Netflix 4Q Profit Up 45 Percent – NYTimes.com
It doesn’t hurt that Blockbuster has pretty much dropped the ball with their online service.
When I started, Blockbuster offered a free in-store rental each month, which was a nice perk. Then for a while in 2007 they had a ridiculous deal going on. As an online subscriber, you could return any mailed DVD in-store for another. With the 3-at-a-time plan, I was getting 6-slightly-staggered. They started losing money on that because, while a once a month coupon might entice a customer into the store to rent or buy something else while they were there, turning in three movies for three more doesn’t do that. When they raised the price of their subscriptions, I dropped them for a while. Not really because of the price increase (which was minor at that time), but because I had run out of things I wanted to rent.
When I was interested in their service again (April of last year), Blockbuster had changed their subscription structure entirely. In-store trade-ins were now a premium. Since I favor that $15 price point (and I have a feeling many other people do as well), I went for the plain old 3-at-a-time subscription. They were still better than Netflix, I figured. Things were good for a while. Blockbuster doesn’t throttle; they ship on weekends. But gradually, I ran out of movies that were available. Everything in a queue that included old and new, cult and mainstream, was at least on a short wait. Screw that, I thought. And I certainly wasn’t going to go to a Blockbuster store to rent movies while I was paying $15 a month to have a queue of on-hold movies. So I went back to Netflix.
It’s only been two months, but so far Netflix has impressed me. The instant downloads are handy, especially since I like to have a movie going in the background while I work. I watch them on my laptop and generally the quality is good. They’ve changed their policy about damaged discs; they now immediately send a replacement or next disc instead of waiting for the other one to be returned. And surprisingly, when one of my discs needed longer for shipping, the sent the next quickly-available disc as well. Maybe Netflix is trying too hard now, but it’s working for them. For the moment, it’s working for me too.