Netflix May Already Be Killing Blockbuster?

Mattintosh writes "A blogger at C|Net takes a moment to consider the impact Netflix has had on Blockbuster. Some notable highlights include heavy losses ($35 million), job cuts ($45 million worth), and store closings: 'Much like the print media and retail stores refusing to change, Blockbuster has been a victim on an online company finding new and inventive ways of bringing a product to a customer. And due to its size and outdated corporate culture, there really is no salvation for Blockbuster at this point. Try as it might, the future of Blockbuster is bleak, at best. Sure, the company still enjoys revenue that climb into the billions of dollars, but with an ever-increasing net loss and a public refusal to focus on Total Access--the area where Netflix continues to dominate--what is the impetus for us to jump on the Blockbuster bandwagon?'"

Blockbuster lost my business

[philmack]

Blockbuster lost me (and several of my friends' accounts) to netflix when they recently did away with their in store exchanges unless you opted to pay like 30% more for the exact same service. I have to imagine that a lot of people did the same.

Re:My only problem with neflix

[pappy97]

cafedvd.com offers the service you want, you rent by mail per DVD you actually watch, no subscription. Check it out. They call it "a la carte" renting.

It would not be hard to beat netflix on-line...

[(H)elix1]

I'm a netflix cusomter - 4 CD's in three queues (child, bride, me). As a perk, they also let you have an hour/usd of streaming content each month. For me, that works out to ~24 hours a month. Great, right? Well, it only works in the States, so any gigs in Canada are right out.

The chink in the armor is the selection. While they have a massive collection of DVDs, the streaming selection is really poor. I would not pay extra for it as it stands. At home, It looks about the same as a DVD on a high bandwidth connection - here [multiply.com] for example, is a movie getting piped to a TV via my laptop. Bandwidth in hotels works better than I expected, and it is good enough for watching on a computer. I hear Blockbuster might have better selection... they should embrace the streaming!

NO WAI!

[sqrt(2)]

Who could have seen that coming. Netflix is even more convenient (for me) than downloading movies illegally, there's just no way a dinosaur like Blockbuster could keep up. By not actually having a physical location, Netflix can have a MUCH wider selection of titles too, and when your only limit is how many movies you can have out at one time you can watch a lot more content and take chances on things you might not have looked at otherwise. This is why I have no sympathy for the music industry when they say they can't compete with illegal downloads. Netflix does it (and does very well), by offering a better service at a reasonable price.

Re:Damn

[torkus]

I guess that's the preference it comes down to. Do you like to go to the store and trade your movies or do you like to drop them in the mail and get the next one (or batch) in 2 days?

I'll stuff 8 DVDs in my mailbox monday and have the next 8 from my queue on wednesday. For me, that's perfect. I'm not sure what you don't find in Netflix's catalog, but i've found everything i've gone looking for. THey even have obscure things like random yoga videos, foreign and B movies...

Other alternatives:

[Chabil Ha']

I rent my videos from Redbox.com [redbox.com]. I don't rent enough movies to really justify spending on a Netflix subscription and the idea of depending $4.50 on a DVD rental is absolutely preposterous. For $1 + tax I get to watch a DVD--a just price for someone who watches movies as infrequently as I do.

...and no, it doesn't run Linux...but it could.

They have a grandfather clause

[Honor]

I've had Blockbuster Total Access since right before they started the in-store exchanges. Which I love, by the way - I get to watch the movies I can't get in store, and when I want to rent a movie last-minute, all I have to do is take the envelope into the store and get any rental for free. They even give out a coupon every month for a free in-store rental - or a free game rental, which is what I always use it on. But anyway... When Blockbuster started limiting the number of in-store rentals, it was for new customers only. I got a nice letter from them saying hey, we are upping our prices, and putting a limit on in-store rentals, but since you already had an account with us, your price doesn't go up and you get to keep your unlimited rentals. So anyway, thats why I like Blockbuster over Netflix, and why the parent poster should have kept his/her account, since it wasn't affected by the new policy.

Corporate vs. Franchise

[JimboFBX]

Back in Pullman, WA, I found blockbuster online really helpful. Everything about it was great, and the fact that NetFlix told me Star Trek V (for RiffTrax) was "soon available" and then a week passed without ever sending it didn't help NetFlix's case either. Then I moved to a larger city where all of the blockbusters were franchise within a 100 miles. Their "two night rental" was actually a "next day rental", they had late fees, they stopped accepting blockbuster online's coupons for free game rentals (7.50 to rent a game...), when I did have a free rental coupon, they wouldn't allow me to write down the code and simply present that to them- I had to print it out as well, and finally their selection was worse. When I asked why they were so crappy, they answered "Sorry, you probably were renting from a corporate blockbuster- and all the ones around here are franchise". I quickly canceled my blockbuster online subscription, mostly because I could no longer get a free game rental and because Red Box ($1/night) has come around and proven to both be superior to Blockbuster and Netflix when your primary interest is new releases.

Sadly, within two weeks of showing up, Red Box put the local Movie Gallery out of business, which had been my blockbuster replacement for games. Now I'm not sure where to rent games anymore.

Re:Thank Big Tel/Cable

[frdmfghtr]

Can someone please explain to me why you are willing to pay astronomical monthly fees for Netflix on a recurring basis and you might not even get your #1 choices? I just don't understand how the business model survives.

Sure...because for $9/month (astronomical?? I think not), I can get a movie (have always been able to get my #1 picks so far) in my mailbox for an unlimited amount of time, drop it in the mail when I'm done, and four days later have another one in my mailbox. I don't have to stop anywhere, I can browse online, AND if I come across a movie I want to watch and it's available to stream, I can watch it instantly (assuming I have Windows; my Mac is thus far not supported). Nine hours (I think) of streaming per month is included in that $9 monthly fee.

On top of that, when my monthly fee dropped from $9.99 to $8.99, I had to do nothing; my monthly rate automatically went down.

Seems pretty fair to me.

Re:Thank Big Tel/Cable

[robbiedo]

You can stream movies to your PC. It is pretty cool. Only works with Windows and Internet Explorer right now, but you basically get 1 free hour of streaming per each dollar of your monthly fee. Spend 18 dollars get 18 hours streamed. Quality is nice on a PC screen.

This is not that hard

[wuputah]

Here is an example timeline of the "No late fees" feature:

* You rent a movie January 1.
* It is due January 8th.
* If you don't return it by January 15th, they assume you are keeping it forever. You get charged the price of the movie.
* If you return it before February 15th, the price of the movie is refunded and you are charged a $1.95 restocking fee.

They make this completely clear when their automated system calls you about your movie being overdue.

I still don't think this lives up to "no late fees," but as they used to charge $4/night for late fees, it could be a lot worse.

(PS. Where is the textile markup option for Slashdot?)

why netflix

[Dare nMc]

I go to the local grocery store and up to their DVD kiosk and rent a movie for 24 hours at 1.05

definitely live in a different area than me. Kiosk at my safeway has under 30 movies, and most are around $3-4. pre netflix I watched 3-4 a month, and had watched every movie I was interested in (that was available) a few years back.

Netflix has a great site, I have rented 300 movies in the last 2 years, and I have 50 movies in my queue. The site has no problem finding new (to me) movies. No more wondering rental stores, or hanging out at a kiosk daily. monthly I visit netflix.com, and imdb.com in seperate tabs, 1 hour max to top off a new list of movies for us. To do anything equivalent at a remote site would require printing the results of the same browsing, and printing the queue, and then hunting for which of them are their.

Re:Needless to say...

[Anonymous Coward]

The assertation that movie studios see fewer dollars as a result of fewer rental copies being purchased is incorrect. Rental companies are charged different fees than consumers - I believe it's typically around $5.00 per disc for a rental DVD of a major Hollywood film, which really isn't too far off from the accumulated costs of materials, production, shipping and handling. In return for this deal, the film studios are offered a percentage of the profits from rental fees. This is infinitely better than the VHS rental licensing scheme, since replacement media can be had for extremely cheap.

This is also an extremely lucrative source of income for Blockbuster, since they are allowed to sell used rental product for (initially) very near the full retail cost of the movie and none of this money is sent back to the film studios. Extremely low-margin and low-risk, which is also why you'll get the till jockeys shoving it down your throat when you're too lazy to drive to Walmart to save a few bucks on a new DVD.

Netflix over blockbuster for me

[Anonymous Coward]

About a year ago we decided to give the online rental thing a try. I signed us up for Blockbuster and Netflix because they both offered a free month to try the service. Twice the movies and I knew I'd be cancelling one, so that was nice.

Anyway, Blockbuster had the edge in the "return to the local store" policy, but of the dozen or so movies we put in our queue, about half were unavailable through Blockbuster. All were available through Netflix. So I decided we would, for the time being, stick with Netflix.

When I cancelled the Blockbuster account, they requested that I explain why I was cancelling. That's fine with me, because if Blockbuster improved their availability, I figured I could switch over. I spent some time putting together a good explanation of why I chose not to do Blockbuster and what they could do to get me to give them another chance. I figured if anyone read those things, they'd appreciate some good feedback.

Well, I hit sumbit, and got a lovely error message: "Please limit your comments to 255 characters."

That did it. I had spent time trying to help Blockbuster understand what they could do to get me as a customer, and I run into a (heretofore unmentioned) limit in how much text I could send. The limit itself was stupid enough (really? 255 bytes is all you're going to spare?) but after I wasted my time writing something for their benefit I decided they could rot in hell.

Netflix has been just fine for me and they've lowered the price a couple times. I wouldn't have gone to Blockbuster regardless, but the price cut is nice anyhow.

Re:Thank Big Tel/Cable

[evilviper]

When I go to Netflix I see "Watch movies instantly on your PC". Did I miss something?

Yes you did... Try actually USING the service. Whatever they're using does a HORRIBLE job with the conversion from DVD.

Lots of aliasing, like they use some incredibly crappy deinterlacing filter. The video is scaled out to square pixels, even though WMV supports aspects just fine. Anyone who knows one bit about video encoding will force dimensions to multiples of 16, but the videos I've seen aren't even multiples of 4... huge waste of bits. And that, unfortunately, holds true... don't even try watching at any bitrate below the max (some 6000kbps), even with a file size of 2GBs it looks like a 1-CD rip you might find floating around on some P2P network.

Their inverse telecine filter is crap, if it exists at all. Progressive DVDs (film) are encoded passably, but anime I've seen is HORRIBLE. Take Ninja Scroll, use some braindead deinterlacing filter that blurs the two fields, so you have the old telecine ghosts every 5th frame and it looks like complete crap... then drop one out of every 5 frames (but be sure to keep the horrible blurred frames) to make sure you completely destroy the picture... then you've just started to approximate what the Netflix conversion process does.

Re:Damn

[Deliri...uhmmm]

http://www.netflixforporn.com/ [netflixforporn.com] Here's the pr0n version.

Re:Neither is good enough

[Anonymous Coward]

If the foreign movies you talk about were available in Region 1 DVDs, meaning they would play on DVD players in the US, then Netflix would have them. But many foreign movies, French movies especially, have never been released in the US and haven't even been subtitled so they could be released. Don't blame Netflix. Unless you have a region-free DVD player most foreign DVDs won't be playable here and it would be a nightmare for Netflix to carry them and then try to explain to people why they wouldn't play.

Instead, get eMule and a good net connection and you will have access to a whole new world of foreign movies. Even more than Netflix (which I subscribe to) the ability to get rare and foreign movies via p2p is one of the wonders of the Internet age.

Rental replacement cost

[CustomDesigned]

Media companies charge more for rental copies - usually over $100. So $135 for replacement cost was very likely accurate (although perhaps they should have prorated it since they have to replace worn copies). I don't know if rental copies are specially marked. If not, you could have bought a personal copy and offered it as the replacement.

Re:Some companies deserve to die.

[onx]

What you say is wrong. They did get rid of late fees, and it's a lot cheaper for the consumer. Instead of charging you the price to rent the item if you exceed the rental period ($5 on a two day rental, so if you keep it for a week you pay $5 to rent it and then $15 in late fees) what they do is after the rental period, and a grace period (of at least 6 days on everything) they charge the price of the item to your account (which means it charges to whatever credit card you have linked to your account). If you then bring it back in time (within 30 days of the charge date) they refund the price of the item up to $1.25 which they call a "restocking fee".

Now you can bitch and moan about restocking fees all you want, but to say that $1.25 for an extra 30 days costs you more than $5 for an extra 2 days is completely ridiculous. Yes, the old draconian LackLuster late fee model was pure evil; they were afraid of losing a huge chunk of their business due to Netflix (and a general hatred of Blockbuster), and as a result they replaced it.

The one thing that might still be pure evil about their new model is that if you don't return a disc from a TV series, they charge you for the price of the whole series. For example if you don't return disc 1 of "Band of Brothers" they charge you a ridiculous $80, which to be fair is the actual price of the band of brothers box set. However, recently they seem to have shifted away even from this...it seems now the most they will charge you for a disc not returned for a TV show is $10 (although I think this only applies to TV shows they got on DVD in the last few months, so heroes will only cost you $10, but BoB will still be $80).

Blockbuster's real problem though, is that its inventory system was designed by a 3 year old, and their computer system was designed in the '80s (literally). The new CEO promised that he would fix the inventory system so that stores in the Midwest wouldn't get 500 copies of "Brokeback Mountain" while a store in San Fransisco would get only 50 copies. When you ask the guy behind the counter at Blockbuster if they have a movie...he can't tell you with any reasonable certainty. Once he finally navigates the computer system that is older than he is to find what you were asking for, only to see that his store doesn't carry it, he has absolutely no way to find out if a nearby store has it without calling them and having them repeat the process. He also can't tell you if they carry it online. What can he do if they "might" have it? Help you look...and a good portion of the time he wont be able to find it even if it should be in stock. There are so many other things wrong with Blockbuster it's amazing, but the summary was right on when it said they seem unlikely to change significantly.