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I do know netflix acquires movies two ways, One they but them out right at a discounted price. The other way is a rev share plan were movies are acquired at a faceless value and in return of how many rentals for that movie they send back a profit based on that.

Something also they do, which has been going on for about four years is some major movies from certain vendors are gray instead of the ones you see in the stores. To help deter theft, so the movies don't show up at the flee market for sale(which happens quite often)

frisbee tosser

It's not a formal part of the program, but I'm finishing up a group project for an MBA Electronic Commerce course comparing Blockbuster Online with Netflix, and making recommendations as to how Netflix can improve. We don't have any kind of inside information. My number one recommendation is they need to improve overall service to reduce the churn rate. They need to keep their existing subscribers. That means no more throttling. If they can get a DVD to someone in a day, they need to do it. If certain levels of usage are too costly, set up another subscription level, don't deliberately delay delivery and force someone to go to Red Box for the weekend. I'd also set up some sort of rewards program for longer term subscribers. It could just mean the offer of a free T-shirt or cap, or else a discounted month every so often.

They need to give access to all of their movie search features to non-subscribers. Right now people who come to check the place out can't see that trailers are available, for instance. Netflix needs to start selling new DVD's, and to make that option available to non-subscribers as well. They need to consolidate features so that it doesn't take so many extra clicks to get to something. If I search for a movie, I should be able to watch the trailer, add it to my queue, buy a new copy or a used one if available, all from that same spot.

They need to start selling advertising on the backs of their tear-off flaps and on their "Netflix has received..." and "Netflix has shipped..." e-mails. They send out 1.6 million envelopes a day, and could have Orville Redenbacher, Coke, Mars or whoever pay them to place advertisements and coupons on the backs of those flaps. The same is true for the 3.2 million e-mails a day, and that includes the option of hotlinks along with the advertising.

Other things I'd suggest are the possibility of working Saturdays at some of the shipping centers to speed up the delivery process and to ease the strain of Mondays that now have two days of mail deliveries plus the shipment of new releases for Tuesday arrivals. Those are the key suggestions I have for the short term. Cheers. John


They already have advertising on the backs of the tear-off flaps. I don't pay any attention to them, because I write the title (and otaher information) on the front of the flap.

Blockbuster also advertises on the back flap.

frisbee tosser

I've seen twenty Blockbuster flaps in the last month. They only promote their own service.

I'm talking about a way to generate additional revenue streams by being paid to advertise for other companies, on the tear-off flaps and also the 3.2 million e-mails sent a day. For my presentation I'm using this Orville Redenbacher promotion.


With the link, it would be perfect for the bottom of an e-mail. Add a 30 cent coupon and it would be pretty effective on the back of the tear-off flap.


Tosser ( ...sorry, just too ripe, no offense ),

Great analysis. I think you are correct, look what Blockbuster has done so far with the throttling weakness.

I would suggest an advertising campaign, "if you don't get your next movie in 3 days (4?), we will double up ( you'll get 2 in the mail at the same time ) on the next discs shipped or something like that.

Churn as a result of throttling or frustration at the inability to get a anticipated movie has got to be the their largest problem.

I think maintaining customer loyalty has got to be the single most significant issue for them.

..And at least remove the "unlimited" for the ads for the service. It is offensive to me, and irritating for quite a few others. It patronizes their customer base.

I know that throttling, and feeling disregarded when I raise the issue, was my primary reason for leaving.


"I've seen twenty Blockbuster flaps in the last month. They only promote their own service."

I have 6 flaps promoting Orville Redenbacher popcorn, which is particularly odd since you mentioned that exact company. It is a coupon that can only be used in their stores, but I don't call that promoting their own service. I've also seen coupons for Coke. They can do more broad advertising, but is it effective?


I don't know of one but I did a study on them for an Entertauinment Marketing class I took in Business School back in 2003-2004. Actually caused a bunch of classmates, including one of my teammates on the project, to become members

frisbee tosser

Type-cast. In the first post you were writing on the back of your Netflix flaps. In the second, you're reading to me from Blockbuster. Do you have current subscriptions to both services? There are two people in my project. I subscribed to Blockbuster so that I'd have as much info available as possible. My partner had access to Netflix. I asked him to confirm that Netflix hadn't started advertising anything other than Netflix on their tear-offs.
I've got eleven Blockbuster flaps in front of me. One just says "this DVD has no curfew." The others all have Total Access plus another item. One is selling three used DVD's for $20. Six advertise the free game rental you can get with the monthly coupon. Three are advertising Harsh Times & Bobby as rentals. I've never seen an ad on the flaps for anything not directly related to the two companies - again, as advertising revenue. If it does exist somewhere,it just confirms that the idea I had a couple of months ago was a good one. In the conference call last week, selling advertising was one idea mentioned by Mr. Antioco, along with a la carte rentals and an additional type of online rentals for people who can't or won't visit the stores. A short time ago, there was a link here for Forbes.com, which was asking for questions for Reed Hastings. I immediately wrote up most of the above and sent it to Mr. Hastings via Forbes.com. I really didn't expect to post follow-ups here - someone asked a question, and I more or less fit the bill for the response. I'm done now.

Weasel Buddha, I actually picked that name knowing it could be seen as a sub-category of tossers. I'm glad you picked up on it. No offense taken.

Cheers all. Thanks for the links to news stories - they've been invaluable. The project is done, and I'm on to whatever's next. Cheers. John

frisbee tosser

Oh - I've been getting free popcorn with my Total Access Snack Card, and I've seen Spiderman 3 twice in five days. Connecting premium popcorn with movies doesn't take much of a reach if a person is looking for positive connections.


I recently quit Bloackbuster after working there for a little over a year, which was during the peak of pushing their online service, and one of the best coupon deals they had was on their 2 Liter Coke products for .99 People used those coupons like crazy. During an 8 hour shift the 2-3 of us working would easily get 50 .99 Coke coupons. After the promotion was over the customers even complained that they havn't gotten any of those Coke coupons in awhile and were fairly upset when we told them the promotion was over. So I agree that the whole Netflix coupon thing would totally benefeit both parties. By the way Blockbuster clearly has the upper hand on the overall quality of their online service, they offer free in store returns (where the customers practically abuse), offer free coupons, they get access to Blockbuster exclusive title, and they even get boosted deals like getting 3 for $20 previously viewed DVD's instead of the normal 2 for $20 deal that non-members get. I do not subscribe to Blockbusters service mainly because of the sheer abuse they put on their employees to push the service, we would serously get calls from upper management and screamed at to sell more onlines more then 5 times a day. Netflix seems to be working great and I have yet to experience throttled shipments, but they need to seriously up their game in order to maintain hold on the online renting market.



Waytansea27 said:
"By the way Blockbuster clearly has the upper hand on the overall quality of their online service, they offer free in store returns (where the customers practically abuse), offer free coupons, they get access to Blockbuster exclusive title, and they even get boosted deals like getting 3 for $20 previously viewed DVD's instead of the normal 2 for $20 deal that non-members get."

This may be nitpicking, but each of the examples of better quality for online service are actually examples of in-store advantages rather than online advantages. I think most folks on these boards would agree that comparing the purely online components of both companies would favor Netflix since they ship in queue order and don't have that crazy 2-day window shipping rule.

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