With the advent of Download Now online movie rentals, millions of net users are signing up for the service. This concept was invented by NetFlix way back in 1999. The pioneers are still the leaders but are facing tough competition today in the form of IntelliFlex and BlockBuster. All the sites, today, claim free shipping, unlimited number of online movie rentals in a month, a large collection of the latest movies and no time limit for keeping the movies.
However, these newcomers provide video game rentals whereas NetFlix only specializes in online movie rentals. Additionally, IntelliFlex provides an array of adult online movie rentals attracting those who have a penchant for adult entertainment also.
To fight the 4500 retail stores that BlockBuster has, which it uses for promoting and advertising its online movie rental services, NetFlix has now tied up with Wal-Mart. The veteran is now using Wal-Mart’s brick and mortar presence to augment their efforts for the online movie rental services. In spite of the large presence on the ground, BlockBuster is now likely to find that contending with the innovator is not likely to be cakewalk. They give away two printable coupons per month for in-store game or movie rentals and also design discount schemes and privileged deals.
To combat the leader in the online movie rental industry, BlockBuster offered a rate approximately 3USD cheaper than NetFlix when they launched their service. However, over time they have increased the rates to match those of NetFlix. IntelliFlex still operates at a dollar lower than the other two.
The opportunity to be able to see a large number of the latest movies at rock bottom prices seems like a dream come true. But this dream lasts only for a temporary period for the online movie rental subscriber since the companies realize that sending so many movies in a month would not be profitable for them. The heavy users of NetFlix seem to have realized that they were being throttled. The movies that they asked for were not being sent to them on time. The online movie rental site claimed that they had not received their movies back and so could not send the next lot of three. This seems to be occurring mostly with heavy users of the service since they probably rent more movies in a month than what the site has budgeted per subscription. At the same time the online movie rental sites are not in a position to state that they will restrict the number of movies rented since competition is tough and ‘unlimited’ sounds so much better than a constricting number. Loyal consumers of NetFlix are feeling cheated and blogging heavily on this topic.