Wednesday, January 26, 2005
Analyst predicts Netflix will cave in to pressure from Amazon
Per this article in CBS Marketwatch, William Lennan at W.R. Hambrecht is saying that Netflix will have to cut prices again, due to pressure from Amazon.com. "In Lennan's view, Amazon is likely to enter the U.S. market this year with an online DVD rental service priced as low as $13 for up to six DVDs a month."
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Six DVDs a month? Oh yeah, that'll have Netflix quaking in their boots.
ReplyDeleteI hate to say it but with all the problems that NETFLIX has, I don't think 6 DVDs a month for $13.00 is going to have any effect on any of the competitors (BLOCKBUSTER, NETFLIX, WALMART, etc.). If this is the best AMAZON can do they are going to be surprised when nobody signs up for their service.
ReplyDeleteThe big thing netflix has is those distribution centers all over the place. I am in Raleigh, and all my movies come from Greensboro. The turn around for a new moview is really quick: 2-3 days.
ReplyDeletei've noticed, anything written by Herb Greenberg on Marketwatch is anti-Netflix...
ReplyDeletewhen i see his face appear onscreen, i think "uh oh..."
i wonder if Netflix can keep its current pricing system, because from what i hear/read, Netflix's service is so much better than the others.
ReplyDeletelike someone else said, 6 discs/month isn't too appealing. and a friend of mine recently switched from Blockbuster to Netflix because the discs arrive so much faster...
Netflix has a reputation for good service (Friends, Recommendations and Profiles only enhances this) and i think there's a good chance people will pay for good service.
The Amazon approach in England limits the number of dvd's per month and the hypothetical 6 dvd's for $13.00 does not match up to the reality of the very fast delivery of Netflix dvd's whereby you can easily receive between 9 and 12 dvd's a month. Prorated that means that Amazon would be effectively charging 19.50 for nine dvd's and $26.00 for 12 based on the usage figures.
ReplyDeleteThe number of titles in the Netflix Portfolio seems to be growing dramatically. Currently, I have 126 titles in my queue. That means that without additions to the queue, I'll be watching at least eleven months worth of product over the next 10/11 months.
Before 2005 is over Netflix will be doing selective advertising (my opinion) for various entities and receiving good revenues. In addition, the fixed number of discs might provide a new market for them, and with their fulfillment operation, they could easily become the drop shipper for various Amazon or other entries products in the dvd arena for a substantial revenue fee.