Petteri Pyyny
15 Aug 2004 13:41
World's largest movie rental chain, Blockbuster, has finally bowed to pressure from online DVD rental services like Netflix and launched its own online DVD rental service in the United States this week.
Blockbuster's service cuts the Netflix's monthly fees by $2, offering a model where users of the service can hold three movies at home at any given time and pay $19.99 per month for the service. In addition to that, Blockbuster also offers two free "offline" rentals a month from its rental stores.
Blockbuster also announced that it will try to cut the logicstic costs of the online service by integrating its online and brick-and-mortar services by end of 2005, sending the movies and handling the returns at local Blockbuster stores rather than in nationwide warehouses. Concept sounds familiar -- that is exactly the way how Tesco built the world's only hugely profitable online grocery store service in the UK. But selling bread online and fighting against established online players like Netflix are two different things, even when you have a brand name like Blockbuster has.
Source: Washington Post