the infraction anyway, the point was that, even if they were, Netflix didn't get any sort of penalty out of it, what they did get was a discounted marketing campaign - so Netflix won, the lawyer won, and the customer was screwed.
paintball
GreenCine is a CA based DVD by mail compnay that specializes in independant films, sci-fi and anime.
http://www.greencine.com/
Their customer servcie is terrific. Their turn around times may be longer if you live on the East Coast because they have no warehouse here.
I have been using them for over a year and I am very happy with the service.
There are alternatives.
Sure, BB doesn't edit movies. But, do they buy the edited version?
For two months I got DVD shipped the same day they were returned. The third month, it took an extra day for every movie. EVERY movie.
You can track your netflix history here: http://www.netflix.com/RentalActivity?lnkctr=yadb_ viewallshippeddvds>.
Look at the day you returned movies.. then look at the day the next one ships. The next movie should ship the same day they receive a movie. If it ships the next day a lot, you're being throttled.
-- these are only opinions and they might not be mine.
Both Blockbuster AND Netflix will ultimately lose - to on-demand cable, which doesnt require you to have to return anything, even as far as dropping something in a mailbox.
Yeah well who cares?
I pirate all my shit anyway. It is the right thing to do.
Join the fight against big business and watch a pirated DVD today!
Netflix was responsible for a huge plague of pop-under ads advertising their service. Regardless of whether your (or my) ad-blocking software (or browser) blocked them, they still tried these dirty tricks, and I wouldn't doubt that a large part of their popularity is due to these sneaky advertising methods. (Of course, a large part is also due to word of mouth, but still.)
With spending like this, exactly what are "conservatives" conserving?
...and in many cases you can resell the DVD's and recoup some of your cost.
I have a bunch of DVDs that I've purchased, so I'm running out of space. So right now, I'm just subscribing to a bunch of premium channels for entertainment and throw in the occasional purchase.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
I've taken to writing on my wall calendar when I receive and send a DVD, and they HAVE gone down in frequency in the last couple months. The parent poster is quite right about things being received and a delay in getting things replaced. Every great thing gets taken over by greedy corporate dickwads who ruin it...
O~ Him that studies revenge keeps his own wounds green. -- Francis Bacon
Blockbuster undercut many Mom & Pop, and small chain video stores back in the early ninties. After putting them out of business they jacked their rental fees right back up, sometimes more than previous said businesses. I will NOT do business with Cockbuster at all. I like to see them getting their asses handed to them, serves them right!
If Kerry was the answer, it must have been a stupid question.
The UN - The largest "political" cause of death.
I have block busters online service and so far they have been pretty good about issuse that i have had w/ them. Wrong dvd in the package or the dvd never came but said it was shipped and they will send out the right one just buy logging on your acount and telling them that they shipped something wrong and they will send it out w/o having to resend the wrong disk back. There are also some added benifits to blockbuster, i now the selection at the store sucks most of the time but u do get 2 free store rentals a month w/ the online service and u get other discounts, ive already gotten two coupons for free (used) movies. Im not trying to say that blockbuster is better but this is the experiance i have had w/ them. No experiance w/ netflix though.