Tag Archives: DVD rental

Redbox Gives Netflix the Blues

So, what service (or services) are you using for your media rentals? Still going to the video store? Downloading or streaming? Using the DVD kiosk outside the 7-11?

Well, your choices keep multiplying! DVD purveyor Redbox is on a roll since they made the deal to buy up all of rival Blockbuster’s kiosks. The latest development? They are breaking out of the physical DVD realm and getting into streaming, courtesy of a new partnership with Verizon.

The service called “RedBox Instant by Verizon” will offer more or less the same features as Netflix will, without the home delivery option.  Consumer Affairs

Which is MORE bad news for Netflix.

Netflix is in perhaps in that fabled location between a rock and a hard place. It is losing about 1 million DVD customers per quarter while its slow-growing online customers are consuming more and more streaming video. DVD rentals are about five times more profitable than streaming video. Consumer Affairs

I guess the question is, are your rental habits changing? Me, I finally got an HD TV. I am getting about 10 channels of local HD content, and thinking of signing up for a couple of rental services like this. And, once and for all…DITCHING CABLE! What do you think?

Netflix: Self-inFLIXted Wounds

Have you been following the implosion of Netflix lately? I know, it’s not easy! The video rental business built its name on home DVD-rental delivery. More recently, they have also been offering streaming content to their higher-tier customers, basically for free. Well, them days is done, son! And the fans are irate.

Netflix CEO Reed Hastings with self-inflicted wounds. This might be Photoshopped.

The problem is that they tried to build their streaming service by giving it away for free, as an add-on to their snail-mail DVD service. This was a good way to add customers. But the history of the internet indicates that once you convince people something is supposed to be free, or close to it, you will have a devilishly hard time getting them to pay for it.   Megan McArdle, Atlantic Monthly

Particularly when Netflix apparently knew from day one that home-delivered DVD’s were a short-term gateway drug to eventually get us hooked on streaming video. They always knew they would have to start charging for this content eventually, so how did they screw it up so badly? Jacking up the price by 60%, enraging their customers, then splitting the business in two, with Netflix as streaming only and Qwikster for DVD’s. Bottom line, they are expecting to lose 1 million customers in the short term!

So, let’s hear it, Netflix fans. Were you shocked, angry, or indifferent? Let us know!

Update October 10, 2011… Now they have scrapped the whole idea! What a head-scratcher!