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?"

They each have thier own issues to deal with...

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 [netflix.com], 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

Re:They each have thier own issues to deal with...

DVD-by-mail is neat and will overtake DVD rental at a brick-and-mortar location in the near term. But the DVD-by-mail industry (which consists of mainly Netflix now) is going to have a fight on it's hands when video "rental" over the network takes off. (maybe 2007Q1?)

Re:They each have thier own issues to deal with...

Netflix as a corporation has many lawsuits, but their out there with no real basis to start off on anyhow. These plantiffs are suing because the DVD's arent there in "one-day" always. Isn't that the postal services fault? Also because not all the plans were "unlimited rentals", well did ya really think the 7 dollar plan was gonna be the same as the 20 dollar plan? I mean, come on.

Re:They each have thier own issues to deal with...

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).

Holy Un-"Settlement" Batman!

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!

Netflix...

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.

well-positioned for downloadable movies...

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

Re:Netflix...DVD's on wheels-VOD

Man, you score +1 for attitude, but you're still brutally wrong when it comes to actually having a valid point.

For the vast majority of consumers, no video rental mechanism is bandwidth-throttled. Consumers don't want an entire station wagon full of movies delivered every night, so the higher bandwidth potential of USPS-delivered movies versus downloaded movies is not relevant to them.

The pacific ocean has a lot more water than lake michigan, but you can't fill up a bucket faster in the ocean than in the lake.

I also think that you'd have a tough time demonstrating that b&m video stores are still in business because they offer the ability to rent more movies at once. b&m video stores thrive because they provide lower latency than the alternatives -- you can walk in without having already decided what movie you want to watch that night. With netflix or other USPS-delivered rental options you have to decide days in advance what you plan to watch.

A download model will combine the best of both worlds -- allowing low latency flexibility of choice along with the convenience of not having to leave the house.

Good show on the attitude, though. I'm sure in some circles that can be an effective alternative to having a well-reasoned position.

The Red Envelope

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.

Th problem is...

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.

The Jugular? *snork*

With what, a floppy rubber claw? Foam rubber teeth?

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.

Re:The Jugular? *snork*

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...

There's more to it than that

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-

Re:There's more to it than that

Market value and debt don't really tell enough. Earnings and cashflow are bigger tools to gauge the success of the companies.

How about some good old-fashioned "profit"? (And we'll have none of the EBITDA crap either!). A quick look at the charts on Yahoo reveals a $603.30M loss.

Inexplicably their market cap is also about $600M, with a $1200M debt. Now, I have a debt that's more than my income or savings, sure, but it's a mortgage, so my creditors can sell my house and reclaim the money. If they sold the company in parts, assuming that strip-raiding it adds 25% in value over market cap, that still leaves $450M in bad debt.

Of course, it might be that all debt is really from one division (say, the DVD posting division) that they're looking to get rid of. But still, things look pretty bleak, seeing as that debt isn't doing anything right now, and their last investment pretty much failed. This kind of company is usually propped up by their creditors to salvage what potential is left.

The classic online vs B&M model

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.

Does Netflix have a future?

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?

Plan 'D'

Blockbuster should try a second billion dollar deal with Enron's Broadband division.

And I really wanted to stay on the sidelines here

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.

Re:And I really wanted to stay on the sidelines he

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).

The "Video-on-Demand" argument...

For those of you who think that $videoBymail vendors will suffer when Video-on-Demand hits the market, think again. You need to remember that quite a few folks out there that are building up impressive home video libraries thanks to services like Netflix and Blockbuster.

Couple unlimited rentals with the ability to download the jacket [cdcovers.cc] to any movie ever made... Well I'm sure you get the point.

tried both. blockbuster's UI *sucks*

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.

Blockbuster may have a chance...

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.

Re:Blockbuster may have a chance...

Blockbuster still has one ace up its sleeve - porn.

They'd have to change their name to Nutbuster...

Seriously, though, I haven't been inside a Blockbuster since the "No More Late Fees" fiasco.

Both have strengths and weaknesses

I have a Blockbuster account. The killer feature with Blockbuster Online is the two free store rentals each month. We queue up all the obscure titles in the online queue (ever seen "Children of Heaven" from Iran, or "Primer"?), and get popular stuff at the store.

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 switched to Blockbuster

I switched from Netflix to Blockbuster's mail service last year and haven't yet felt the need to switch. I'm still on the original $14.95 pricing plan for three movies out at a time. Yes, Blockbuster's UI is inferior, the selection might not be as vast, and it might take an extra day or two to receive a flick over Netflix, but the real deal are the coupons.

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).

Blockbuster is evil

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.

Go Netflix go!!

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

Death to Blockbuster

I used to like them. For movies, they can't hold a candle to Netflix's selection, etc in their brick and mortar stores. I don't know about their online service, but Netflix is great (there is a distribution center within about 40 miles of me so my turnaround is very fast).

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:

• I left BB because their service/selection was terrible
• I joined Netflix
• I found I LOVED Netflix
• BB Gets mad they are no longer the big-cahoona in town
• So they make a competing service and expect people (who all seem to hate them as much as me) to switch from a company they love (Netflix) or no mail rentals to BB's mail rental service
• People either laugh at them or ignore them
• Netflix proffits.

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.

PeerFlix

What could give both of them a run for their money is PeerFlix.

See: http://www.ellenburg.org/content/view/17/26/ [ellenburg.org]

In Canada, we have Zip.ca

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.

Having tried both....

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

Netflix is a red herring

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.

Never mind the profit, feel the revenue?

Blockbuster is doomed and bleeding money, but still pulls in 10x Netflix's revenue.

Let's see... A billion dollars of revenue and big losses, or a tenth of the revenue and millions in profit...

Netflix is for people who know what they want to watch in advance and watch a ton of movies.

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.

Netflix

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.

One Case Study

We use Nexflix. Never even considered Blockbuster as an option. YMMV.

Hollywood Video

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 would never use Blockbuster

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.

It's only a matter of time...

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.

The war is over

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.

I've tried both

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.

Out of spite

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.

What Blockbuster should do.

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.

Connections

Netflix has James Burke's [palmersguide.com] Connections [netflix.com] (II & III), Blockbuster does not.

'nuff said.

Dear everybody

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.

Returning to the actual question...

"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...

was there ever really a war?

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.

late fees

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.

price switching

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.

I used both, and Blockbuster is a lot better

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?

In other news

oh, wait, there is no other news, it's christmas.

Netflix woes

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.

Don't Fprget GreenCine

GreenCine is a CA based DVD by mail compnay that specializes in independant films, sci-fi and anime.

http://www.greencine.com/ [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.

They both will lose

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.

I still won't give Netflix my money.

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.)

Blockbuster has(had) monopoly intentions.

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!

Re:old news

Than why not spend you time at Digg?

Re:liberal hippy crap

Because it's not the investor's fault that you have no health care. They saw a market space with one dominant and thought a competitor could do well.

Stop wasting time posting to Slashdot and do something about your own situation, loser.

Re:Yeah, fuck BlockBuster

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.