Blockbuster threatens Netflix movie monopoly

Longtime movie rental giant Blockbuster is threatening to overtake Netflix in the online rental market, thanks to its network of retail stores across the nation. Both Netflix's and Blockbuster's services operate similarly. Customers go online, choose a subscription plan of between one and eight DVDs per month, pick out a "queue" of movies, and within a few days DVDs are shipped via mail in paper envelopes. DVDs can then be slipped back into the pre-stamped envelope and dropped in the mail. Netflix, which was the first to enter the online movie rental market in 1999, currently has the most subscribers at 6.3 million. Based in San Jose, Calif., Netflix is considered the movie buff's choice for rentals with a wide selection of foreign films, documentaries and other rare finds. Netflix recently unveiled an online movie streaming service, allowing customers to watch an allotted amount of hours of movies per month. Customers can skim over movies before requesting the DVD or watch entire movies online. The service is currently being introduced to select customers and does not yet work on Mac OS X. Blockbuster has struggled to overtake Netflix with its online services with only 1.5 million subscribers - a fraction of Netflix's subscribers. But its number of subscribers increased by 50 percent in the past year, prompting industry critics to predict Blockbuster could overtake Netflix in coming years.

Blockbuster's advantage over Netflix lies in its old school retail stores, which serve as alternative distribution centers allowing customers to exchange their DVDs for an in-store rental or just mail them back. Blockbuster also offers customers a coupon for one free in-store movie or game rental per month. The plan offers flexibility for customers who want to receive movies in the mail but also have the freedom to rent movies on a whim. Most students said they prefer Netflix over Blockbuster. "Theoretically, Netflix revolutionized movie rental just as the iPod revolutionized really long walks around campus," said Zac McGovern, English junior.

"Personally, I had a lot of catching up to do with a lot of classic films, growing up in a somewhat sheltered yet altogether nourishing environment." Some said online movie rentals are more cost-effective. "The monthly cost is very worthwhile as long as you rent enough movies to cover the cost that you would spend at a local video store," said Vasanthi Manimaran, dietetics student. "I definitely think it is more cost-effective than to rent from a store like Blockbuster if you watch movies frequently." Others just enjoy the steady stream of mail. "At first I got into Netflix because I wanted mail, and one weekend I didn't have my car," said Alice Green, history senior. "Their selection is better if you're looking for older movies and lots of TV series. And I liked looking forward to having something in the mail." But Mary-Clare Cook, agricultural economics senior, said she chose Blockbuster for its in-store rentals as well as online rentals. "Blockbuster offers its store as well with monthly coupons for free rentals if you don't feel like waiting for the mail, and now they offer the option to bring the mailed movies in for a movie in the store," she said. Some Netflix subscribers have been tempted by Blockbuster's in-store coupon carrot. "I have indeed been intrigued by the new Blockbuster deal; however, I think the point of the online rental is that it's quick and convenient, and you don't have to go into a store," political science sophomore J. Taylor Johnson said.

----- Contact Sarah Yokubaitis at syokubaitis@lsureveille.com