Reuters: Netflix Wins First Round

Retuers is running a story about the war between Netflix and Blockbuster, Netflix wins first round in online DVD rental war.

"This year was about Blockbuster taking a run at us," Netflix Chief Executive Reed Hastings told Reuters at the company's Beverly Hills offices. "They chopped price. They emptied their balance sheet."

But despite Blockbuster's costly offensive, Hastings said Netflix was on track for net subscriber additions of 1.5 million for 2005 for a total of 4.1 million -- the midpoint of its target range.

Meanwhile, Blockbuster, which has been roiled by management and debt problems, saw the subscriber base at its 16-month-old online service stall at 1 million.

The war is far from over, but the story gives us the current stats: Netflix is debt-free and worth $1.5 billion, while Blockbuster has $1 billion in debt and is only worth $684 million.

Blockbuster still appears to have a sense of humor:

When the head of Netflix Inc. said rival Blockbuster Inc. threw "everything but the kitchen sink at us," the world's largest video rental chain responded by sending him ... a kitchen sink.

Keith and Mac for sending this in.

Comments

Having both services I can say this with experienced confidence.

Both services provide a reasonable service, far from perfect for sure, but reasonable. If I were to have to pick one, BB would win simply because of the in-store coupons.

The one and only reason for that is because I have been long time, efficient customer of both services, both have me tagged, both play the deny we received it and claim we sent it game.

Because of that it is virtually impossible for me to get a new release when it comes out, so the BB coupons allow for that to happen. During the entire time I have been a customer I have never failed to be able to get the new releases I wanted at the local BB store using the coupons.

Dollar for dollar both services provide me with reasonable value.

NetFlix costs me approx. $1.60 per disc.
BlockBuster comes in at an average of $1.01 due to the in-store rentals having a "value" of $6.98.

Both are far cheaper that renting locally for me, but mainly our crappy local stores (There are only 3 in our city) have very few titles to choose from.

[JW]

I have an account with both also and completely agree with the above post.

[both ways]

i have both and also agree!

"Dollar for dollar both services provide me with reasonable value."

You can get similar value from Hollywood MVP, Blockbuster Movie Pass, and BB Rewards. I've not paid more than $2 for a rental in several years. Usually not even more than $1. And it is my experience that stores often have discs that Netflix and/or Blockbuster Online do not carry. It's most valuable for me to have the biggest selection and that requires diversity.

"You can get similar value from ..."

I larger cities perhaps, but in the small city I am closest to the selection sucks. Even more, it is a 20 mile one-way drive, thus if I want to avoid late fees, it costs me 2 gallons of gas to take the disc back.

Although BB has really been dropping the ball for me over the past few weeks. First my open slots sat empty for 3 days, then all my movies *ALL* of them, went to long and short wait. I called they *fixed* it.

I called again today as I have had 3 empty rental slots since Thursday and they did not fill them.

They now claim to have shipped me 3 movies (Just got the e-mails at 9pm my time).

My guess is I will get them Friday (Some movies get here in one day) but I expect these are still sitting in the distro center. They just marked them as shipped to shut me up for awhile.

All in all, I just wish someone would offer a DRM-free VOD service. That would be sweet. I have a feeling this place will do just that very soon.

http://www.allofmp3.com

They are almost perfect when it comes to delivering MP3 music. 2 cents per MB for DRM-less music and you can choose the bitrate on the fly.

"Although BB has really been dropping the ball for me over the past few weeks. First my open slots sat empty for 3 days, then all my movies *ALL* of them, went to long and short wait. I called they *fixed* it."

Yep. All that happened to me with BB online. Plus, several movies a month are either late, never show up, or arrive broken. And all the discs are sent out of order, making the whole queue system completely worthless. Plus no more special edition releases. That was one of their main benefits, aside from the in-store coupons. Next, we'll hear they are dropping the coupons too. I would quit, but they have some titles i can't get from Netflix. I don't want to give all my money to Netflix, but BallBuster is giving me no choice.

I have the same above problems with my Netflix que!