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Making Sense of Mail-Order DVD Services

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I originally wrote this at the beginning of February 2005 and this is a semi-major update to the original, please let me know if I messed things up or if you have your own opinions you’d like to share.

First, Netflix burst on the scene with a totally different business plan – let folks borrow movies via mail and keep them as long as they want. You charge a monthly fee based on how many DVDs they want at a time and you pay the shipping each way for the disc. Sounds horrible! Mail is so slow! But people bought into it and slowly, as distribution sites increased in number… bam! DVDs come in a couple days instead of a week. Gone are the complaints of slow mail-times and in come the competitors. I’ve personally used Netflix and I think it’s a great service with quick turnaround times and a huge inventory of movies.

But let’s compare the Big Three Two (Walmart cancelled their program and now offer Netflix) players in mail-order DVD rentals… Netflix vs. Blockbuster vs. Walmart.

Free Trials

  1. Walmart – 30 days
  2. Netflix – 2 weeks (14 days)
  3. Blockbuster – 2 weeks (14 days)

DVD Service Plans

Vendor 1 DVD/mo 2 DVDs/mo 3 DVDs/mo Custom
Blockbuster $9.99 $11.99 $14.99 5 @ $27.49, 8 @ $37.49
Netflix $9.99 $11.99 (limit 4),
$14.99 (unlim’t)
$17.99 5 @ $33.99, 8 @ $39.99

Distributions Centers:

  1. Netflix: (updated 4/11/05, courtesy of Listology) 40 (up from 29) [Baton Rouge, LA; Bedford Park, IL; Birmingham, AL/Duluth, GA; Carol Stream/Chicago, IL/Milwaukee, WI; Chattanooga, TN; Cleveland, OH; Columbia, SC; Coppell, TX; Daytona, FL; Denver, CO; Flushing/White Plains, NY; Ft. Lauderdale, FL; Gaithersburg, MD/Easton, MD/Harrisburg, PA/Richmond, VA; Greensboro, NC; Hartford/Worcester, MA/White River Jct, VT; Honolulu, HI; Houston/Austin, TX; Indianapolis, IN/Bowling Green, KY/Louisville, KY/Dayton, OH; Kansas City, MO; Lakeland/Tampa/Ft. Myers/Orlando, FL; Lansing, MI; Las Vegas, NV; Manchester, NH; Minneapolis, MN; New Brunswick/Newark, NJ; Oklahoma City, OK; Orlando, FL; Paducah, KY; Phoenix, AZ; Pittsburgh, PA; Rochester, NY; Salem, OR; San Jose/San Francisco, CA; Santa Ana/Fresno/Bakersfield, CA; Southeastern/Philadelphia, PA; Spokane, WA; St. Louis, MO; Stamford, CT; Tacoma, WA; West Sacramento, CA]
  2. BlockBuster: 23 [Atlanta, GA; Charlotte NC; Chicago, IL; Cleveland, OH; Dallas, TX; Denver, CO; Edison, NJ; Gaithersburg, MD; Houston, TX; Lansing, MI; Miami, FL; Minneapolis, MN; Flushing, NY; Philadelphia, PA; Phoenix, AZ; Sacramento, CA; San Jose, CA; Santa Ana, CA; Seattle, WA; Stamford, CT; St. Louis, MO; Tampa, FL; Worcester, MA]
    3. Wal-Mart: 9 [Bentonville, AR; CA; GA; Indianapolis, IN; Macclenny, FL; NV; Johnstown, NY; Williamsburg, VA; Seattle, WA (Tacoma)]

Little Tricks

1. Netflix – One of the great parts of Netflix is how hard they will work to keep you as a customer. There are hundreds of stories about how they extended the trial period to 4 weeks when you try to cancel (thus propelling it to number 1 for trials) and dropping the price of the 3 DVD program to under $15, some have received offers of $12. or less if they agreed to a six month commitment. Some users have been noticing that these offers are as forthcoming, especially with the recent price drop of the 2 DVD rental price to $14.99. In an interview with the CEO, Netflix revealed the cost per new customer was $30-$40 ($38 in Q1 2005), so use that information to your advantage.

Also, because Blockbuster is big and mean, Netflix has an almost grassroots following of fanatical advocates (just kidding). You can find a couple of them at HackingNetflix where they actually tell you about new Netflix features and how to best utilize the service. It’s a great site.

2. Blockbuster – Unsure if this code still works but reported to give a four week trial instead of the typical two week trial: ff456.

Consensus Winner

You, the consumer. Try out all the services and see which one works best for you (that’s what the trials are for). Some folks live right next to the Netflix distribution centers so they get movies in a day, some enjoy the two free Blockbuster rentals, and some just want the lowest cost and like Walmart. If you consider that renting a DVD in a store will cost you about $4 for 5 days (plus late fees!), these plans are considerably cheaper but it’s a tradeoff. If you don’t watch many rentals, it’s not for you. It’s like a buffet, if you’re going to stuff yourself, then a buffet is for you. If you only want one thing and only one thing, it’s not for you.

{ 4 comments, please add your thoughts now! }

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4 Responses to “Making Sense of Mail-Order DVD Services”

  1. Ace Wags says:

    I used both Netflix and Blockbuster, but I prefer netflix, I think their selection of DVD’s is more expansive than Blockbuster. Can’t speak for Walmart, but I heard they don’t carry certain titles for “moral” reasons.

  2. OL says:

    I’ve used Netflix for a couple years now and managed to get started when they let you have 4 DVD rentals out at a time. They’ve grandfathered us, so we still get 4 DVD’s at the 3 DVD price. Not a huge thing since we don’t watch a ton of movies, but it showed that they cared about keeping customers. Many other companies would have just bumped customers down to the 3 DVD package.

    –OL
    http://optimizedliving.com

  3. Matt says:

    I tried blockbuster first, but was immediately disappointed with the selection and service. I know some folks who ran the numbers on Netflix during the early days and proved it wasn’t worthwhile…but that was when they only had a couple of distribution centers and turnaround times were long…I’ve been quite happy with their services.

  4. nickel says:

    Blockbuster sucks. And you have to be very careful with them, as participating in one of their promos may result in a higher monthly fee ($17.99 instead of $14.99) — see here for details.
    fivecentnickel.com


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