In 2010 we all go 100 miles per hour at all times. Many of us cannot find the time to drive to a video store and rent movies so they turn to either Pay per view Cable or DirectTV or the newest power player Netflix. The combination of PPV and Netflix is driving video rental stores out of business.
Hollywood video– which serves the more urban areas around the nation, and Movie Gallery– which serves the rural areas, are filing chapter 11 bankruptcy and are closing an estimate of 1,900 stores. Hollywood Video and its subsidiaries simply cannot compete with Netflix and Redbox. With their “Watch as many movies as you want! For only $8.99 a month.” Plan Netflix is cheaper than the popular video chains…and is therefore a significant competitor.
Blockbuster Video is also suffering due to Netflix. In an effort to improve business, they have established their presence on TiVo. Now, customers can download movies to their TiVo from Blockbuster (only on certain models of TiVo). This effort has failed to provide the boost that Blockbuster hoped for namely because of Netflix’s presence on TiVo. Customers with the Netflix unlimited plan ($8.99 per month) can download movies and TV shows to their TiVo. In addition to this, Netflix also offers streaming movies to the Sony PlayStation 3 and the Nintendo Wii
In April of 2006, Netflix filed a suit against Blockbuster alleging that Blockbuster infringed on two patents that Netflix owned. One of which covered Netflix’s queue system and the ability to rank and reorder the list. The second covered the mailing and communication with the customer. In June of the next year, the issue was closed and both parties refused to disclose the results. Was this an action undertaken by Netflix to protect their rights, or was Netflix trying to crush one of its top competitors.
When you drive to a Local Video store (if you can find one) and what do you find? Well, the more recent movies in the popular genres. However these Conventional Video stores simply do not have the space required to maintain a stock of movies that can even come close to that which Netflix offers. Try searching for a movie that you don’t think you’ll find, well chances are that you will find them with Netflix. This is a big problem for video stores. For an old-time movie buff who enjoys watching movies from the 70’s and 80’s it is simply a deal breaker to not have want we want.