CKL's HotSheet
What Non-Aardvarks are Pondering

By Curtis C. Chen

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November 14, 2000

Yay for NetFlix!

Date: Tue, 14 Nov 2000 00:08:26 -0800 (PST)
From: Curtis
To: Mike
Subject: Re: NetFlix

The Upside article you quoted is out of date.  NetFlix no longer offers
7-day movie rentals; they now offer an "unlimited rental" subscription
service.  But you know that already, since you just signed up for it.

Blockbuster does rent DVDs, but their selection is very limited.  They
can't compete with NetFlix on that front.  I won't even get into the whole
censorship thing.

As for impulse renting... the way I see it, NetFlix's current business is
very different from the traditional video store rental model.  Video
stores *depend* on impulse renting.  I believe NetFlix is working the
other end of the market.

Here's the analogy I prefer: NetFlix lets you build your own movie
channel.  HBO and other premium cable channels typically get a movie,
e.g., _The Matrix_, and play it over and over for a month.  If you get HBO
and want to see that movie, you'll have to check the schedule and plan to
watch it when it's on.  With NetFlix, you can queue up new movies before
they're released and watch them whenever you want.  Basically, you get a
lot more convenience for a little more planning.

I don't know how well this works for other people, but it works great for
me.  I used to make lists of movies I wanted to see, but would then forget
to bring those lists when I went to the video store.  NetFlix keeps track
of my list for me, and I don't even have to go to the video store.  DeeAnn
and I are both on the 4-movie program, so we rarely have less than 6
movies (2 in transit) to choose from when we want to watch something new.

I've been a NetFlix customer for over two years now, and I haven't yet had
a bad experience.  Of course, their main shipping center is in San Jose,
so my deliveries are always pretty quick.  People living farther away may
have a different perspective.

ObFunny: Bryan "unemployed slacker" Bell is on the 8-movie plan, but he
goes through 'em so fast, NetFlix can't keep up.  Now he's complaining
that there are no more movies on DVD that he wants to see.

As for downloading movies, I don't think it'll happen any time soon.  The
broadband infrastructure doesn't exist yet for consumers, and it would be
a different medium-- not DVD.  NetFlix works because they're delivering
existing commodities.  They don't have to produce the movies, the DVD
players, or even support the delivery method.  It's all service, and
they've been really good at that so far.

CKL


# -----Original Message-----
# 
# I started doing some background on NetFlix since I just joined and it seems
# like a good service except for some of the drawbacks mentioned in the
# article below.  Mainly, it's not conducive to impulse-renting, which is how
# many, many people rent videos.  I was thinking about investing but it looks
# like they haven't gone public yet, although they have reserved the symbol
# NFLX.  I read in the Industry Standard that NetFlix will try by the end of
# this year to take advantage of broadband users by offering movies for
# download.  Has anybody heard any more on this subject?  Anyone know of any
# negative experiences with NetFlix?
# 
# --Mike
# 
# 
# Upside Today
# September 08, 1998
# Rent to Own
#  
# 
# NetFlix Inc. of Scotts Valley, Calif., lets DVD aficionados rent DVDs by
# mail, keep them for a week and then either mail them back or purchase them.
# Not only can you browse through the in-stock DVD selection, you can also
# look at upcoming titles and request to be notified via e-mail when the
# selection becomes available. NetFlix's Web site has a seemingly endless
# selection of movies, as well as descriptions and reviews of selected
# releases. Once you've loaded your shopping cart and paid online, you receive
# the DVDs in a special package that doubles as a postpaid return envelope.
# NetFlix's special packaging and ability to ship inexpensively are the work
# of direct-mail genius and NetFlix CEO Marc Randolph. Because there's a
# nominal shipping charge each time, it's wise to rent several DVDs at the
# same time. 
# 
# 
# The problem is, we don't think most people are likely to rent movies this
# way. Most people decide on an impulse to head for the video store after
# spending half an hour or so carefully reading the backs of lots of VHS tape
# sleeves. Taking the retail shopping experience out of video rental may mean
# losing some customers. Now, if you rent a movie and it turns out to be a
# turkey, you can return it the next day. We don't believe customers want to
# wait for a movie to arrive in the mail and then be stuck with it for a week
# if it turns out to be a dumb choice. Also, once a large percentage of
# consumers accept DVD, you can bet Blockbuster will start renting the discs
# from their stores nationwide, offering a selection that rivals NetFlix's.
# How will NetFlix survive then? 
# 


-- 
CKL
not a prefabricated aardvark

http://snout.org

CKL

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