1. NetFlix's current subscriber base of two million plus.
Despite churn issues, that's a sizable audience. Plus, NetFlix has a large database of former subscribers who could be re-targeted.
2. Name brand.
Blockbuster would benefit from the NetFlix brand name, which has a strong
association with online DVD rentals. By using NetFlix, Blockbuster could distinguish its online service from its retail operation. If you don't think that's important, ask Borders and Barnes & Noble.
3. Preventive medicine
By acquiring NetFlix, Blockbuster would ensure that its rival was not gobbled up
by a larger company, such as Amazon, which would give Blockbuster an even more
formidable foe in the future.
Do you think it's hogwash? Or will it happen?
I embrace all online movie rental services! I'm a capitalist. I believe free markets and vigorous competition benefit the customer.
ReplyDeleteDitto, Becky.
ReplyDeleteI started using Netflix after Blockbuster bought/forced out the competing video rental stores in my area. Did BB then provide better selection and service? Hardly. Nor did they feel pressured to cater to the local demographic (mostly University students and faculty) so it wasn't long before little red envelopes started appearing everywhere. And thank goodness for that. I also tried Blockbuster's online rental service but found it lacking and canceled 10 days into my two-week free trial. That was 2 months ago and I'm still in a billing dispute with them. A billing dispute over what was promised to be a free trial, mind you.
If Blockbuster consumes Netflix, I have NO illusions about the quality of service we would get. Competition is necessary, although increasingly rare, and I hope Netflix stays in the game as long as possible.