Interesting news today that Gamefly, the video game-by-mail service, is now getting into the movie business.
According to a report from VentureBeat,the company started offering the service to customers today. The CEO told VentureBeat that the company is doing this in response to requests by customers and they’re going to go slow to see how the service performs.
I think this is a smart move. Netflix has basically said they believe disc-by-mail is dying, but like so many mature businesses that are no longer in a growth stage, there’ll be lots of revenue on the table for years to come for those willing to serve the market. Add in the fact that Gamefly’s core game-disc-by-mail business already provides the company with infrastructure to deliver movies, and it really becomes a no brainer.
Bottom line, Netflix de-emphasis on discs leaves a void in the market for consumers. Windowing will remain such that streaming will not satisfy the new release cravings from consumers. This leaves discs, and while the void can be filled to a degree by Redbox, many consumers are still probably ok with getting discs sent to them by mail, especially those already using mail delivery for games.