Comments on: Blockbuster vs. Netflix: The DVD Death Match http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/ Trusted Insights and Conversations on the Next Wave of Technology Thu, 26 Nov 2009 06:47:41 +0000 http://wordpress.com/ hourly 1 By: Netflix: Two Billion DVDs Served http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-935488 Netflix: Two Billion DVDs Served Thu, 02 Apr 2009 07:01:38 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-935488 <p>[...] Om Malik | Thursday, April 2, 2009 | 12:00 AM PT | 0 comments I was still working at Forbes.com when Los Gatos, Calif.-based Netflix started shipping DVDs via US postal service. Later, when I moved to San Francisco for the first time, like Webvan, it became and indispensable service, for there was little time for me to visit Blockbuster. In the ten years that have passed, I moved back to New York, moved back to San Francisco, changed jobs twice and started my own company. Blockbuster is on the ropes. [...]</p> [...] Om Malik | Thursday, April 2, 2009 | 12:00 AM PT | 0 comments I was still working at Forbes.com when Los Gatos, Calif.-based Netflix started shipping DVDs via US postal service. Later, when I moved to San Francisco for the first time, like Webvan, it became and indispensable service, for there was little time for me to visit Blockbuster. In the ten years that have passed, I moved back to New York, moved back to San Francisco, changed jobs twice and started my own company. Blockbuster is on the ropes. [...]

]]> By: Patricia http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-469933 Patricia Wed, 22 Aug 2007 07:59:12 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-469933 <p>I have been a Netflix subscriber for less than a year, but have been exceptionally pleased with the service, easy to navigate web site and the customer reviews. I did consider moving to Blockbuster a couple of months ago, enticed by the Total Access deal. However, in the last 90 days, Blockbuster has closed numerous stores in my are (southern California). That sealed the deal to stay with Netflix for me. What's the attraction of being able to return dvds to the store and get a free in store rental if there aren't any stores in the area?</p> <p>With the huge amount of retail rental expense that Blockbuster is facing, I believe these store closings will accelerate. With fewer retail locations, their program's one advantage over Netflix will disappear. If I were an investor I would have to agree with Mr. Kelleher. In the long run, assuming no management missteps, Netflix is the stronger company.</p> I have been a Netflix subscriber for less than a year, but have been exceptionally pleased with the service, easy to navigate web site and the customer reviews. I did consider moving to Blockbuster a couple of months ago, enticed by the Total Access deal. However, in the last 90 days, Blockbuster has closed numerous stores in my are (southern California). That sealed the deal to stay with Netflix for me. What’s the attraction of being able to return dvds to the store and get a free in store rental if there aren’t any stores in the area?

With the huge amount of retail rental expense that Blockbuster is facing, I believe these store closings will accelerate. With fewer retail locations, their program’s one advantage over Netflix will disappear. If I were an investor I would have to agree with Mr. Kelleher. In the long run, assuming no management missteps, Netflix is the stronger company.

]]> By: jack http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-459471 jack Sat, 18 Aug 2007 13:54:23 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-459471 <p>I use both services (3 DVDs at a time), for more movies. I post long wait movies on top of each queue, and cancel the one not mailed. Turnaround by mail is the same for both (2-3 days). Netflix is closed Saturday, Blockbuster isn't. And Netflix ignores Friday returns (essentially closed).</p> <p>Netflix-open-4-days vs Blockbuster-open-6-days...Blockbuster WINS!</p> I use both services (3 DVDs at a time), for more movies. I post long wait movies on top of each queue, and cancel the one not mailed. Turnaround by mail is the same for both (2-3 days). Netflix is closed Saturday, Blockbuster isn’t. And Netflix ignores Friday returns (essentially closed).

Netflix-open-4-days vs Blockbuster-open-6-days…Blockbuster WINS!

]]> By: Darayush Mistry http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-447203 Darayush Mistry Tue, 14 Aug 2007 06:45:59 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-447203 <p>Very interesting blog. It does the usual Netflix/Blockbuster financial dissection.</p> <p>What I dont get as a customer right now is why should I be bothered with this. If we get the movies on time and they are the same movies we can get from either service, why not go for the Blockbuster flexibility of in store return/exchange. If BB goes bust supporting this model, or Watch Online from Netflix goes straight to my TV or set top box, or Netflix slashes prices by 50% then I will gladly go back to Netflix .. no vested interests, loyalty or philosophical hangups here with Blockbuster. But for right now give me a good reason why we wouldnt go with BB.</p> <p>http://netflixblockbuster.blogspot.com/</p> Very interesting blog. It does the usual Netflix/Blockbuster financial dissection.

What I dont get as a customer right now is why should I be bothered with this. If we get the movies on time and they are the same movies we can get from either service, why not go for the Blockbuster flexibility of in store return/exchange. If BB goes bust supporting this model, or Watch Online from Netflix goes straight to my TV or set top box, or Netflix slashes prices by 50% then I will gladly go back to Netflix .. no vested interests, loyalty or philosophical hangups here with Blockbuster. But for right now give me a good reason why we wouldnt go with BB.

http://netflixblockbuster.blogspot.com/

]]> By: NewTeeVee Blockbuster Inks Movielink Deal « http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-430732 NewTeeVee Blockbuster Inks Movielink Deal « Thu, 09 Aug 2007 03:50:06 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-430732 <p>[...] The move also counters Netflix’ efforts to offer video on demand. Blockbuster and Netflix have been locked in competition since Blockbuster introduced a mail-order rental service, and the two companies have managed to drive down the price of DVDs and rentals. [...]</p> [...] The move also counters Netflix’ efforts to offer video on demand. Blockbuster and Netflix have been locked in competition since Blockbuster introduced a mail-order rental service, and the two companies have managed to drive down the price of DVDs and rentals. [...]

]]> By: Doug http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-430699 Doug Thu, 09 Aug 2007 03:32:06 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-430699 <p>I did Netflix, now do Blockbuster simply because they throw in a free game rental each month and I don't usually watch that many movies. It might be worth mentioning that the game feature is a real selling point for Blockbuster and has turned me from a "hater" to a lover of Blockbuster. Also, they do turn some extra revenue when I ALWAYS seem to forget to bring disks back on time.</p> I did Netflix, now do Blockbuster simply because they throw in a free game rental each month and I don’t usually watch that many movies. It might be worth mentioning that the game feature is a real selling point for Blockbuster and has turned me from a “hater” to a lover of Blockbuster. Also, they do turn some extra revenue when I ALWAYS seem to forget to bring disks back on time.

]]> By: Mary http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-423487 Mary Mon, 06 Aug 2007 20:23:25 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-423487 <p>Have been with Netflix for years and very happy until lately some "very long waits" have been much too long. When I was able to get one of those at the local Blockbuster store, I began to consider BB. Have their free trial now but Netflix will probably win as the turnaround by mail is so much faster. If I mail a DVD back on Tuesday I usually have the next one from Netflix on Thursday. Mailing one to BB on Tuesday results in a Saturday DVD arriving here. I can't be bothered to return them to the store -- I started Netflix to avoid that! Blockbuster does have a customer service that does respond and that is nice, but I've never had problems with Netflix, except for the long waits, that I'd need customer service for. Netflix is also much more user friendly for me with its graphics and organization of information.</p> Have been with Netflix for years and very happy until lately some “very long waits” have been much too long. When I was able to get one of those at the local Blockbuster store, I began to consider BB. Have their free trial now but Netflix will probably win as the turnaround by mail is so much faster. If I mail a DVD back on Tuesday I usually have the next one from Netflix on Thursday. Mailing one to BB on Tuesday results in a Saturday DVD arriving here. I can’t be bothered to return them to the store — I started Netflix to avoid that! Blockbuster does have a customer service that does respond and that is nice, but I’ve never had problems with Netflix, except for the long waits, that I’d need customer service for. Netflix is also much more user friendly for me with its graphics and organization of information.

]]> By: WildBlueSkies » Online DVD rental scenario in India http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-409761 WildBlueSkies » Online DVD rental scenario in India Thu, 02 Aug 2007 18:38:50 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-409761 <p>[...] reads: Blockbuster vs. Netflix: The DVD Death Match Seventymm, India’s [...]</p> [...] reads: Blockbuster vs. Netflix: The DVD Death Match Seventymm, India’s [...]

]]> By: Mike Steinbaugh http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-409530 Mike Steinbaugh Thu, 02 Aug 2007 16:57:25 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-409530 <blockquote> <p>Netflix has streamed more than 5 million movies this year. Now let’s say I watch an average of 8 DVDs a month on Netflix’s (recently lowered) $13.99 a month plan. That’s $1.75 per movie. And at 5 million free movies, that’s nearly $9 million lost over two quarters. And since Netflix ate the costs of those free movies, most of that $9 million would go directly to profits, split over two quarters.</p> <p>For simplicity’s sake, let’s add $4.5 million to the first quarter of 2007. That raises the EPS from 14 cents to 20 cents. In the second quarter, the same adjustment raises the EPS from 33 cents to 39 cents a share. That’s a lot of money that Netflix could have theoretically made, but didn’t.</p> </blockquote> <p>The math behind that statement is wrong. You may rent 8 DVDs a month from Netflix, but the number is limited by how many are shipped to your house during that period. If you watch a movie on demand from their site, you will have watched 9 movies that month. Netflix does not "eat the cost" of the free movie. Netflix only pays for the bandwidth. So $9 million in lost profits is completely inaccurate.</p>

Netflix has streamed more than 5 million movies this year. Now let’s say I watch an average of 8 DVDs a month on Netflix’s (recently lowered) $13.99 a month plan. That’s $1.75 per movie. And at 5 million free movies, that’s nearly $9 million lost over two quarters. And since Netflix ate the costs of those free movies, most of that $9 million would go directly to profits, split over two quarters.

For simplicity’s sake, let’s add $4.5 million to the first quarter of 2007. That raises the EPS from 14 cents to 20 cents. In the second quarter, the same adjustment raises the EPS from 33 cents to 39 cents a share. That’s a lot of money that Netflix could have theoretically made, but didn’t.

The math behind that statement is wrong. You may rent 8 DVDs a month from Netflix, but the number is limited by how many are shipped to your house during that period. If you watch a movie on demand from their site, you will have watched 9 movies that month. Netflix does not “eat the cost” of the free movie. Netflix only pays for the bandwidth. So $9 million in lost profits is completely inaccurate.

]]> By: Mark W http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-409174 Mark W Thu, 02 Aug 2007 14:13:22 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-409174 <p>I use Netflix, and I like it a lot. I find myself taking a long time to return movies, though, because I hate having to find a drop box to put them in. I like Netflix's selection, though. I am sure Blockbuster's selection(especially the in-store selection) leaves a lot to be desired. I used to work at a Blockbuster a long, long time ago, and I always thought it was funny how there were so many movies Blockbuster could not carry because they were too racy. I like the idea of Netflix's Watch Now, but I haven't found any movies that I want to watch in that category. The movies I want to see are only available through the mail. Also, I don't like watching movies on my computer. I would much rather it be on my TV. The company that can provide every movie ever made through a cable and onto your TV will win the battle.</p> I use Netflix, and I like it a lot. I find myself taking a long time to return movies, though, because I hate having to find a drop box to put them in. I like Netflix’s selection, though. I am sure Blockbuster’s selection(especially the in-store selection) leaves a lot to be desired. I used to work at a Blockbuster a long, long time ago, and I always thought it was funny how there were so many movies Blockbuster could not carry because they were too racy. I like the idea of Netflix’s Watch Now, but I haven’t found any movies that I want to watch in that category. The movies I want to see are only available through the mail. Also, I don’t like watching movies on my computer. I would much rather it be on my TV. The company that can provide every movie ever made through a cable and onto your TV will win the battle.

]]> By: David Mackey http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-407520 David Mackey Thu, 02 Aug 2007 02:46:50 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-407520 <p>I use Blockbuster Total Access. Netflix never could get the DVD's to me at my old apartment. I moved away from any delivery service for a while and just used Vongo/Movielink/iTunes for a while, but then moved back to Blockbuster when they created the Total Access program. I think the future is in streaming movies. Who wants to go to a video store or wait for movies to arrive?</p> I use Blockbuster Total Access. Netflix never could get the DVD’s to me at my old apartment. I moved away from any delivery service for a while and just used Vongo/Movielink/iTunes for a while, but then moved back to Blockbuster when they created the Total Access program. I think the future is in streaming movies. Who wants to go to a video store or wait for movies to arrive?

]]> By: Stirrdup Trackback http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-405649 Stirrdup Trackback Wed, 01 Aug 2007 14:14:13 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-405649 <p><strong>Blockbuster vs. Netflix: The DVD Death Match</strong></p> <p>This story has been submitted to Stirrdup. Your support can help it become hot.</p> Blockbuster vs. Netflix: The DVD Death Match

This story has been submitted to Stirrdup. Your support can help it become hot.

]]> By: Ray Jones http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-404547 Ray Jones Wed, 01 Aug 2007 07:14:29 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-404547 <p>Blockbuster USA should take a look at the Australian designed system (by Mobilesoft Ltd) currently being trialed by Video Ezy who have bought the Blockbuster franchise in Australia. It allows for very fast downloads of movies (up to 40) onto memory sticks/ IPods etc that are taken home and loaded onto a Home Media Centre incorporating a digital tuner, PVR hard drive and charged only when, or if, viewed through your TV. Stores shrink significantly (less rent) , much less staff, no returns, no late fees, no bad debts, no damaged disks, no telephone calls to remind or chase up clients. They can also be downloaded via ATM style kiosks at gas stations, bus depots etc.</p> Blockbuster USA should take a look at the Australian designed system (by Mobilesoft Ltd) currently being trialed by Video Ezy who have bought the Blockbuster franchise in Australia. It allows for very fast downloads of movies (up to 40) onto memory sticks/ IPods etc that are taken home and loaded onto a Home Media Centre incorporating a digital tuner, PVR hard drive and charged only when, or if, viewed through your TV. Stores shrink significantly (less rent) , much less staff, no returns, no late fees, no bad debts, no damaged disks, no telephone calls to remind or chase up clients. They can also be downloaded via ATM style kiosks at gas stations, bus depots etc.

]]> By: Kevin Kelleher http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-404214 Kevin Kelleher Wed, 01 Aug 2007 05:18:45 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-404214 <p>Watch Now movies would be much cheaper for Netflix than mailing out DVDs, which may be the company's ultimate aim. But that would only be the case if it used Watch Now instead of mailing out DVDs. But it's not doing that. It's offering Watch Now in addition to the mailed DVDs you pay for in a subscription.</p> <p>I've been using Watch Now and it hasn't reduced the number of DVDs I order from Netflix in a given month. I'm just watching more movies. But Netflix isn't making more money from me or, I imagine, most other customers using Watch Now. If I did find myself having fewer DVDs shipped each month, I would downgrade to a cheaper subscription, which would also cause Netflix to lose money.</p> Watch Now movies would be much cheaper for Netflix than mailing out DVDs, which may be the company’s ultimate aim. But that would only be the case if it used Watch Now instead of mailing out DVDs. But it’s not doing that. It’s offering Watch Now in addition to the mailed DVDs you pay for in a subscription.

I’ve been using Watch Now and it hasn’t reduced the number of DVDs I order from Netflix in a given month. I’m just watching more movies. But Netflix isn’t making more money from me or, I imagine, most other customers using Watch Now. If I did find myself having fewer DVDs shipped each month, I would downgrade to a cheaper subscription, which would also cause Netflix to lose money.

]]> By: Kevin Price http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-403759 Kevin Price Wed, 01 Aug 2007 02:27:29 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-403759 <p>I discussed this at my blog, www.BizPlusBlog.com. It appears many Kevin's are interested in this topic. I believe this will be a huge battle. It certainly is fun to watch.</p> I discussed this at my blog, http://www.BizPlusBlog.com. It appears many Kevin’s are interested in this topic. I believe this will be a huge battle. It certainly is fun to watch.

]]> By: PR Ganapathy http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-403188 PR Ganapathy Tue, 31 Jul 2007 22:35:29 +0000 http://gigaom.com/2007/07/31/blockbuster-vs-netflix-the-dvd-death-match/#comment-403188 <p>I didn't understand your comment:</p> <p>"... That’s $1.75 per movie. And at 5 million free movies, that’s nearly $9 million lost over two quarters. And since Netflix ate the costs of those free movies, most of that $9 million would go directly to profits, split over two quarters."</p> <p>A user doesn't get charged per movie; in fact Netflix might <em>save</em> money on shipping and handling charges for each movie a user sees on "View it now" vs. on DVD, isn't it?</p> I didn’t understand your comment:

“… That’s $1.75 per movie. And at 5 million free movies, that’s nearly $9 million lost over two quarters. And since Netflix ate the costs of those free movies, most of that $9 million would go directly to profits, split over two quarters.”

A user doesn’t get charged per movie; in fact Netflix might save money on shipping and handling charges for each movie a user sees on “View it now” vs. on DVD, isn’t it?

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