Online DVD Wars: Blockbuster Follows Netflix, Again
Motley Fool, the fun-loving investment hounds, have been following the online rental wars of Blockbuster and Netflix, with a recommendation for Netflix and a raspberry cheer for Blockbuster. Users of Netflix's online DVD rentals were upset to discover that Netflix throttles renters who turn around DVDs quickly to save on postal costs. The Fool showed its profound investing wisdom and wit as it stated:"If you're blazing through 20 flicks a month on Netflix, you'll do it a favor by going to Blockbuster and knocking that company one step closer to bankruptcy."
Today Blockbuster has announced it is following Netflix's lead. It also will slow down users who return their DVDs quickly. Motley Fool once again elabarorates:
Because of postage costs, revenue-sharing deals, and the costs to acquire DVDs, Netflix is more than likely losing money on you if your monthly disc-viewing habits go into the double digits.
Well, it turns out that Blockbuster doesn't want to keep the busy beavers, either. It is now proclaiming its throttling ways as well on its terms and conditions page. Blockbuster is revealing that it takes the rental volume of its subscribers into account during the allocation process.
It would seem that Blockbuster does have a thing about losing money after all. Now if they could just catch a little more of that profit-maximizing spirit and focus it on their stores.
Photo by theoriginalbman
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