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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?"
(It's (s/b) aside), you're looking at two different business models, two methods of income from those business models, and two different forms of data to deal with all of this.
Blockbuster's original market plan (et al as they were Blockbusters original market lan (aside from gobablling everyone else before they could become a threat) was the expectation of a decent percentage of people who ran over the deadline. Think of this as a bar who sells some money from sub- to mediocre-quality food. They aren't in the business for that food (or its quality). They're in the business for alcohol. Once NetFlix showed significant staying power. Blockbuster realized they'd better come with something...fast. And like the software world: why invent when you can copy? (even if you don't have the source) After that, it has become a price war with a couple of twists: Blockbuster has to support brick & mortar stores, including personnel, Flix does't; this impacts a lot of things I won't iterate. Blockbuster permits impetuous|discretionary purposes (stop & rent a movie, stop for a movie, and you're golden.
Maybe the four of you could, like, start a club or something.
Why yes, I AM a rocket scientist!