Netflix Beat Blockbuster But Now Faces Stiffer Competition

Last week’s news about Blockbuster filing bankruptcy came as no surprise, since the once popular rental business has been in financial distress for quite some time. Between Netflix and Redbox, Blockbuster no longer could compete nor match the efficiency that the competition was offering. People were tired of not having rentals available, but more important, having to race back to the store to drop off the rented disk. The latest competition is going to be from Apple, Google, Amazon and others who are going to compete with Netflix in the lucrative streaming movies over the Internet.

In a recent article it states that:

Netflix has raced to become ubiquitous. In addition to PCs, more than 100 types of devices can stream Netflix movies to a TV, including game consoles and Internet TV set-top boxes like Roku and AppleTV. The company says 61 percent of its 15 million subscribers streamed movies in the second quarter.

The weakness of the streaming service is movie selection. Netflix’s catalog of 20,000 streaming movies does not include many recent Hollywood hits because Netflix has been unable to negotiate rights from all the studios. Netflix has about five times as many titles in its DVD catalog.

Many of the company’s studio deals require it to delay making titles available — either on DVD or online — until they have been on store shelves for 28 days. For example, “Robin Hood,” starring Russell Crowe, is available to stream on Amazon but will not be available on Netflix until Oct. 19. Hulu Plus has the current season of “The Office,” while the most recent episodes on Netflix are from last season.

The industry is still very young, they said, and many companies are experimenting with business models and expanding their video libraries. Streaming requires less infrastructure and therefore has lower barriers to entry than a system built on sorting machines and distribution or even brick-and-mortar stores.

Though competition will keep pricing down for those consumers who choose to stream, it currently will make it difficult to select which service to use. As I have mentioned I have selected a Roku device to stream movies from Netflix, but I do not know how long Netflix will remain the leader in streaming. As with any new industry, it is going to be a few years before we know who the winner will be.

Competition against Netflix is going to be severe since the competition has a huge war chest of funds to fight with. Netflix appears to be the underdog.

Comments welcome.

Source – NY Times

Redbox To Offer Blu-ray Movies For $1.50 A Night

Redbox continues its quest to be your low price movie rental source by adding Blu-ray movies for only $1.50 a night.

With some 13,000 kiosks nationwide, the company is planning to double that number by year’s end.

But before you run out to your local Redbox vending machine, you may wish to check the link below for availability in your area.

Here is a question for you. Do you think that the extra 50 cents charge is worth it to watch your favorite movie in HD?

Comments welcome.

Redbox Blu-ray availability link

PS Interesting. Blu-ray movies are available to me within five miles of where I live. Now all I need is a Blu-ray player. LOL

Redbox Competing With Netflix

Between Redbox and Netflix, I never had to visit another Blockbuster or Hollywood Video ever again. Not sure why it really mattered, but at the time back then I suppose it had to do with convenience.

Flash forward into today and we see Web downloads or streaming video becoming the next big thing. Faster than waiting for DVDs or Blue-ray discs, streaming is something that is a huge hit in my own household.

So the idea of Redbox joining Netflix in this streaming realm actually makes a lot of sense. With downloading and streaming content legally becoming a huge success, it would behoove Redbox to provide content to fill the gaps being missed by Netflix streaming services.

In order for any of this to work though, Redbox would do well not to merely duplicate efforts seen by Netflix. They would need to make content available by flat fee and try offering much more content than Netflix is currently. The problem right now is for people streaming Netflix over hardware like the Wii and Roku, Redbox is missing here and would need something similar like the PS3 pr Xbox 360.


Bye, Bye Blockbuster – It’s Been Nice Knowing You

This should come as no surprise, but it does appear that Blockbuster is on its way to bankruptcy. With over $900 million in debt, the once rental giant is now trying to secure a life line of some $150 million to stay afloat. But the company has already put 400 of its Canadian stores in hock already, so the end may be near.

The company tried securing a deal in which it would release movies from Sony and Fox 28 days before other companies such as Netflix and Redbox. But it appears that strategy has not worked as well as the company expected.

Analysts are expecting that Blockbuster will file for bankruptcy sometime around its next stockholders’ meeting on June 24, 2010.

I certainly hope that the government does not bail out this company. We have spent enough trying to keep too many companies afloat.

Comments welcome.

Source – Consumerist

Murdoch Attacks Google, Now The Entertainment Industry Attacks Redbox

As we close out 2009, I think we will have to label this year as the year of the crybabies. It seems that a day doesn’t go by when some large business entity isn’t crying in their beer about the changes that are happening and how they can’t compete. The banks were about the only ones who couldn’t blame anyone else for their own greedy ways, though I am sure some of the banking crooks tried hard to point the finger elsewhere. The U.S. car companies woke up one morning in shock to find they were bleeding money and that the consumers weren’t buying their vehicles. Next came Murdoch with his criticism of Google stealing HIS news. But today’s article on how the entertainment industry is going to go belly up because of Redbox and their cheap rentals has to be one of the top picks of the year.

According to one article:

Redbox’s kiosks also will send shock waves throughout the industry and could lead to the loss of 9,280 jobs, $35.4 million in contributions to health and welfare funds being cut, and a reduction of $30 million in tax revenue.

Is it just me or is there something wrong with this picture? Isn’t this a scare tactic to attack Redbox? Has it become fashionable to attack another company when your own incompetence actually is to blame? Why didn’t the movie industry adjust when Redbox first hit the street? What part of the Internet didn’t the publishing industry understand? What didn’t GM and Chrysler understand when Toyota took over as the #1 car company?

I have an idea. Maybe California can ban Redbox kiosks! LOL

Comments welcome.


Do You Own A Sony PS3 ? Get Ready For Netflix Movie Streams!

While other companies like Blockbuster continue to have troubles in the movie rental business, Netflix continues to expand. In its latest offering, Netflix is going to be offering movie streams to owners of the popular Sony PS3 units. Current Netflix users with the $8.99 a month package for unlimited DVD rentals are automatically included in the movie stream currently being offered.

A recent article states:

Next month, the 9 million U.S. owners of Sony’s PlayStation 3 game consoles will have another entertainment option available to them: streaming movies and TV shows from Netflix.

The long-awaited announcement gives Netflix another distribution channel for its “Watch Instantly” service, which is already available via the Microsoft Xbox 360, a variety of Blu-ray players and HDTVs, TiVo and the Roku box.

Here is how it will work:

The PS3 implementation of Netflix is not the most elegant. PS3 owners will have to order a special, free disc from Netflix and pop it into their gaming console whenever they want to access the Netflix queue and watch a movie. Sony and Netflix seem to suggest this is a short-term solution, until an upgrade next year in the PS3 software.

It would appear that Netflix will continue to be the dominant force in the movie rental business along with Redbox outlets. As Netflix continues to expand its offerings there may come a time when we will be able to rent the latest DVD and Blu-ray disks online and have them streamed to our computers and TVs.

Comments as always are welcome.


Frugal Consumers Are Renting Rather Than Buying DVD Movies

Hollywood is having issues with its declining revenues and is now looking at Netflix and Redbox for more bucks. In an age where consumers are controlling their spending, Hollywood is feeling the crunch as consumers decide to rent rather than buy. The fear is that even when the economy bounces back, we consumers may not flock to the DVD aisle to purchase Hollywood’s latest and greatest releases.

A recent news article states:

“The days when you [could] get anyone who wants to see a movie to pay $15 at a Blockbuster, Best Buy, or Walmart are in significant decline,” former News Corp. President Peter Chernin told a recent University of Southern California roundtable. “And you’re going to see [DVD sales] continue to decline.”

It is a measure of Hollywood’s desperation that the studios, which rarely agree on anything, are closing ranks to shore up the business. This past summer, Sony, Paramount, and Fox discussed combining back-office and distribution operations as a way of cutting costs and boosting DVD margins. Those talks have since bogged down because hoped-for savings might not materialize quickly enough.

Meanwhile, some of the largest studios are looking to squeeze more money from
Netflix, the fast-growing online behemoth that revolutionized the DVD rental business. Jeffrey L. Bewkes, CEO of Warner Bros.’ parent company, Time Warner, told an industry conference in mid-September that his studio wanted “better economics” from its Netflix deal. Time Warner, according to knowledgeable industry sources, is pressuring Netflix to rewrite its agreement either to share more of its subscription revenues or to get DVDs from the studios weeks after Wal-Mart and other retailers get them. A Netflix spokesman says only that it “continues to discuss the changing market” with the studios.

Another player feeling the hot breath of Hollywood is Redbox, the fast-growing upstart whose $1 DVD rental kiosks are in supermarkets across the U.S. In a bid to protect DVD sales, Warner, Universal, and Fox have threatened to withhold titles from Redbox unless it agrees to several restrictions. According to a lawsuit Redbox filed against Universal, they include limiting the number of titles rented in each machine, sharing rental fees, and waiting 45 days after a film has been in stores before renting it. “We think there is a place for very low-priced rentals, but obviously not in the middle of when we are trying to sell higher-priced [products],” said Bewkes at the same conference.

I am just wondering if there isn’t more to this than what Hollywood thinks. I know I have changed. I have noticed that with some 200+ channels on my Dish service, many of the movies I may have thought of purchasing are now being shown regularly on the tube. With Netflix movies on demand, why would I want to buy the movie on DVD? Just my two cents.

I just thought of something else. I have two cabinets full of DVD movies that I haven’t watched in years. I seriously doubt that I will be buying a movie on DVD again.

Comments welcome.


Redbox DVD Rentals – Do They Undervalue The Movie?

Redbox DVD rental locations exceed over 15,000 locations. Movies are offered at the low price of only a $1 a day. Redbox locations are so popular that at some locations people are lining up and waiting to get their hands on the latest releases. But all of that may be coming to an end as several movies studios have ordered that newly released movies not be sold to the rental company.

In a recent news release it states the following information:

The kiosks are gaining popularity, but their price and ease of use aren’t winning over everyone. 20th Century Fox and Universal Studios have ordered wholesalers not to sell newly released DVDs to the rental company.

Unlike Blockbuster and Netflix, Redbox does not share profits from rentals with the major movie studios. But why should they?

The rental kiosks do not violate copyright law since they legally purchase the DVDs, and any form of unnecessary profit-sharing would certainly raise prices for consumers.

Upset by Redbox’s success, Fox and Universal are leaning on wholesalers who distribute their DVDs to cut ties with the rental company. Redbox has responded by suing the studios for anti-competitive practices and abusing copyright law.

I must agree with Redbox. This type of behavior by the studios is not in the best interest of the consumer. The studios are Communists who need to be dealt with severely! Power to the people. LOL

Comments welcome.


Redbox Giving Netflix A Run For Your Money

A former Netflix executive is having success with his Redbox DVD rental kiosks which are popping up at the rate of one an hour. Redbox currently has over 15,400 kiosks located in supermarkets, discount stores and also at McDonald’s. What makes the rental kiosks so popular? Try $1 a day rentals for starters.

Instead of having to wait for Netflix to mail you a DVD, renters of popular movies are turning to Redbox for their DVD needs. Netflix is admitting that Redbox is going to be their greatest competitor and is looking at ways to counter the Redbox popularity.

According to a recent article it states:

Redbox began in 2002 as a way for McDonald’s Corp. to expand beyond the burger business. A strategy group inside the company tested a few “automated retail” ideas, as it called them.”Vending sounded so last-century,” said Gregg Kaplan, who led Redbox from inception until April, when he became chief operating officer of its parent company, Coinstar Inc.

McDonald’s also tried a machine that made fresh french fries and an 18-foot-wide automated convenience store that sold everything from toilet paper to fancy sandwiches. Only the DVD kiosk stuck.

The group running Redbox grew from operating 12 of the DVD machines to about 900 in three years. By the middle of 2005, Redbox was itching to expand beyond burger joints, and McDonald’s agreed to let it seek out another partner.

Coinstar already had a national sales team placing machines that converted loose change into bills in supermarkets, drug stores and other retailers — relationships it could use to pave the way for Redbox kiosks, too. In 2005 and 2006, Bellevue, Wash.-based Coinstar invested $37 million in Redbox and took majority ownership, and this year Coinstar bought out McDonald’s and other investors for up to $25 million.

As Redbox continues to grow the competition could be a boon to consumers. Netflix may be forced to lower their rental pricing of Redbox continues its popularity.

What do you think? What’s your personal DVD rental favorite outlet?

Comments welcome.