Wal-Mart Enters NetFlix's Business

wcbrown writes "AP reports that Wal-Mart is entering into the online DVD rental arena, currently dominated by Netflix. Wal-Mart is starting out with 13,000 titles, six distribution centers, and competitive pricing. With a seriously tremendous infrastructure and expansive will, Wal-Mart stands poised to overtake Netflix. To say the least, that's not going to be good for business."

Maybe not such bad news for NetFlix

[drfuchs]

This isn't necessarily bad for NetFlix. First, it "validates" the market, and gives NetFlix a bunch of free PR (all the articles about the Walmart entering the fray will compare/contrast with NetFlix), including making tens of millions of consumers more aware of this new sort of rental scheme that they just don't grok yet. Second, it makes NetFlix a take-over target for any other company wanting to join in the competition (perhaps even BlockBuster, if their home-grown offering falters). Then again, maybe NetFlix will get blown out of the water.

Competition

[Lizard_King]

To say the least, that's not going to be good for business

Competition is good for the consumer.

Selection problems

[MrLint]

Well as we have seen Walmart has a long and unbroken track record of removing/banning/censoring things too non-consertative/too non-christian/too non-'patrotic'/too 'contreversial' for their perceived vanilla brain dead store-goers. It will remain to be seen what they actually make available.

The only problem for me is...

[ScottGant]

That when I go to rent a movie, it's usually on a spur of the moment thing. It's like I ask my wife "what would you like to do tonight" and she might say I don't know...wanna rent a movie?

So then we go down to the rental place and look around, not really sure what we want and pick something up and go home THAT NIGHT and watch a movie.

With renting a movie over the net and having it mailed to you isn't quite what we're looking for. We want something we can see that night, not two days from then...because the way we live two days from then we might be doing something else that comes up etc etc. We live by the seat of our pants and never really plan out little things like movie watching in advance.

At least, that's how we play it. Is there really that much need for this out there? Just curious.

Re:Maybe not such bad news for NetFlix

[drfuchs]

p.s. Also, all non-Walmart stores that sell DVD players (Circuit City, Best Buy, CostCo etc.) are motivated to push NetFlix on their customers, rather than Walmart, with whom they compete. Everything from the salesperson suggesting NetFlix (and perhaps getting a kick-back if you sign up), to NetFlix coupons in/on the box, to PR at the Point-Of-Sale.

Re:Maybe not such bad news for NetFlix

[markv242]

Substitute "Netscape" for "Netflix", and "Microsoft" for "Wal-Mart" and your comment seems frighteningly on-target.

Bad for business

[Evro]

To say the least, that's not going to be good for business

Um, yeah, maybe not for Netflix. But I thought competition was good?

Morality

[Anonymous Coward]

I think at least one thing wal-mart has going against it is the worry that they could try to inject their social mores into which DVDs they carry.

If they do not do this, that's fine, but if you're going to limit your selection so you don't carry 'immoral' stuff it's going to hurt you. Not carrying stuff you disagree with isn't a problem if you're the big superstore people go to for convenience, but once they reach the online arena, well, if you're going to bother renting movies online then most likely you're going to be the kind of person who actually thinks "Kite" is kind of neat. There's a reason that people buy music from amazon.com before they'll buy it from Walmart.com, and yes, Marilyn Manson probably has something to do with it.

Then again, maybe Wal-mart's gotten a bit more flexible about that as of late.. i found our local wal-mart carrying "the boondock saints" last week. Given, we're in a college town, but that's still pretty surprising.

I heard Blockbuster for awhile censored their tapes. Is this true, and have they stopped doing it with the move to DVD?

Re:Selection problems

[Dark Paladin]

That was part of my thinking.

The reason why I've used Netflix (well, until recently, but that's because I've moved and don't know where I'm going end up for a bit) is so check out some anime, watch it, and return it, rather than spending $20 a pop.

I'd be surprised if Walmart went out of their way to stock titles like that - though, with their buying power, I might be surprised.

Either way, I likes compitition - because then I win.

Wal Mart vs. Microsoft

[rbullo]

It's a well known fact that when Wal Mart moves into a town, many small businesses are forced to hang 'em up, because they cannot compete with Wal Mart's prices. Thus, the relevence of this story. Wal Mart may force NetFlix out of buisiness. And given Wal Mart's poor track record for service, I don't think this will be "good for the consumer". If, however, NetFlix has enough money to compete, we

will be better off for it.

Corporations don't need it

[NeB_Zero]

Why rent a DVD, then have to wait for it???? Go to your locally owned, operated, mom and pop video store and check out an indie flick, or a new release even. Support your local stores and help your local economy. Wal-mart employs one of my parents, but my town's local economy is shrinking, and this town could one day dry and blow away. I think this is a common thing all over the U.S.

In short, SUPPORT YOUR LOCAL BUSINESSES.

Thank you

Re:Competition

[geekoid]

Fair competition is good for the consumer.

Re:Competition

[Indomitus]

Walmart doesn't tend fo "compete" in the same way as other companies. Since they make up such a large percentage of sales of things like movies, CDs, and magazines they make a lot of demands on distributors that other companies can't ask for. This puts their competition on a very un-level playing field and has the result of killing or severely weakening any threats to Walmart's dominance. That is _not_ good for the consumer in the long run.

But Wal-Mart won't...

[D3]

carry such exotic fare as the non-rated version of "Embrace of the Vampire". So what good is the service? Seriously, Wal-Mart will heavily sensor the movies they carry. I say screw-em.

Re:Maybe not such bad news for NetFlix

[Divide By Zero]

Substitute "Netscape" for "Netflix", and "Microsoft" for "Wal-Mart" and your comment seems frighteningly on-target.


And then Wal-Mart starts making DVD players and shipping their DVD players with a subscription to the service, and mucking with the firmware so that DVDs rented from Wal-Mart play better, and then getting the MPAA to add extensions that work only with Wal-Mart players and discs, and then Netflix gets bought by $GIANT_CORP and goes promptly nowhere.

Re:You want to make some SERIOUS money?

[wcbrown]

There's got to be a reason why this hasn't happened:

a) the people who would use that service probably already subscribe to sites on the Net.

b) when the urge strikes you, you probably want immediate gratification.

c) you can almost guarantee an immediate turnover of the rentals (they get it in and probably send it out next day).

d) the cleaning of returned rentals is probably costly. (j/k...maybe)

Re:Wal Mart vs. Microsoft

[Zuke8675309]

It will be good for the consumer because there will be price competition. As it stands now, Netflix has cut down on service and raised prices since they started. In fact, this is EXACTLY the type of service that Wal-Mart should EXCEL at. Wal-Mart is a master of the supply chain, which is the main issue with DVD rental through the mail.

I don't understand the argument against Wal-Mart in regards to small businesses. If Wal-Mart undercut everyone else, pushed small businesses out of business, and then jacked their prices up I could understand the argument. I haven't seen that though, they're always the lowest price. Lowest price is good for consumers. As for the service aspect - I don't need good service to buy rubbermaid, toilet paper, toys, video games, or dvds. I just need/want low price.

The market is self-correcting

[JonTurner]

Not good for the consumer? Rubbish. You act as though aggressive competition guarantees an irrevocable market dominance. It doesn't! As soon as your theoretical future-walmart doesn't meet the consumer's desire for quality+low prices+convenience (something it currently does quite well, mind you) another business can rise up to meet that need.

Give the consumer due credit -- when a company takes it's customer base for granted and acts like a "dinosaur" it loses market share to smaller, more nimble companies that give the customer what they want. The business history books are full of examples (see Sears & Roebuck, K-Mark, IBM, etc.)

Result? Problem solved, unless you simply don't believe that capitalism works.

Re:Selection problems

[HungWeiLo]

That's not true - Americans often censor themselves just fine, thank you very much. Walmart will only put items on their shelves which have a 98% sell-through rate. If it's on the shelves, you bet someone's buying it up pretty quickly. Because of that, I don't think the blame can be squarely put on just Walmart - it's just that Americans in general are vanilla brain dead store-goers.

Re:Thanks, but No Thanks

[Maeryk]

Gee, just what I always wanted! A censored DVD rental company! Sigh. I have lost complete and total respect for Wal-Mart over the years. First they started flexing their muscles to censor the video game industry and made it plain that any video game they didn't like wouldn't be sold by Wal-Mart, thus making game companies cave and self-edit their games. Then they pulled some men's magazines off their shelves that had less female skin than most women's magazines these days. Now they want to start renting out DVDs, which I'm quite sure are censored? Heh, good luck.


YEah! I DEMAND streaming porn on the projector at elementary schools! Who is WalMart to tell us what they will and wont sell! HOW DARE THEY have some morals and make decisions that they feel protect their clientele!

Sheesh.. the NERVE of walmart to think that someone like me may not want my six year old son asking why a mostly naked wrestling chick is on the front cover of STUFF magazine in the checkout line! (Stacy Kiebler.. next month).

Well.. I think I'll take my dollar right down to the local dark wank-in-the-back porn shop to show my outrage! (end sarcastic rant).

Dude.. its their store. They can sell, or not sell, whatever the hell they want. If you dont like it, dont shop there, but dont act like its some crime against humanity that Wal-mart doesnt carry pimply faced teenager prot0-spank material at their registers anymore.

Maeryk

Re:Maybe not such bad news for NetFlix

[MoCycleGeek]

On top of that WalMart has a history of only selling stuff it felt was up to its standards. If they keep up this trend there will be a lot of movies that won't be available from their service that NetFlix offers.

Re:Selection problems

[NineNine]

Yes, they know their customers. But there ARE some things more important than the almighty buck. I run a retail store, and there are plenty of things that I could sell and make a killing on bbut I won't because the products are shit. Wal-Mart will sell anything and everything that they can make money on. I'm picky about what I sell and I still make a decent profit. If their customers wanted pork skins in the shape of Jesus, they'd sell them. I wouldn't.

Re:Wal Mart vs. Microsoft

[Elbows]

The general argument against walmart is this:
They pay their employees shit (as well as busting unions and various other unscrupulous practices), so all of the money that Walmart makes is concentrated in the hands of the owners of the company, who are already filthy rich, as opposed to back into the local community. The result is uneven distribution of wealth, and a weaker local economy (b/c all the money is going elsewhere).

Small businesses, on the other hand, in general pay their employees better, and the owners themselves are local, so basically all of their profit is going back into the local economy. Additionally, since the employees are paid better and the owners are probably not obscenely rich, wealth is distributed more evenly on the whole.

The problem is that, from an individual perspective, it may make sense to shop at wallmart . (Some ppl prefer small stores where they can actually find what they're looking for, but most don't seem to care). But, shopping at walmart damages the community, which in turn hurts the individual -- but in an indirect way, so that the individual doesn't connect the resulting problems back to walmart, and therefore has no reason to stop shopping there.

Re:Limited Market

[athakur999]

True geeks, IMO, would be MORE likely to rent the DVD rather than download it. It's the casual movie watcher that's happy with a badly compressed version off of Kazaa. Geeks want to enjoy their movies in their full 5.1 surround sound/THX/whatever glory on their big screen.

Re:Maybe not such bad news for NetFlix

[RedX]

With a reasonable online presence, which Wal-Mart doesn't have.

They don't? Walmart.com is as functional as Amazon.com or just about any B&M retailer with an online presence. Heck, this DVD rental service is already available on Walmart.com.

Every buy anything from Wal-Mart? OK, Ever buy anything from Wal-Mart online?

Yes, and yes. What's your point? Shopping at walmart.com was as easy as shopping at any other online retailer.

I'm not a big fan of Walmart or their business practices, and their online presence might not be the behemoth that their B&M operations are. But they are the quinissential thousand-pound gorilla, and if they ever decide to focus on marketing their online presence, they'll be very successful. This DVD service might just be the push they need to get the necessary attention.

Re:Competition

[Anonymous Coward]

Why don't you try reading your own links? It says specifically that this only happens in the even that your account is cancelled. It seems reasonable to me that Wal-Mart would expect their discs back on cancellation. As far as I understand, Netflix has a similar policy.

OT, I know. (Re:Maybe not such bad news )

[JamesOfTheDesert]

Netflix at least has a fighting chance, Netscape didn't.

Hard, though, to have sympathy for a company that nicknamed their product "Mosaic Killer", AKA Mozilla.

Microsoft may have fscked a number of companies, but anyone entering a market where people are already giving away their product should not be surprised when somebody else comes in and gives away their product.

Wal-Mart for the masses, Netflix for film buffs...

[aquarian]

Perhaps Wal-Mart will surpass Netflix in total sales, perhaps by many times. However, I see these two companies not competing directly.

Wal-Mart has never been anything but a mass market company, with lowest-common-denominator sensibilities. In any category, *especially* movies and music, they sell a relatively short list of only the most popular, mass market items. Michael Jackson? Sure. The latest college radio, big city hipster fave? Forget it, even if they're selling in the millions.

Netflix, OTOH, has always catered to film buffs. They'll probably lose share to Wal-mart in the most popular releases, but will continue to grow elsewhere. So, if you want "Dumb and Dumber IV," go to Wal-Mart, but if you want the Cannes winners, indie greats, art films or classics, you're more likely to find them at Netflix.

Re:Thanks, but No Thanks

[mattsucks]

Yes, Wallyworld can sell whatever they want, measured against whatever corporate standards of decency they so choose.

But it still saddens me. Here's why, and I've seen this happen over and over and over. Walmart moves in to a community. All the smaller book/record/video/newsstand stores go out of business; they just can't compete. Then all that is left for that community at that point, in an EASILY ACCESSIBLE FORM, is Walmart's definition of "decent".

Yes, I can "shop somewhere else", but what if there IS nowhere else?

Is it legal? I believe it is. Competition == good. It's the American Way (tm). We should all be so lucky.

It is good for the community? I believe it is not.

Also sad is Wallyworld's penchant for pressuring publishers and distributors to modify their books/records/videos/etc before they will stock them. That to me falls solidly in a gray area of legality. Sure, the distributors can go elsewhere if they don't want to edit ... but where the hell else can they go?

Sure I can write a better browser ... but when all that exists is Windows+IE where the hell can I run it?

Re:The only problem for me is...

[angle_slam]

Renting on the spur of the moment does have its advantages. But there are also disadvantages too. For me, the primary disadvantage was planning to see a movie, renting it, then not having time to see it and having to return it unseen.

With Netflix, I keep my queue filled. If me and my wife have free time, we have three movies (give or take mail delays) to choose from and don't have to leave the house. If we don't have time to watch that day, we can keep the movie for as long as we want, until finally returning it. But if we have a free weekend, we can watch all 3 movies, and merely return them by dropping it off in the mailbox at my office. Very convenient.

Plus, Netflix has one huge advantage--selection. Your local Blockbuster doesn't have a shot of having the same selection as Netflix. Not a big deal if you only like mainstream movies. But if you are a fan of independent movies, or older movies, or foreign movies, or music concerts--Netflix is for you.

Re:Maybe not such bad news for NetFlix

[zeno_2]

Companies have been doing this with netflix for a while. I bought a Sony DVD player probably 3 years ago, and it came with 5 free movies from netflix. I hope walmart doesn't make it in this market though, its just another step for them in world domination and I wont stand for it..!

What's so bad about wal-mart?

[donscarletti]

As a non-american who has never seen a wal-mart, let alone shopped at one, my knowledge of the subject comes wholly from the internet. From what I have heard it is a "Redneck superstore" that sells all your supplies like subversive family movies, old time inbread burbon, mullet combs, nigger linchin' rope, crossburning kits and cheap PCs loaded with Linux.

May I ask someone knowledgable on the subject what can be "evil" about a department store, I have personally been to shops that are overpriced, with bad service or crappy goods but never one that is as morally black as I am told wal-mart is, come on! It's just a frigging retailer!

Re:propane tanks

[zogger]

--no it doesn't, it's a net loss. We are running hundreds of billions a year trade balance deficit. We are also at a net loss of over 3 million real jobs over just the past 3 years. Our currency is down over 1/4 against the euro when you run the high/low split. Our unemployment rate is so bad they had to adjust how they count the rate by dropping people who have exhausted unemployment insurance benefits. Some economists estimate the real unemployment might be almost double the official ~ 6% level. They also include people who are only working extremely part time, say a few hours a week, that's classed as fully employed. They dropped food and fuel from the consumer cost of living indices to keep the figures looking good. The recent so called debt figures do not reflect the contractural debt that the government has. They claim we are only at 4.x trillion estimated debt, yet the real figures are closer to 45 trillion, trillion with a T. The fortune 500 companies have almost universally no way to pay for their contractural pension programs, they are busted. Pension insurance last year went into the red from years in the black from only a few companies tapping in to it due to bankruptcy, just a few, with over 38,000 companies still being a part of it and many of which are close to bankruptcy themselves. Most major banks derivatives exposures are so dismal, you'd be hard pressed to see much notice of it in the main broadcast media.

On and on. Walmart is not the sole cause, but it's a wonderful representation of the economic problems over all and what lead to them. If not-manufacturing inside the US was working that great, we would be running a trade surplus, and we aren't. It's a temporary cheap trinket fake out, the bone tossed to keep those still working faked out that their jobs will be safe or something. It's a lie. I KNOW people working at walmart, ALL of them were making more money at their previous jobs, jobs that have poofed in the "new economy", poofed as in not disappeared, but sent elsewhere. The profits aren't going to the people who built these various companies up except at the extreme top levels. It's a universal averaging down.

Sorry, it's sucking in the US and getting worse,well, war factories are doing ok, that's about it.

I can easily remember when a normal even lower middle class blue collar job was more than ample for decent home ownership, supporting a lot of kids, a good car, family vacations and so on. It is NOT that way now. The economy is sliding on the inertia of insane out to lunch credit,outsourcing, selling of assets, it's called in the olden days and warned against "eating your seed corn". It looks like fat city until that seed corn is gone, then you have nothing left to plant. That's a rural reference analogy, I have another I like to use as well. The economy now is akin to a carpenter who on friday night pawns all his tools and his work truck, all weekend long he looks "rich", why look at "that quarters" immense profitability! Comes monday morning he's out of a job. When it's one job like that it's easy to see it's nuts, when a nation does it, with the results being manipulated and shilled from stratospheric levels by the ones who actually profit from it, and the results take a little longer to "trickle down",they call it "good business".

Nutso, there's no proof whatsoever the economy is getting better other than in the snake oil salesmans infomercials. 30 year mortgages for homes and 5 year car notes are no indicator of wealth production and creation, they are the opposite of it in fact, when those same two major asset indicators used to be only 10 years and 18 months respectfully, and not that long ago, and when we were a creditor nation and not a debtor nation, and our trade balances were almost all in our favor. those are indicators of an over all good economy. And even the snake oil salesman have no way to dodge the trade imbalance issue, that's serious folding money you are talking about. If their scheme worked as advertised, we should be seeing an almo