Netflix reports first drop in subscriptions (thanks to Blockbuster)

Netflix Inc., the largest online DVD rental company, on Monday reported its first-ever quarterly drop in subscriptions and cut forecasts for subscribers, revenue and profit for the year in the face of fierce competition from Blockbuster Inc.
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Chief Financial Officer Barry McCarthy told analysts on a conference call that Wall Street estimates for fiscal 2008 earnings growth were "excessively optimistic."
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Netflix has spent the last six months fending off a rising challenge from Blockbuster, which said it will spend $170 million this year to promote its Total Access plan. That allows subscribers to swap DVDs rented online at its stores for free and has become a powerful competitor to Netflix.
http://www.reuters.com/article/ousiv/idUSN2337505820070724

This has to be a typo. Ive been told by numerous people on here that they dont go to blockbuster and havent for years, and that Blockbuster is a dying company. What gives?

This doesn't seem all that suprising considering BB's aggressive marketing of their Total Access plan.

I can't even remember the last time I saw a Netflix TV ad. However, it seems I can't go 30 minutes without seeing a TV ad for BB Total Access.

BB has a better subscription plan, netflix is paying the price for playing catch-up, old news

But Netflix still has a much larger selection than Blockbuster. I certainly have no desire to physically go to a store. I'd rather just go to the mailbox. I've been with Netflix for over 8.5 years and have no plans to go back to renting the 20th century way.

But Netflix still has a much larger selection than Blockbuster. I certainly have no desire to physically go to a store. I'd rather just go to the mailbox. I've been with Netflix for over 8.5 years and have no plans to go back to renting the 20th century way.
I have your way and I get to trade movies for free at the store if I want a movie now. Plus, I get a $2 discount on games.

Doesn't really surprise me. The question is, how long can BB continue operating like that? When I return my onlines to the store, at least 1/2 - 3/4 of the people there are carrying around their envelopes (which means the physical store is basically not making any money on those people).

I think everyone knows BB is a company in trouble, as has been discussed here quite a bit. I wouldn't be surprised if they scale back their Total Access, but I've been wrong before. I would think they're trying to steal business away from Netflix (which is working) and then hoping that people don't abandon them when they scale back their plans in the future (or when they close another XXX number of stores next year making it more inconvenient for those people to return movies to the store).

In the meantime though, I'll continue using the online plan, and returning to the store for freebies. I average right around 20 movies a month, so that's less than $1 a movie...plus my free game rental each month. I'm not sure I could get that many with Netflix, considering the mail turnaround time (although admittedly I have never tried them)

I have your way and I get to trade movies for free at the store if I want a movie now. Plus, I get a $2 discount on games.

They don't have very many HD DVDs and BDs at the Blockbusters here. I'm 99% done with SD DVDs. So HD DVD and BD rentals are all I really care about. And BB doesn't come close to Netflix. Although even for Sd the two stores near me never had much in stock since they were usually out of stock. That's one of the reasons I always stayed away.

They don't have very many HD DVDs and BDs at the Blockbusters here. I'm 99% done with SD DVDs. So HD DVD and BD rentals are all I really care about. And BB doesn't come close to Netflix. Although even for Sd the two stores near me never had much in stock since they were usually out of stock. That's one of the reasons I always stayed away.
I don't rent DVDs. I have had little issue getting BD abd HDDVD from BB online, and zero problem trading for BD at the store.

Netflix is fighting back with its Internet downloading services, but their commercial is not that interesting. Pretty odd to see grandpa watching movie on a laptop in bed, IMO.

Netflix is fighting back with its Internet downloading services, but their commercial is not that interesting. Pretty odd to see grandpa watching movie on a laptop in bed, IMO.
Downloaders are a very small group. If Netflix is betting on them, they're screwed.

Downloaders are a very small group. If Netflix is betting on them, they're screwed.

You should write to their board about this, :p.

But Netflix still has a much larger selection than Blockbuster. I certainly have no desire to physically go to a store. I'd rather just go to the mailbox. I've been with Netflix for over 8.5 years and have no plans to go back to renting the 20th century way.

Some customers always gravitate to the losing side.

Doesn't really surprise me. The question is, how long can BB continue operating like that? When I return my onlines to the store, at least 1/2 - 3/4 of the people there are carrying around their envelopes (which means the physical store is basically not making any money on those people).

I think everyone knows BB is a company in trouble, as has been discussed here quite a bit. I wouldn't be surprised if they scale back their Total Access, but I've been wrong before. I would think they're trying to steal business away from Netflix (which is working) and then hoping that people don't abandon them when they scale back their plans in the future (or when they close another XXX number of stores next year making it more inconvenient for those people to return movies to the store).

In the meantime though, I'll continue using the online plan, and returning to the store for freebies. I average right around 20 movies a month, so that's less than $1 a movie...plus my free game rental each month. I'm not sure I could get that many with Netflix, considering the mail turnaround time (although admittedly I have never tried them)

.....when they close another XXX number of stores next year....

Willingness to close locations that don't have sufficient return of investment (ROI) so as to free up capital to expand to locations and/or investments that do have good ROI are actually signs of good management and the ability to make necessary hard decisions. The "creative destruction" process at work. Go Blockbuster and Blu-ray, you're making all the right moves.

But Netflix still has a much larger selection than Blockbuster. I certainly have no desire to physically go to a store. I'd rather just go to the mailbox. I've been with Netflix for over 8.5 years and have no plans to go back to renting the 20th century way.

Well you know Aaron, with Blockbuster customers have the CHOICE of going to a store or using the mail. And they have the FLEXIBILITY to modify their choice from day to day depending upon their current circumstances and situation.

With Netflix, customers do NOT have this CHOICE and they don't have this FLEXIBILITY.

In a free market such as ours, most customers will, over time, gravitate toward a business model that offers them CHOICE & FLEXIBILITY and away from one that doesn't.

I think Netflix is working harder to keep who they have - their selection and turn around time is great

lately (for me anyway) Netflix service has been awful, I pay to have 3 movies out at a time-but this is never the case-because they never have the movies in my que-they are always "very long wait" and this is for the first 8 movies in my que! I mean I can understand the maybe the first 1 or 2 but not eight in a row. And with HD movies I have waited sometime close to 4 months for a movie, I have been corresponding back and forth with customer service- so far all I got was a bonus rental-so I guess BB is the lesser of two evils? anyway that my little rant, take it for what it is.
thetman

Some customers always gravitate to the losing side.

Well if Netflix is consdiered the losing they are doing rather well. Look at the profits for each company. BB has much more revenue coming in but less profit than Netflix. Many of the Blockbuster B&M stores are just dead weight.

When I return my onlines to the store, at least 1/2 - 3/4 of the people there are carrying around their envelopes (which means the physical store is basically not making any money on those people).

But since such stores are 90% fixed cost, they should not care much about that. These 1/2 to 3/4 of the customers cost them very little extra. Moreover, they may occasionally buy a movie or some popcorn and actually generate a little profit. I'm not claiming that this is a profitable move, but the economics of this business is a bit unusual (since producing an extra copy of a movie is essentially free) so that it is difficult to draw conclusions without seeing an actual cost calculation with their internal data.

In a free market such as ours, most customers will, over time, gravitate toward a business model that offers them CHOICE & FLEXIBILITY and away from one that doesn't.
Yes, and this is the reason I think Netflix will be in trouble if they don't come up with something to counteract Blockbuster's push. I don't think Netflix will be going out of business, but I think their revenue will continue to decrease without some advantage to have over Blockbuster. I think everyone agrees that larger HD selection is not going to be a competitive advantage in the near term. That, combined with their previous bad press about "throttling" delieveries to their most frequent customers makes me wonder how much time they really have to recover their business.

Don't get me wrong, I have never liked BB, and I rarely rent from them (2-3 times a year). But, I think their newest service is one that will appeal to most of Netflix's base customers with benefits Netflix can't offer or match.

Don't get me wrong, I have never liked BB, and I rarely rent from them (2-3 times a year). But, I think their newest service is one that will appeal to most of Netflix's base customers with benefits Netflix can't offer or match.

I generally agree, if only Blockbuster had a competant online offering I wouldn't use netflix at all.

Unfortunately they don't, and they still have the damn 'Coming Soon' feature. If blockbuster doesn't shape up with availability I am going to have to go 100% netflix in spite of the in-store bonus.

I generally agree, if only Blockbuster had a competant online offering I wouldn't use netflix at all.

Unfortunately they don't, and they still have the damn 'Coming Soon' feature. If blockbuster doesn't shape up with availability I am going to have to go 100% netflix in spite of the in-store bonus.

I agree. I simply detest that coming soon thing. If my local blockbuster did not carry blurays and was about to receive 300+ more, than I would be using netflix for sure.

But Netflix still has a much larger selection than Blockbuster. I certainly have no desire to physically go to a store. I'd rather just go to the mailbox. I've been with Netflix for over 8.5 years and have no plans to go back to renting the 20th century way.


I love the BB Total Access plan. I get to watch any movie I want when I go to the store on my way home from work and then I can queue it up online and wait for another in the mail. Sometimes, I can use the "float" period and have 3 out instead of 2 as when I return it to the store, it will ship the next one immediately but I still get to keep the trade in for a week. Also the free game rental a month is freakn awesome!

They don't have very many HD DVDs and BDs at the Blockbusters here. I'm 99% done with SD DVDs. So HD DVD and BD rentals are all I really care about. And BB doesn't come close to Netflix. Although even for Sd the two stores near me never had much in stock since they were usually out of stock. That's one of the reasons I always stayed away.


I only need access to aaronwt's library of HDM!

330+ titles

When you starting your subscription service?

OT - but has www.netflix.com been unavailable since last night?

I tried last night, then again this morning and I keep getting:

The Netflix web site is temporarily unavailable.
It is anticipated that the site will be available again at 11:00 AM Pacific time.


The time of course keeps incrementing.

Anyone been in since yesterday afternoon/early evening?

Netflix is fighting back with its Internet downloading services, but their commercial is not that interesting. Pretty odd to see grandpa watching movie on a laptop in bed, IMO.

I watched couple movies from Netflix " Watch Now section" and i was surprised at how good was the video quality. the down side to watching downloaded movies is the lacking of 5.1 Dolby Digital.

Netflix reports first drop in subscriptions (thanks to Blockbuster)

Count me in the group that switched from Netflix to Blockbuster. The Total Access flexibility is great, especially for TV show seasons. I do wonder if the business plan is to ramp sub numbers up to the point where they subsidize the retail stores. Most of the stores in my area are ghost towns.

Some customers always gravitate to the losing side.

Or they've been customers since way before Blockbuster offered online service. I'm sticking w/ Netflix til the end because they were the driving force in ending late fees.

Doesn't really surprise me. The question is, how long can BB continue operating like that? When I return my onlines to the store, at least 1/2 - 3/4 of the people there are carrying around their envelopes (which means the physical store is basically not making any money on those people)
I used to rent a couple of movies per month, so I gave BB about $8/month. Now, I'm on the 3 out plan for $17.99/month. So, I more than doubled my spending with BB each month even though I never actually hand the store any cash when I go in with my envelope and exchange it for an in-store Blu-ray rental. I'm very happy with my service and love the convienence of in-store exchanges.

I used BB total access for a short time here but BB sold all of their local stores to Hollywood Video. After that I saw no point, since Netflix had a larger online selection.

http://www.msnbc.msn.com/id/19932882/

Like it or not, that looks nasty. Their site is still iffy as of now, and that article makes it look like they are in deep trouble.

http://www.msnbc.msn.com/id/19932882/

Like it or not, that looks nasty. Their site is still iffy as of now, and that article makes it look like they are in deep trouble.

Site is back btw

Count me as another Netflix to BB switcher. Simply because of the local BD rentals makes this worth it. My local BB just picked up another 50 or so BD's bringing the collection to something over 100 BD's for local rent as well as what's in my queue.

Between that and going back to watch old 24 DVD's, I'm more than happy to pay the 17.99 which is probably 10x what BB got from me before.

And if I was to look at this financially, I can't tell you how many times I've heard that some lady was pissed she was being charge 17.99 for the last 5 months when she hasn't rented one video in that time period. Simply put they get the first dvd for free, but they never bothered to log-on on the internet to queue up additional movies, they just wanted the free movie that night! All said and told I would say the BB is experiencing 5x-10x more people walking around. If one or two of those new people buy candy or soda, they're making money again.

Competition is good for us, just as much as I love HD-DVD and BD hammering away at each other, I love BB and Netflix giving us good deals in the name of market share.

-Splints

I currently use both.

For a short while, I stopped Netflix after one title and its two replacements were too damaged to play.

With Blockbuster though all of their HD titles either HDDVD or Blu-ray were listed as "very long wait." At the time they didn't even have a definition for very long wait in their help section, and I think the long wait said 4-6 weeks. After a while waiting with no movies I complained and they told me to add more to my queue because I had less than 30. My local store also doesn't have any HD titles.

I then realized that there wasn't enough of an advantage over Netflix since the waits were ridiculous, and I didn't want to trade in a HD title to pick up a SD one.

So now I've switched Blockbuster to the lowest cost plan (so that I still get the monthly free game coupon) and use them solely for children's movies on DVD.
All my new releases in HD are from Netflix.

I can understand the BB attraction, the Total Choice plan is pretty nice.

For me though it is Netflix all the way. I have to have HD DVD disks as my first choice, and they have none in the store near my house, so the whole switch for another disk thing isn't a huge draw for me.

Plus I like the online viewing option. I have watched a number of tv shows (coupling, the office) that way, and it is great. Plus it is good when you need a quick kids movie.

So I hope they manage to hold on to their lead. But if BB can give more for less, then good on them, and they deserve to win.

Or they've been customers since way before Blockbuster offered online service. I'm sticking w/ Netflix til the end because they were the driving force in ending late fees.


Late Fees at Blockbuster just nailed me all the time! Damn Slacker! :D

Netflix has been my friend for quite some time now.

3 out at a time, and my turnround time as been very good, for 99% of the time.

I would go to the 4 out at a time, if they would drop that price plan down.

$16.99 for 3 vs. $23.99 for 4 out, should be changed IMHO.