Learn Lessons From The Giants – Netflix vs Blockbuster

Entrepreneurialism Reviews

There is a lot that can be learned from the Online DVD Rental Service battle that has been going on for the last several years between Netflix and Blockbuster. Netflix was the first to introduce its service in 1999 and has worked their way up to having a DVD library of over 70,000 titles. Just when it looked like they were running away as the leading DVD rental site, Blockbuster (the more established brick-and-mortar company) launched it’s own competing service in 2004. Even with Blockbuster’s 5 year lag, they have quickly caught up and have the added benefit of all their store locations to really give Netflix a run for their money. Today, Blockbuster also has over 70,000 DVD titles, ships in 1 day and they distinguish themselves by allowing customers to rent online and in-store. To appeal more to larger families, Blockbuster added a free video game rental per month that Netflix is unable to offer.

Which Service Do I Use?

Although I often work 12 hour days, I am a firm believer in finding a balance between work and play so to relax at nights and on weekends I enjoy watching movies. I recently signed up for Blockbuster and have not looked back since. It helps that there is a Blockbuster a couple miles from my house so I usually order online, but have the option to exchange in store if I want a movie right away.

Business Lessons From The Netflix vs Blockbuster Battle

Just because an existing company occupies a niche doesn’t mean you can’t enter the same niche and take over some of the market share. It takes a very creative spin on the business and value you bring, but can easily be done. In an age where Walmart and Amazon could not compete with Netflix, Blockbuster took an outside-the-box approach and have created a very valuable service for customers and a new business model for themselves.

  • If you’d like more details about Blockbuster, you can do so here.
  • If you’d like more dtails about Netflix, you can do so here.

Which DVD rental service do you use? I’m curious to hear about your experiences. Please share them in the comment section.

27 thoughts on “Learn Lessons From The Giants – Netflix vs Blockbuster

  1. I chose Blockbuster. Prices and selection were just about the same between the two. What sold me on Blockbuster was free rentals at the store for each mailed movie I return there. It’s like getting twice as many rentals per month. If there is a movie you get a sudden urge to see you take in a mailed movie and get the new one. No fuss. Then you get an extra rental coupon for the month as well.
    It’s been great. I use the mailing service for old and obscure movies and trade them in for something newer in the store. Easily beats Netflix if you live near a Blockbuster. If not then there would be no difference, of course.

  2. Hey Jane,
    Thanks for the comparison. I’ve tried both and prefer Blockbuster. Some of my friends have Netflix and are too lazy to switch but wish they could go with the in store rentals like I can. haha.

  3. Blockbuster reportedly filed an antitrust counterclaim in federal court on Tuesday, stating that Netflix is attempting to monopolize the online rental business. Blockbuster belives that the online movie rental service’s lawsuit is based on unenforceable patents…
    Blockbuster currently has around 1.3 million subscribers, and is trying to gain ground on Netflix, which has nearly 5 million subscribers. Blockbuster has online rentals part of it’s normal business, as in-store sales could drop 25% by 2010.
    (In answer to the question I posted.)

  4. I have tried both and love Blockbuster. With Netflix you have to wait for your movies and Blockbuster all you have to do is take your mail in and get one in return. It is great I’m not looking back.

  5. I would so take you up on that offer for the $15, but I no longer live in the U.S.
    When I did though I used to rent from blockbuster all the time, how couldn’t I? I lived like 2 blocks away from one!

  6. I have both, while the Blockbuster has the added benefit of drop off at stores, it still takes TIME to go to Blockbuster and pick the flick. Time = money=girls= well you know. Blockbuster is slower to do mail turnarounds as my station is 65 miles away. takes 4 days to do a turn around. Net Flix about 3. Which means more movies. Net Flix 3 plan is a little higher then Blockbusters 3 movie plan.
    The quality of Block Buster DVDs is generally less then those of Net Flix. These puppies see some heavy use and are Net Flix seems just a bit higher quality then Blockbusters. Some are a little reluctant to play. Clean them up and most go. It’s a toss up, if you want to go to the store, then blockbusters edges it out. Get both and never go to the store again.

  7. I tried Netflix and had no problems with their service except almost every DVD I rented had been overused and would halt here and there. When I heard about Blockbuster’s return in-store for a free movie, I switched. I haven’t had any problems and will stay with Blockbuster. I also like the E-Coupon I get once a month for a free in-store rental and their unlimited rental coupon that I received this month for $1.99 in-store rentals until roughly the end of May.
    Prior to joining Blockbuster online, I hadn’t set foot in one in the past few years because they were brutal on their late fees and did not have 5 day rentals. Now they have 5 day rentals and overnight rentals. Both types of in-store rentals have a 7 day grace period. However, if you go about 4 days into the grace period, you get an automated call reminding you to return the movie to the store or you will be charged the full price of the movie after the grace period ends. So, Blockbuster really redeemed themselves in my eyes. I guess you could say they are a more kinder, gentler Blockbuster now.

  8. That’s handy. I was about to signup for Blockbuster online this week. I agree they have a nice value proposition. Online when I’m feeling lazy, in-store when I feel the need to get out and have some stimulation.

  9. I have been a loyal Netflix customer for a couple of years, until recently. I have to agree with Yvonne that many of their discs are “overused”; dirty or damaged is more like it. I almost routinely pre-wash the disks I get from Netflix to get the junk off the surface in order for the movie to play consistently. Others show up looking like they were used in a frisbee tournament.
    I am VERY particular about the way I handle optical discs. Its obvious most of the public IS NOT. Netflix is lacking in basic quality control measures as far as cleaning discs, or removing them from their collection once they have become obviously damaged. They rely on their customers for basic maintenance of their product.
    In their defence, Netflix has a good policy of immediatly re-issuing discs when one is reported unplayable, but that does not help when you have anticipated an evening with a favorite movie.
    Netflix has also been unresponsive to my inquiries as to why their website keeps slamming (shutting down) my web browser, completely, almost every time I use it; an obviously unacceptable situation. I like many of the features on their site, and it has shown considerable development from when I first used it, but their web people have not responded to my distress over this issue. This is the only website from which I have experienced such a shut down.
    Sorry NETFLIX, but I’m moving on. Good luck with your legal ramblings, but competition is a good thing. Maybe you’ll clean up your site problems, and even your discs!
    PS. I have no affiliation, legal or otherwise, with BlockBuster, at this time.

  10. I’m a Netflix user and have been seriously thinking about switching back to Blockbuster. I used to be a Blockbuster member but crossed over to Netflix simpley because I could keep the videos as long as I wanted to.
    I stay extremely busy and wasn’t always able to watch the videos in the time that was given me. I remember returning quite a few unwatched Blockbuster videos.
    I found out about their service due to the mailman delivering my neighbors selection in my mailbox. I returned it. Blockbuster, for me, is extremely appealing since I have the option of mailing it in or simply going to the store.
    I think you just sold me with the video game rental. I’m an avid gamer. I use the xbox and xbox 360.

  11. I choose Netflix, mostly due to the fact that you are unable to rent any NC-17 movies with Blockbuster. I understand they don’t rent NC-17 movies in their stores, but why not offer those selections online. So until Blockbuster stops censoring what I can watch, I will stick with Netflix.

  12. The applicability of the comparison has been lost (in some part that is my fault). But let me warn AlMac that when Blockbuster gets the right movie in the right jacket (I had major problems with that a few months ago!), the discs are more likely to be unplayable than ones from Netflix. It is cheaper for both to send out replacement discs than to clean the stock before sending it out again. The “general public” is indeed careless with rented discs.

  13. I been with Netflix for about four to five years, sure few time I have problem with the disk about 5% overall, I tell them about it and they take care. Blockbuster, I say they will do the same. In the past I use to go to Blockbuster to pick out movies but end up staying in they’re looking for about aft hour to hour or more. You don’t realize till you walk out. So if I can save gas and time, I say go either one cause they both give you movies you want to see and return it when you ready. It depends on people scheduled.

  14. We have used Blockbuster for awhile now and love it! I have 3 kids so always having a stock of new movies around is a plus. We were very excited when they implemented the in store exchange program. It was a brilliant idea!
    Now, our local store has lengthened the time you can keep a movie. At first I was frustrated that they kept changing things around, but I think they were just trying to see what worked. I have been very satisfied with their service. Kudos on Blockbuster contacting you!

  15. To whom it may concern: We have been with NETFLIX a lot longer than BLOCKBUSTER but have been using the BLOCKBUSTER dvd rental service for almost a yr now and we just recently canceled BLOCKBUSTER due the the fact that not only did we receive too many damaged DVDs but we were paying for the 3 @ a time & only 2 would be listed plus; the whole purpose in using the service in the 1st place was to cut down expenses and, altho it was your choice whether you took them to a BLOCKBUSTER store or not, if you did, then that was added expense
    In comparision, NETFLIX to us has always been more reliable & has a much better choice ……and no, we are not afiliated with NETFLIX!! lol
    Thanx 4 the opportunity to comment!

  16. Times are changing. With IPTV soon to hit the consumers you won’t need to go to any stores or order movies online. You will be able to watch TV offered on the Internet (Broadband) by any content provider. Hopefully, Blockbuster is considering changing their business model again. With enough servers in place they can become a content provider of movies. They can become their own On Demand service. I’m sure there are some legal logistics to work out with the movie makers and whomever else they distribute online but I’m sure they already have something in place with those very companies. The Internet has to be THE most life changing entity of our time.

  17. Netflix. Delivery is prompt. Never had a problem with discs. My time and gas cost money, so having a store around is not important. I’m not a big movie watcher, so I have minimal service and always have a movie I haven’t seen laying around for when I have the time.

  18. I have been using Blockbuster Online since November 2006, and I am very pleased.
    In the first month, I did have one delivery problem and was very impressed by the level of customer service provided. I was assigned a customer service rep who personally and promptly responded to my inquiries and followed up with several e-mails until the problem was resolved. It has been smooth sailing ever since, and I have encouraged all my family and friends to sign up.
    Another perk that I have noticed recently: When I exchange a DVD in store, Blockbuster Online sends out the replacement DVD from my queue the next day so there is no mail delay.

  19. We are using Netflix and quite happy with them, especially now when they have Movies Online service, so I can just watch movies on my computer without even waiting for them

  20. We just got a Netflix brochure in the mail today. How appropriate.
    Fun Games Videos – I didn’t know they had a movie online service. That’s how I watch tv these days. Interesting. I think I might check that out.

    1. Julie, I found it myself without any knowledge about – they just added a new tab “Watch Now” on their web-site.
      Yes, tv on the web is very comfortable :), I agree

  21. Very true you can enter into any niche you like as long as Mr – Mrs – Miss Currency is standing behind you on it.

  22. I have done both! I used netflix for about a year until I move into a new apartment. My DVDS were being stolen out of the return mailbox in my building and 3 disc were lost in the USPS boxes so I gave up! I now just got to Blockbuster stores to rent and avoid the whole mail issue..

  23. I tend to buy copies when they are a couple of months old and the price falls, havent rented for years… video on demand is the future for this market, but not really available in the UK, not sure about the states….
    I have heard the torrentz sites are popular for films too

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