Ian Landsman is Starting From Scratch, January 11, 2007:
Forget Verisign and Netflix
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Scoble says Verisigns new movie download service is a Netflix killer. Dave says he’s wrong. The fact is they’re both wrong.
If you watched any football in the past few weeks you already know the answer of who’s the new king in movie rentals. Yes, Blockbuster. A company most certainly left for dead some time ago. I thought they would never catch on, but apparently having their stock price go into the toilet finally woke them up. For the past few weeks you simply can’t watch a football game without seeing their new ads.
The ads advertise their new offer which is a Netflix like offering bundled with traditional stores. So if you have some movies from the internet service, but tonight you want to watch a movie you can go to a store and drop off the old movies. No need to put them back in the mail if you’re in a rush. No penalties, no problems, no waiting.
I believe this will be huge. Who hasn’t had some old Netflix sitting around on a Saturday and wishing you hadn’t been so lazy and dropped them in the box. But you didn’t so you’re stuck with old movies. Blockbuster just solved all your problems.
In fact I was so impressed with the ads and idea (as much the ads as the idea really) that I purchased some stock in Blockbuster last week and already have a double digit gain. The market likes this new push big time.
Don’t get me wrong downloads are the future, but the future isn’t now yet (huh?). In the short to mid-term physical movie services are still the way to go.
Discussion
I agree that new Blockbuster service is awesome, and I've considered signing up (but I don't have enough time to even watch whats on my TiVo currently). I don't think it will kill Netflix. Maintaining all of those physical stores is too much of a cost for Blockbuster to maintain this model. This is desperation, and I think it's a win for Netflix, it's similar to that article Joel wrote about Lotus 1-2-3 pricing their product at $99 when Office was going for $400.
I think if anything, it eats even more into Blockbuster's current in-store customers, that I imagine still make up the majority of their customers. If Blockbuster can't price in-store rentals at under $5 a pop (which is the reason half of us switched to Netflix besides the selection), I don't see how they can keep this up for long.
As for Verisign... yeah Scoble is wrong.
Created by Phil on 01.11.2007 10:14 am
I think the key though will be to kill the unprofitable stores. They don't need to keep them all open. Plus Netflix doesn't really have anything unique to offer. Of course getting people to switch is always hard, but it's not like Netflix is 80% of all DVD rentals. The majority of the country is still not using any internet based service and is still going to the store. So they can still win by converting people who are not using the net right now.
I don't think they'll be able to drive Netflix out of business, but they do have a good shot at overtaking them in revenues. Netflix needs to partner with someone to counter this. I wouldn't be surprised if we saw some type of partnership at some point.
Hey what about Netflix vending machines? Drop your flix off at the vending machine and be able to instantly get one of the top 20 movies or something like that.
Created by Ian on 01.11.2007 10:24 am
Aren't DVD rental vending machines one of those get rich quick infomercials on at 2am? 
. But seriously, I can't wait until this is all done digitally (I guess similar to what Scoble is saying). Netflix signed a deal with TiVo like 2 years ago to deliver movies right to TiVo somehow... but that never happened. If Comcast or Verizon made their OnDemand PayPerView "all you could eat", I wouldn't even have to get my lazy self to the mailbox!
Created by Phil on 01.11.2007 10:53 am