# Blockbuster Fallout at Netflix



## John Corn (Mar 21, 2002)

When Netflix, which lets viewers rent DVD's online and receive them by mail, went public in May with a $94 million stock offering, the event was hailed by some as a sign that dot-com shares might again be worth more than a good laugh.

But when Netflix shares nose-dived early this month on word that Blockbuster, a subsidiary of Viacom, had begun testing a competing subscription service through its stores, the potential Netflix story line began to sound familiar: a popular Internet debutante meets traditional company in dark alley; emerges with no friends and a balance sheet in serious need of medical attention.

Blockbuster's subscription service is in the early stages, although company executives said last week that the effort was proceeding nicely. The service, tentatively called DVD Freedom Pass, allows store customers to rent an unlimited number of titles each month for between $20 and $25 a month, depending on the city. Customers may have up to three titles out at any time, and are not assessed late fees.
Blockbuster also tested a service allowing consumers to go online and rent videos from their local stores, for in-store pick up. That service, too, was not profitable enough to roll out widely. "The same goes for the online subscription model," Mr. Klose said. "We've been looking at this stuff for a couple of years, and we're constantly watching that to see if something breaks loose there."

The competition between the two companies remains limited, of course, since Blockbuster is unlikely in the near future to move into the mail order rental business. But if the Netflix service takes off, that strategy could shift quickly, since Blockbuster has acquired a business that specializes in mail-order rentals, according to one person close to the company. (A Blockbuster spokesman declined to comment, and because the acquisition was not considered material to Blockbuster's business, it has not been publicly disclosed.)

Mr. Hastings of Netflix says he is likewise watching Blockbuster closely, but is perhaps more vigilant of Wal-Mart Stores, which he said, "is actively working on" a competing online rental service. A Wal-Mart spokeswoman declined to acknowledge such an effort.

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## Chuck W (Mar 26, 2002)

I was in Netflix for a while before quitting(didn't watch DVD's enough to get my money's worth). While similar to Netflix offer, to me it's not the same. What makes Netflix good is the convenience is being able to get them delivered to your door. I would goto the website, chose what I wanted and have them in the mail in a couple days. When I was done, I just put them in the prestamped return envelope and dropped them in a convenient mailbox.

I can't access the story(I'm not gonna register to read an article), nut it sounds to me like you will still have to drive to the video store to get your movies. 

Now if this is thru the mail, like Netflix, then yes, Netflix will either have to offer a better price or problems end up failing.


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## Chris Blount (Jun 22, 2001)

I've been using Netflix since the beginning and love them. They have recently opened a distribution center in Houston so I get my DVD's in 1 day! I never go to Blockbuster anymore.


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## Mark Holtz (Mar 23, 2002)

The biggest problem I had with Netflix is that some of the Anime I wanted to rent was always on a "long wait" list.


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## Chris Blount (Jun 22, 2001)

Even the "long wait" list in unpredictable. I have had DVD's on the long wait list for 1 day and then all of the sudden they get sent to me.


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## Jacob S (Apr 14, 2002)

How long does it take for them to send you dvd's, and do you have to wait until they get the dvd's back before you can have them send you anymore dvd's? This would mean that even if it would take a day to get there and a day back to you, that would be 2 days of waiting on the minimum, and then four days if it took 2 days to get there and 2 days to get back.


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## Chris Blount (Jun 22, 2001)

> _Originally posted by Jacob S _
> *How long does it take for them to send you dvd's, and do you have to wait until they get the dvd's back before you can have them send you anymore dvd's? *


When I first started out with them, the lag time was about 4 days. (i.e. 4 days to get them and 4 days back). Now I get them in 1 to 2 days because they opened a distribution center close to where I live. They will only send you out new rentals when they get the old ones back. I personally haven't had a problem with that. I can have 4 DVD's out at a time so by the time I watch the 4th DVD, a new one is usually on it's way or has already arrived from the 1st one I sent back.


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## invaliduser88 (Apr 23, 2002)

> _Originally posted by Chris Blount _
> *I've been using Netflix since the beginning and love them. They have recently opened a distribution center in Houston so I get my DVD's in 1 day! I never go to Blockbuster anymore. *


Did not know this! Maybe I'll give them a shot!


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## Jacob S (Apr 14, 2002)

One could send 2 of the 4 back so that way you always have a few dvd's.


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