Battle of the Brands: Netflix vs. Blockbuster
Posted by: in Companies Competitive StrategyFiled under: Competitive strategy, Netflix, Inc. (NFLX), Blockbuster Inc ‘A’ (BBI), Battle of the Brands
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Way back when, the movie-rental wars were fought between the neighborhood video stores (which had limited availability) and the superchain Blockbuster (NYSE: BBI) (which had limited availability except for the Die Hard series). Then, Netflix (NASDAQ: NFLX) came along with an astonishing business model. Set up an account on the web, build a mammoth list of movies (from tens of thousands available), receive a few in the mail and send them back when you’re done — no late fees, but you only got new movies when you sent old ones back.
At the time, Blockbuster — and many consumers — didn’t think it would work. First of all, you had to wait a day or two to get new movies; and second of all, who was going to want to deal with sending movies back in the mail? I mean, gosh. Well, eventually, Blockbuster caved and started the same kind of service. When you compare the two, however, which one takes the cake?
What Netlix Offers: For $16.99, you receive three DVDs in the mail. These movies come from the top of the personliazed list you create on the Netflix site. Delivery times vary, but local distribution centers can usually get them to you in two days. You can keep these DVDs as long as you want; but, if you never return them you never get anything new. Which is a real bummer when I Am Legend is gathering dust on your TV set. After you’ve watched one, or more, send it back in the provided postage-paid envelope. Within a few days, your next movie arrives in the mail. As of now, Netflix offers a total of nine (9) membership plans, from one-at-a-time to eignt-at-a-time. You can also buy DVDs through the site, in addition to watching certain movies for free.
What Blockbuster Offers: For $19.99, they have the same kind of three-at-a-time system (but nothing more than three). The main difference is that members have the option of returning movies at “participating” Blockbuster stores; however, they can only do this several times a month and after that there’s a $1.99 rental charge. Some of their premium packages offer free unlimited in-store exchanges, but the late fee can be applied to these in-store rentals.
Who Wins? It depends on how you operate. If you’re online savvy, keep your queue of films updated and don’t mind the day-or-two wait, Netflix is tough to beat. But if you like the convenience of dropping by a local store and immediately exchanging it (like, state if you really don’t like the motion picture you rented) then Blockbuster is your man.
B. Brandon Barker also writes for Political Machine.
Vote in our poll for Netflix or Blockbuster as your preferred brand, and let us know in the comments why you love it.
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