I pride myself on being one of NetFlix most early subscribers. I loved the service almost as much as I loved Webvan (I really miss those guys). The idea was about as simple as you get; order movies online, they come in the most ingenious packaging I had ever seen, and you mail them back. No drives to the video stores, no waiting in line, no more disappointment in seeing that the movie you drove all the way there for is checked out. It was nearly perfect.
When Blockbuster released their service, I was less than enthusiastic. Don’t get me wrong, Blockbuster has accomplished great things. Their Centerstage initiative helped revolutionize the personalization space with the CRM industry. But what I remember about Blockbuster most was in the mid ninties when I went to check out a movie I had heard a lot about, “Kids?. Blockbuster only carried the edited version. The manager explained to me that this was because Blockbuster is a “family? video store. She was unable to explain what type of family entertainment all the Shannon Tweed Skinimax videos provided.
So I quickly learned that Blockbuster didn’t cater to indie movie fans and found other places. Netflix was exciting in part because they carried all those rare titles. Although not without their own hiccups. I had the 2 DVD set of the Joseph Campbell documentary in my queue for over 4 months, and it never shipped.
But over the years I have seen other companies try to replicate the Netfilx model. My personal favorite idea catered to the adult DVD rental space. But Blockbuster kept churning away trying to take the market.
First they tried the price war, and Netflix got right in there. The price for 3 movies per month rental dipped below the $20 mark, and I was thrilled. Then came the free movie rental perks from Blockbuster. Which was a good idea. Basically Blockbuster people get 1 free in-store movie rental per week. The problem is that it’s in the form of a coupon you have to print out. Why can they not simply access my online account while in the store? It should be a simple matter of accessing my account through the Web like I do at home.
But now Blockbuster has done something that Netflix will have a hard time competing with. According to BusinessWeek, starting today, when you return your online rental DVD to a store, you get an in-store movie rental. I currently get about 3 movies per week, which means that I would now get 3 movies per week in in-store rentals. Plus, my free rental via coupon. That’s 7 movies per week, an average of a movie per day, for $17.99 per month! Now that is a pretty good offer.
It would be even better if they consolidated my account and made it so I didn’t need to print a stupid coupon.
How can Netflix compete? I think the only way to do is it possibly create their own stores, which would take years to grow out, or they would have to partner with someone. The traditional thinking would be with Hollywood video. But why would they want to put themselves in a position of being second best out of the gate? Better thinking would be Wal-Mart, but Wal-Marts are not exactly the most fun stores to grab a movie quickly.
Personally, I’m thinking something more out of the box. This will sound completely insane, but what about a kiosk approach? I know people may think I’m an idiot, but if you do away with some of the old methods of movie rentals, it may work. There is technology to create temporary DVD’s that only last 4 – 5 plays. These work on normal DVD players. So, you create a kiosk with a huge hard drive, and Internet access. And you let people burn their DVD’s on the spot. You don’t really even need the temp DVD’s because if they don’t return the disc, they have to pay for that movie.
I know it sounds like an odd solution, but desperate measure are needed for Netflix to win this, or at least hold steady until Apple or someone kills them all with downloadable movies.
