Last November when Best Buy announced that it was going to go into the movie rental business, I didn’t think it was going to be a wise business decision. With Netflix being the undisputed online rental company at an incredible rate of $9 a month for one at a time rentals plus down streaming, how was anyone to compete against it? Also, RedBox has dominated the $1 rental movie business from its strategically located automatic rental locations. But Best Buy is going to introduce its own rental of movies starting at $2.99 to $3.99 per flick, and I once again challenge the wisdom of such a move.
A recent article states:
Best Buy is tying Web-delivered entertainment to electronic devices sold in its stores as demand for physical DVDs declines. The service will start with a la carte, on-demand purchases and may later become a subscription service like Netflix Inc., Chris Homeister, senior vice president of entertainment, said in an interview.
“This service, coupled with us selling an increasing number of connected devices, drives a broader consideration for Best Buy,” Homeister said in an interview.
Movie rentals will cost $2.99 to $3.99 as part of the service, Best Buy spokesman Scott Morris said. Videos will cost $9.99 to $19.99 for digital purchase.
What I don’t understand is that this business model already has been tried by others and has not succeeded. So why does Best Buy think it can do what others can’t? I personally believe it also will not be successful in its DVD rental business.
What about you? Can Best Buy make this fly or is it already late for the party?