Amazon to Enter the Online DVD Rental Business

ChrisF79 writes "Wired News is reporting that Amazon.com is hiring programmers to work with online dvd rentals. From the article: "Advertising for positions based at the company's Seattle headquarters, the listings seek engineers to help in 'building systems and algorithms that must move inventory between our fulfillment centers and our customers in a way that gives customers exactly what they want, when they want it.' The postings indicate they are specifically for an online DVD rental service." Netflix seems to have a stronghold on the market so despite numerous advantages for Amazon, especially economies of scale, can Amazon enter the market and surpass Netflix?"

Instant gratification

[phpm0nkey]

I was a NetFlix subscriber for about two years, because they were the best of what was around. Recently, I switched to Blockbuster's in-store unlimited rentals, because it could give me something that NetFlix couldn't: instant gratification.

I am fickle. With NetFlix, I too frequently found a DVD in my mailbox that I felt like watching 3 days ago. Being able to pick out a movie and be watching it 20 minutes later really makes a world of difference.

Perhaps NetFlix will go one better. With movie downloads just around the bend [slashdot.org], it appears that they're taking innovation and competition in their industry very seriously. Amazon may have the inventory and distribution architecture to easily catapult themselves into the market, but if they don't have anything more interesting than DVDs-by-mail on the horizon, they may quickly find themselves left behind.

Operation

[superpulpsicle]

When netflix lowered their price in competition with blockbuster, netflix claimed they were in jeopardy of making pennies for profit. The opposite happened and their stock prices went higher.

I am really confused as to whether everybody is still overcharging. Considering everyone has an endless queue list that seem to be sending things out of order again and again. There is still a real supply problem.

Re:Instant gratification

[Ingolfke]

I was a Blockbuster subscriber... but after a year (and the dreck that's been coming out of Hollywood) I ran out of movies to watch. I wish they'd stock more TV shows (new and old).

If Blockbuster could work out a deal w/ the movie industry to burn the DVDs onsite so they could have all the benefits of an unlimited DVD inventory and all the convenience of 20 minute turn around times, I think they'd really hurt NetFlix & Amazon's business.

Combination with shipping

[Blindman]

The way that Amazon could really gain an advantage is if they could find a way to combine buying other items with DVD rental. If I could buy a book, and get it shipped free with my incoming DVD that would be something. Otherwise, I don't see how they can compete except on price or name regonition.

Too Late?

[canolecaptain]

With the deployment of the XBox 360 in mass quantities in '06, content producers will have the ability to content lock their movies. Microsoft will finally be able to promise that security to media execs, which will then loosen them up enough to allow the streaming to occur. When that desire is coupled with the increased availability of broadband, the on-demand downloading will finally go mainstream with Microsoft attempting to lead the way. Others in this market will be Apple with iVideo, potentially Sony on the PS3, and potentially juggernaut Google to the PC.
Unless Amazon can couple the download with the the DVD rental (both will be necessary), they will be too late to be of consequence. My guess is that Netflix, Intelliflix, and Blockbuster will all begin on demand downloads by the end of next year.

Re:Advantage: Amazon

[joebok]

I don't know if they have a "clear advantage" - NetFlix has a lot of name recognition and customer loyalty. My experience has been great, as have the experiences of everyone I know - very easy to use and excellent customer service. "NetFlix" is practically synonomous with "on-line DVD rental".

A contender has a lot to accomplish to get to that level I think.

Re:Internet users are very versatile

[spidereyes]

Well Blockbuster price is lower so your statement isn't entirely correct. I've used both services for about a year. Netflix was incredibly smooth and I received movies very fast for the area I lived in. They have a lot of movies that I couldn't find in the brick and mortar stores. So I agree their service was second to none. I decided to save a few bucks and try Blockbuster. These guy's took a week to mail me my DVDs and were ALWAYS out of the movies I wanted to see. Then they would constantly get lost in the mail and the hassle wasn't worth the $3 savings. Secondly, I wanted to use a free rental, but didn't have the coupon on me. I asked the clerk if they could just look up my account. Of course their system isn't that smart and they consider it a totaly different entity. The next time I go in (with the coupon) and they ask me to sign-up for a card and everything. I decline and he turns me down for renting the video. I explain to him I have an online account and why do I need to sign-up for yet another account. I mean really how many things do I have to sign-up for to rent Kids? Because I'm a cheap bastard I was lulled into trying Blockbuster, but 4 weeks later I was happy again with my Netflix subscription. The old adage still goes, "You get what you pay for."

Re:News?

[pdbaby]

Because the US is much larger than the UK or Germany, I'm guessing. That means stock's moving greater distances which means that moving it's more expensive which means you need to optimise movement and placement up the wazoo

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Rocket Fueled Video Addiction. . !

[Fantastic Lad]

Wow. To get full value from my $17.99 per month subscription, I have to force feed myself a minimum of three movies a month forever! Stress! ArgH! Must visit website. Mst watch moveiss. . . Hlp. Where did I put that return envelope. Go out tonight with friends? Can't! Must watch movies! What's good? Who cares! Must make minimum allotment or face vague penalty of paying weird premium for weird disk in mail service.

Okay.

To be fair, the Netflix model sounds like a pretty good deal for people whose lives happen to circulate around watching lots and lots of movies. I've been there, and it can be a lot of fun when you're in that head-space.

But for me, it sounds like WAY too much trouble. --Like working for a company which gives you a pager and has you on-call 24/7. Knowing that I MUST watch 3 movies at some point during the month seems very stressful to me. I'd rather be able to get a movie when I feel like it and not feel that it is yet another item on my To Do list.

I can happily go for a couple of months without ever watching a DVD, and then I'll blow several nights in a row consuming something which catches my interest, (like the ill-fated Bruce Campbell TV Western series, "Brisco County Jr." --Which was unbelievably cool, but is only available from my friend who downloaded pirate copies from the web and burned them to disk for me because the series was never officially released.). --And then I'll happily watch nothing for another three months.

Perhaps Netflix could offer non-member limited rental packages with no deadlines on some of those funky single-use disks. --Subscriptions bother me. I don't like feeling 'obligated' to do anything, particularly with regard to my free time activities. Though, it seems to me that the rent-a-DVD-by-mail business model depends rather heavily on the various forms of psychological momentum subscriptions create, so I somehow doubt short term purchases will come about.

-FL

Re:Too Late?

[hackstraw]

With the deployment of the XBox 360 in mass quantities in '06, content producers will have the ability to content lock their movies. Microsoft will finally be able to promise that security to media execs...

Let's think. Target age of an XBox is between teenager to twenty something geek male. Basically, a high percentage of the people that comment on posts like:

http://games.slashdot.org/article.pl?sid=05/08/03/ 148257&from=rss [slashdot.org]

These are the same people that are already more likely to be computer literate and steal, borrow, infringe, or whatever you want to call obtaining copyrighted material without paying for it.

These are the same people that repeatedly say that $300 is too much for a game console and $60 per game is too much also.

I would assume that the target audience that Amazon is trying to attract would be somewhat different for their movie service. I could be wrong though.

The Zero-Cost solution

[TopShelf]

My wife and I have recently hit on a great, free source of DVD's - the Library. For those who haven't been there in a while, check out your local branch and you might be surprised at what's available. We just picked up Donnie Darko, Kinsey, and Lost in Translation the other day. Since we take the kids there once a week to pick up kid's movies and books, we grab a couple for ourselves and when you're on a tight budget, free entertainment is a major bonus...

What Amazon Needs: Customer Service

[precogpunk]

This has been said before but Amazon has a recommendation engine that's light years ahead of what Netflix has. I've been an Amazon customer for longer, have bought more product from them, and so has everyone else. Even after rating 300 movies and reviewing several Netflix makes the stupidest movie recommendations while Amazon prove insightful most of the time.

Amazon has the distribution, but also the ability to cross-sell a lot more than Netflix. It's probably a lot easier for them to sell you the movie if you rent it and like it. They have better promotional opportunities, like including free rental coupons if you buy DVDs.

The one thing Amazon doesn't have going for it is customer service. Have you ever had a problem with your order? One time someone sent me a gift from my wish list, they could not select the address it was shipped to, and it got lost. It was a complete headache trying to resolve the issue and contact their customer support. Netflix, on the other hand, has amazed me with how good their service is. One time I sent my own DVD back instead of the rental, so I emailed them, and they managed to find it and mail it back to me a couple of weeks later. I also had a real, live, human who answered the email. Unless Amazon shows improvement I'll be sticking with Netflix.