DVD Rental Battle Zone – Netflix vs Blockbuster+RedBox+Hulu+Cable Networks…

By Rajesh Setty on Sun 24 Aug 2008, 11:01 PM - 6 Comments

It is interesting to note that long ago Netflix ignited the change in the way DVD rental market worked.

Netflix model was simple and the core still continues to be the same. For a flat monthly fee, you can rent as many DVDs as possible and you can keep them for as long as you want. Depending on your plan, you could have as little as 1 DVD or as much as 5 DVDs with you.

It seemed like there is no stopping for Netflix.

Today, I think the playing field is changing again. While Netflix continues to enjoy the advantage of their innovation, it is now being attacked by a number of players. Here is the list of companies that are not allies but each one of them are trying to take a piece of the market.

1. Blockbuster: Has an offline and online strategy. You can rent online and return offline. Netflix cannot do it unless it has an offline presence. Plus, Blockbuster dropped the rental fee for old movies to $1 for five days

2. RedBox: Redbox has installed kiosks in several supermarkets and MacDonalds stores. The focus of Redbox is to rent only the latest 100 movies or so for $1/day.

3. Hulu and Other Online Venues: Watch movies totally free

Add to this the Cable Networks and Digital Video Recorders (like TiVo) and there is a battle zone in the making.

I am sure there are more innovations coming up. This is a case where whoever innovates first and fast will ultimately win. Will wait and watch

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Posted in the Business Models, Innovation category.

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Basavaraj Yadwad on September 23rd, 2008

Recent addition was http://www.bigflix.com/ these guys have DVD pickup/delivery services at nominal charges of about INR 280. There was a inagural offer of 150/per month for our company which I missed ..
Heard from colleagues, that their service is good and covers most part of the city (atleast Bangalore)

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Joe Fission on December 23rd, 2008

I’d love to see an alliance between Netflix and Redbox. I’ve used both BB and Netflix and am a current Netflix user. But BB has recognized their strength and their newest plans cater to folks who are primarily instore renters, and might dabble online. I love Netflix, but often find myself at Redbox for rentals. Netflix with any kind of physical presence could be the nail in the coffin.

Rajesh Setty on December 23rd, 2008

Joe,

That will be an interesting combination for sure.

Cheers,
Raj

Bro on July 4th, 2009

There’s more to online video than just availability. Hulu provides high quality, hi-res video of recent and current shows, and Netflix provides low quality streams of really old stuff. (Actually, Netflix used to have great online video, but they stuffed it up by changing their player.)
Hulu might have a little advertising, but it’s not as much as your local TV channel, and they often offer a choice of how you get it. In contrast, Netflix want real money from you! If they can’t provide quality online video for your dollar, it seems inconceivable that their users will continue to want to pay for it when higher quality video is readily available.

Rajesh Setty on July 4th, 2009

Bro,

Good points. But please note that this article was written almost a year ago. Lots of things have changed in this space and I am not following everything.

But, thanks for the comments.

Best,
Raj