Has Blockbuster Finally Found The Hammer To Crush Netflix? - InformationWeek

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Commentary
12/20/2006
03:03 PM
Mitch Wagner
Mitch Wagner
Commentary
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Has Blockbuster Finally Found The Hammer To Crush Netflix?

TechCrunch thinks it has, as Michael Arrington, a self-confessed former "die-hard Netflix fan," notes in a post explaining why he's canceling his Netflix membership. He says the recent announcement by Blockbuster that you can now return mail-order rentals at the store tips the balance. Also helping make Blockbuster more attractive: Allowing customers to use the free rentals for movies or games, generous free-

TechCrunch thinks it has, as Michael Arrington, a self-confessed former "die-hard Netflix fan," notes in a post explaining why he's canceling his Netflix membership. He says the recent announcement by Blockbuster that you can now return mail-order rentals at the store tips the balance. Also helping make Blockbuster more attractive: Allowing customers to use the free rentals for movies or games, generous free-rental coupons, and abolishing late fees.

Arrington spends some time talking about some business practices at Netflix that seem to me to be the company's Achilles' heel: If you are a frequent renter, renting more than five movies a month, Netflix will delay sending you new videos by a day or two, to cut shipment costs. Also, o, if you have a mix of classics and new releases in your rental queue, Netflix will send you the classics faster than the new releases.

These practices give competitors an opportunity to take Netflix down. No business can thrive in the long run if it punishes its most loyal customers.

And video stores offer one service that mail-order services can't offer: immediate gratification. I'm a Netflix customer myself, and I like it a lot. But my wife will be out of town over New Year's weekend, which means it's Bachelor Movie Marathon at the Wagner household. I'll be heading down to Blockbuster for sure, to catch up on the Adam Sandler cinema oeuvre.

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