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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?"
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.
That's exactly what Netflix is concerned with. They beat Wal-Mart AND Blockbuster in the online market. But the execs at Netflix are concerned with the content-over-broadband market. They view that as their primary threat.
Rupert Murdoch's DirecTV will begin delivering content from Murdoch's empire, and anything else they can get their hands on, over the DirecTV lines to their DVR, both as trickle download and OnDemand.
Comcast is working on OnDemand.
And then there is the Netflix-TiVO-Comcast arrangement, in which TiVO programs the trickle download so Netflix subscribers can rent movies onto their TiVO box. After all, the only better way to rent a movie from Netflix would be to have it available, nearly instantly, on your TiVO box. And that is what is coming. You'll be able to view a few movies from your TiVO box. When you delete them, the next ones will be able to be viewed. TiVO's engineers are using their broadband boxes to download the moves, 6-8 hours each.
Now, OnDemand can beat that turn-around time, but only with limited content. Netflix can deliver ANY of their content. And, with content protection, the consumer will see ZERO download times (unless you delete 2-3 Netflix movies rapidly, then you will need to wait for the download).
The Future? Who knows? But OnDemand and trickle download models are emerging, and a lot of money is being spent trying to determine the video equivalent of the iPod.
So let's not forget them. The new video iPods can store 15 movies. You could download from iTunes store and carry it with you. Neat-o.
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
That's not entirely true. A number of franchises never participated in the program, and many that did are cancelling it. Basically they need the late fees as an incentive to get people to return videos and games, without them they were having trouble keeping new releases in stock.
-matt
but, I bailed on BB way back because there late fees were excessive. I checked them out again with there "no late fees" thing (and they are like, 6 blocks from my house). And I switched stores to them. I get a WEEK grace with no late fees, even on a 2 day rental (and video game rentals). And I've actually used the "convert to purchase" a few times on kids/family movies. For instance, I rented Robots, my kids liked it, I read the recipt that it was only $12.99 more to buy it,just kept it and paid the bal. next time I was in. that really is pretty nice.
DO NOT DISTURB THE SE
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.
I think it's their fault for advertising it when they know the postal service doesn't deliver it within a day (I don't believe the postal service guarantees or implies 1 day service.)
However, despite the nonreality of the 1-day service, I have no problem recommending them. When I used to have their service, I intended to cancel with them before going on a 7 month trip to Europe (mostly because of a lack of anime in their inventory at the time....). Apparently I didn't, when the person keeping my finances in order gave me the CC bills^_^;;;;; - one phone call later, without being put on hold, they gave me my money back in short order without hassle (because there was no account activity) and with still being friendly.
I think the only thing that might occur within the next ten years is that Netflix's current business model will become obsolete (like Blockbusters) due to bittorrent downloads (and if the studios start offering legal ones).
Blockbuster still has one ace up its sleeve - porn.
BB doesn't do porn - they have a 'family friendly' reputation, so no Jenna Jameson for you. Meanwhile, Greencine does.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
I think it's their fault for advertising it when they know the postal service doesn't deliver it within a day (I don't believe the postal service guarantees or implies 1 day service.)
USPS's fastest shipping option is Express Mail, which is overnight to two-day service (depending on the origin and where you're sending it to) with a money-back guarantee. I haven't seen Netflix's advertising but if they note that proximity to a Netflix warehouse is the primary factor in delivery time, then there's no false advertising; I don't expect a package from Nevada to arrive in Northern Virginia after a package from New Jersey or Kentucky (Amazon and several other online sites have warehouses in these states).
They don't, nor have they ever, edited movies.