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Mario Vellandi

There's an interesting thread over at Lifehacker which I commented on last week with Netflix v. Blockbuster, with the value in the comments. Here are mine:

"I've been using BB online for 4 months now and am happy with the service. I'm not a diehard fan, but I have no real reason to switch to Netflix in all its glory, and wider selection. Truth is: There are plenty of movies I have yet to see that are on my queue. My time is limited. If I want great reviews, i go to imdb.com
If I want to rent a movie for my mom, I use a weekly free coupon and pick it up from a store.
If I want to exchange an online movie for a new one at a store, I can.
Lastly, I can use one of the above options to get a new movie on Sundays, when the USPS doesn't deliver.

Maybe I will switch to Netflix someday. But right now, I'm content with the service I have."

If we compare the core service offerings of both companies, they come out about equal. Netflix users will remain fiercely brand loyal, and hardly likely to switch. But Blockbuster has its bricks-and-mortar advantages when compared to Netflix...can you see BB's parallel to BestBuy, Circuit City, B&N? BB will scale back but will become better aligned for the networked, user-review driven world.

Kevin Dugan

Mario - Thanks for the tip, I'll check it out. And I'm glad to hear your BB experience has been a good one. You make a good point regarding their bricks and mortar advantages, but the numbers I share above look pretty overwhelming. A temporary loss leader like giving NFLX customers free rentals is a short term idea and BB needs to expand on what makes their service great to customer like you in the longterm. Deep research with existing customers, happy and unhappy, should be taking place to learn what differentiates BB from other movie providers online and off. Hopefully it is not too late.

Colin McKay

In my case, I have a personal video recorder, digital cable, and video on demand. I have a BB membership, but rarely use it unless the coupon offer is unbelievable.

If you live in a country with readily accessible broadband (cable or otherwise), DVDs don't have much of a future in the market for "immediate entertainment" - no matter whether the mailman drops them off or you have to pick them up.

Kevin Dugan

Great point Colin. We had HBO on-demand for awhile and it was great (albeit a broader selection would have been great).

I think we're closer than ever to going all digital. But it will still take awhile. A few times in the past, I've wondered aloud as to when the family van will come with a server on it. It's only a matter of time.

Owen Lystrup

I think digital is definitely on the horizon. It has been for some time. Look at all the companies, like Wal-Mart and Amazon, that are going in the direction of downloading.

I think BB really shot itself in the foot letting Netflix use its stores. That was Blockbuster's only true advantage over Netflix when it let its online customers go into the stores and get free downloads and faster shipping rates. Now that Netflix can do the same thing, who isn't wondering if there's going to be a Netflix buy-out soon?

If there isn't a buy-out, will it be a possibility that Blockbuster begins to make use of the Long Tail and market toward specific audiences. I don't even know if that's possible because of Netflix's selection, but there must be some way for Blockbuster to adapt or transform to either keep ahead or side-step the competition.

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