Once upon a time there was a beautiful movie-rental store named Blockbuster. Blockbuster was very popular and locations could be found on almost every street corner in America. Blockbuster offered video games along with comedy, romance, horror and drama for those too lazy to go to the movie theater or too cheap to buy the actual film. Along with the invention of the home video system, the rental chain thrived in the 80s and 90s.
But with the dawn of the 21st century and the age of the Internet came a rival movie-renting princess named Netflix. Founded in 1999, Netflix.com allows movie lovers to simply log on to their computer and have any movie they so desire sent to their mailboxes for a small price and without the threat of any (gasp!) late fees!
Netflix currently offers their customers over 50,000 titles to choose from at $17.99 per month for unlimited rentals, with three movies out at a time. Along with two other options, Netflix’s lowest pricing option (and the one they advertise in the largest print on their Web site) is $9.99 a month for one unlimited rental at a time. Netflix currently has over 3,000,000 subscribers and its estimated revenue for 2005 is $660 million.
The immediate popularity of Netflix caused a downfall in revenue for Blockbuster, though the video chain bounced back in August 2004 with a version of its own Netflix-like service.
The online-home rental service that Blockbuster offers its customers has over 40,000 titles to choose from at $14.99 a month, for three movies at a time. Blockbuster also offers the same $9.99 plan as Netflix (advertised just as largely).
Neither Blockbuster nor Netflix have any return dates or late fees, allowing customers to return the movies at their own convenience. Postage is also paid both ways with each company.
Blockbuster’s strength over Netflix, however, is that its customers are given two free in-store rentals per month—an option that Netflix is unable to offer, being solely an Internet company. Nevertheless, Netflix still has more subscribers than the Blockbuster online-rental company. Some analysts believe that the Netflix name has already been branded as the better option.
College students have become a large customer base for Netflix.com and the Blockbuster equivalent because of the convenience of delivery.
SMU sophomore and movie fan Kyle Eldridge began renting DVDs from Netflix when he began school last fall.
“It was much easier to have movies shipped right to my on-campus mailbox rather than making a trip to the Blockbuster nearby,” Eldridge said. “And since I didn’t have cable in my dorm room, I was watching movies much more than usual and wanted a large selection of films to choose from.”
But others still prefer the old-fashioned way of renting movies from the brick and mortar buildings.
“I don’t watch movies at home too often, so having movies sent to me there would be wasteful spending. I would rather go to the [Blockbuster] store only when there is a specific movie that I want to rent,” sophomore Kirby Carlberg said.
The convenience of the Internet and the services that its companies offer provide a slew of options for customers and an even greater market for competition among the different companies and corporations. The battle between Netflix and Blockbuster is just another example of this competition, ultimately offering the best possible options for customers.
