Netflix vs. Blockbuster Revisited

Thomas Hawk writes "Exactly one year ago at thomashawk.com Davis Freeberg debated Wall Street analyst Michael Pachter regarding the future of the online DVD rental world. Freeberg maintained that Netflix was the clear and obvious choice for a winner while Pachter predicted that in the next 12 months Netflix would significantly underperform Blockbuster. Now another look one year later at the competitive landscape in the DVD market. Pachter is nice enough to continue the conversation and even admits in hindsight that he made a mistake regarding his prediction on Netflix vs. Blockbuster for the year past -- but Pachter still maintains that Blockbuster has the upper hand over Netflix in the coming year ahead. Freeberg, of course, thinks he's wrong once again and that Netflix will continue to dominate as the leader of this market. "

Comments

I want what comes next

[BenEnglishAtHome]

The biggest problem with Netflix is time. Like most folks, I figured to sign up, watch movies quickly, and really get my moneys worth. It doesn't work out that way. Just because "Teenage Exorcist" is waiting in my mailbox when I get home doesn't mean that I'm going to feel like watching it tonite. Recently, I've gone through nearly three busy weeks when I haven't had time and haven't been in the mood to watch a movie. At that point, my subscription isn't very cost-effective.

I'll keep subscribing for now, but I may just be one more watching-mood-drought away from cancellation. What would really keep me as a customer is someone who could offer high quality and fast downloads for a buck or two. Then I could buy on a whim and get exactly what I'm in the mood for instead of picking from among the three Netflix envelopes on the kitchen table that just happened to be fairly close to the top of my queue but aren't *precisely* what I want tonite.

Re:I want what comes next

[boxlight]

Just because "Teenage Exorcist" is waiting in my mailbox when I get home doesn't mean that I'm going to feel like watching it tonite.

I think you're doing it wrong. "Netflixers" I know do it like this -- get the DVD in the mail, copy it to your PC with something like DVDShrink, send the DVD back right away so you get the next item in your queue sooner.

Then later when you feel like watching the movie, burn it to a DVD+/-RW, watch it, then delete the file off your computer.

This may be walking the tightrope of "fair usage", but that's the reality of how people I know are using this sort of service.

boxlight

Re:I want what comes next

[LordKronos]

That's what I've been doing when I don't have time to watch it right away (except I rip them to my mythbox...no need to burn anything).

The problem I'm having is that I'm unprofitable for Netflix, so rather than just canning me outright, they are doing their best to slow me down. After the first couple months of 8 movies per month, many of my returns started taking 2 days to get back to them (the return center is very local, so they have to be sitting on it for a day). That slows my down to under 2 per week. I kept that rate up for a couple more months, and occasionally got 2 a week by mailing back the same day I received it (or when my return actually got processed next day). Now the latest trick is 3 of the last 4 movies have been being shipped from across the country. Thats never happened before, and these aren't old/rare movies, nor are they movies in high demand. They are couple of year old movies that had their run. I never had any problems before with movies being shipped across the country, so it seems more than coincidence.

Anyway, those 2 acts have my rental rate just over 1 per week. That doesn't make it very worthwhile to use Netflix. On top of that, they've been shoving me to the back of the queue for new movies. I added King Kong to my queue the week before it was released. The morning of release, I checked my queue and it said short wait. Later that day it changed to long wait. The next morning it was now a VERY long wait. It's been 4 or 5 weeks now since King King came out, and I'm still at a long wait.

Anyway, my Netflix subscription is just about renew, so I'm planning on cancelling and switching to blockbuster. Well see how they are, but the one real advantage I see there is that they give you coupons for 2 free store rentals per month. That means even if they do the same sort of profiling of high use customers, I can still run out and get the movie from the local Blockbuster in a timely manner.

Re:I want what comes next

[rho]

I don't do that. They come in, we watch 'em when we have time. They go back out. Some months we watch 3 movies a week--some months, just 3 movies total. At $20/month, it's a good deal for me for these reasons:

1) If I hear about a movie I might want to see, or if somebody recommends something I haven't seen, I put the movie in the queue. No fuss trying to remember anything.

2) We don't have cable, so this is the majority of our entertainment budget.

3) With no late fees, we have total control of when we want to watch something.

4) Practically endless choices. I've never gone looking for a movie that I couldn't find.

If you're going to rip the DVDs as soon as they arrive, why not just download them from torrents? It's just a legal (or illegal, rather), and you don't have to worry about shelling out that MASSIVE $19.95 every month and making sure that you somehow game the system so your Netflix rentals work out to be $0.25/movie like a penniless schlub.

It's to be expected really

[Frenchman113]

Infinite rentals, no due dates, a massive library, and you can rent from your very own chair without ever leaving your house. What's blockbuster got to top that?

Re:It's to be expected really

[Scutter]

Infinite rentals? Infinite up to 11 per month when they start throttling your deliveries, you mean. Not such a good deal now, is it?

Re:It's to be expected really

[DigiShaman]

Coupla decades of building brand recognition and customer base?

Such as getting screwed by their late fee policies? That's what I think of Block Buster...

Haha
Hahahahahaaaa

How I look at it.

[apparently]

With Blockbuster, my membership gets me 4 "free" in-store rentals a month for my $17.99 Blockbuster Online membership. So basically, the service is letting me make 4 rentals for $4.50 each (which is about the norm anywhere), and then in additional, I get "unlimited" Blockbuster Online rentals. As Blockbuster figures out how to further utilize their brick-and-mortar stores, I wonder how NetFlix will be able to compete against this?

Re:How I look at it.

[Moofie]

Um, Netflix sure didn't satisfy me. Their stealth throttling policy lost them my business many years ago, before they acknowledged that they throttle their service.

Had they simply been up-front about it, there would have been no issue. However, a queue of 40+ movies, all on "delayed availability", with nothing shipping to me, told me they didn't want my money anymore.

Re:How I look at it.

[PortHaven]

I received a $10 gift card to Blockbuster. It took me over an hour find two movies. Essentially, every movie I wanted to see was out of stock. In the end, I didn't rent anything. Rather, I bought two used movies "I Robot" and I forget what else.

So, I don't think I'd find those in store rentals of much use. Sure, there may be a film that me and a bunch of friends might want to watch right this moment...and be willing to run out to the rental store to get it. But I'd wager all the copies of said film will be rented out. At least that last few times I went to Blockbuster that was always the case.

At least with Netflix I have a steady flow. I also get to watch a lot of TV shows I miss. I've got the 5 disc program and seldom do I not have something to watch. With 5 discs it's pretty good. Just make sure you mix you queue up so you always have something lighthearted, something action and something dramatic. Plus your series filler (currently ST:DS9 for me) *lol*

Re:How I look at it.

[szrachen]

I found that to be a great deal as well. However, I also found that some months I really didn't feel like I needed any more movies than the ones that I got online (and that was when they only gave out 1 rental a month). I've since switched to Netflix because I didn't want to pay $17.99 for the 4 extra movies when I hardly need more than 2 at a time and don't necessarily need the in-store movies. I would guess that the vast majority of people are probably in the same boat.

I guess the way I see it, here is your decision:

Do you watch 3 or more movies a month?

• If Yes, continue...
• If No, just go to the movie store...

Do you need to get a movie at any time on a whim as long as you're alright with driving to the movie store and paying a little extra?

• If Yes, Blockbuster Online is probably better for you.
• If No, Netflix is probably better for you. Be patient grasshoppa.

Other considerations

• I have had better luck getting working discs from Netflix
• The friends recommendation system is pretty nice on Netflix (I don't recall if BBO had this)
• You may set up individual family member queues on Netflix

I don't want either of them to "win"

[hellfire]

I want both of them to keep fighting it out... for a very long time.

Because when video rental services compete, I win.

Three cheers for competition!

Re:i wished they'd pay-as-you-go

[kevin_conaway]

And you're they're worst nightmare.

They would make no money off of you. Business is a 2-way street you know. They get to make money and you get something in return.

I think the situation you're describing is more suited for the "on-demand" model of cable television.

What about Redbox?

[Sentryp]

http://www.redbox.com/ They have some they everone else doesn't... Cheap pay as you go rentals. And you can get fries with that!

Blockbuster's New Releases

[Anonymous Coward]

I got fed up with turn around time with netflix and went with blockbuster. A month later I'm now back with netflix. Blockbuster will not send you a new release until it has been released for 90 days. Netflix will have the movie on your doorstep release day. After renting virtually limitless movies for a year New Releases are all I have to look forward to. Blockbuster not shipping new releases to force store visits completely contradicts what people are looking for.

Until blockbuster can realize that they need to stop putting all their weight behind their stores, netflix will always be the superior choice.

My Thoughts

[MBCook]

I really REALLY like Netflix. I've had them for two years or so and they are fantastic. I haven't tried Blockbuster and I don't intend to because, frankly, I hate the company. Their stores have gone down in quality and the prices have gone WAY up in last few years (specifically video games). All that said, I'd like to comment on something from the article:

"Since the launch of Blockbuster's online dvd rental program in August 2004, they have added 1.3 million customers, but over the last 6 months alone, Netflix was able to add almost as many subscribers. Each customer that Netflix acquired represents pure growth for the company, but of Blockbuster's 1.3 million subscribers, how many of them represent former retail store customers? "

The last few times I've been in my local Blockbuster, they have been doing hard sells on their online service to every customer. They talk about how convenient it is, how much it will save you, blah blah blah.

I seriously doubt Blockbuster has gotten very many new customers at all to their online service. I think most of them were conversions from in-store customers.

Screw those guys....

[Lxy]

Support your local library. Membership is free, and usually you can borrow all the latest movies and music at no cost. There are late fees, but nothing near what Blockbuster et al charges.

MOD PARENT UP

[MustardMan]

Not only does blockbuster online (the thing being compared with netflix) do everything netflix does, you also get coupons for various in-store promotions, as well as free in-store rentals included in the cost of your rental program. I get two free in-store rentals each month, which means if I decide on a whim that I want to see a certain flick, I can pick it up without paying any extra on top of my monthly subscription fee. I still have my 3-out-at-a-time movies to pick from as well. BB does everything netflix does, plus some.

I feel your pain!

[Quiet_Desperation]

they come as e-mail links,

Oh my GOD! The ultimate in inconvenience!

you visit the web page,

Great Satan's Firey Balls! That must require the use of at least three muscles to move the pointer and click the link! Does Blockbuster offer health insurance?

print it out, pick it up from the printer,

Jesus Tap Danching Christ On A Cracker! Those foul villans! They make you trek all the way to the printer? Do they subsidize the required team of Sherpas and ruggedized GPS navigation equipment?

then have to remember to bring the coupon when you go to the store.

Wow! What does Blockbuster think? That we have highly evolved brains with complex memory capabilities? Those fools! Thos bloody, viscious fools!