Netflix to delay renting some new DVD's

[jadedeath]

Originally Posted by repete66211

I don't see how Blockbuster can avoid falling in line with this, if not now then eventually. They don't have the weight they used to and with their shrinking market share I don't see how they can resist the incentive the studio(s) will offer in the way of discounted rental fees.

The studios are already offering them lower rates on movies, in effect Blockbuster is profit sharing with them.

It's in the studios best interest to get people through the doors of Blockbuster, because they make money if people buy, OR rent.

Hollywood doesn't care one way or the other WHERE the money comes from, just that the money comes in.

To be honest, I think they'd rather people rent the movie, and then rent it again from them later as opposed to purchasing the movie and watching it whenever they want {despite what they would have you believe}

Netflix needs to eventually reduce or get rid of the Blu-ray surcharge. Since this "deal" reduces the net cost to Netflix and because it effectively reduces the benefits of Netflix members they should probably reduce fees across the board. I know they're probably dumping a lot of money into the streaming portion of the service, but there just aren't that many people geared up to take advantage of streaming.

That's the thing, Netflix CAN'T reduce money across the board, they'll go belly up in no-time flat.

Logan

[repete66211]

Originally Posted by jadedeath

The studios are already offering them lower rates on movies, in effect Blockbuster is profit sharing with them.

It's in the studios best interest to get people through the doors of Blockbuster, because they make money if people buy, OR rent.

How is this different from Netflix's method of operation? With monthly rather than per movie fees it's hard to give a piece of each rental, but aren't they in effect giving some of their revenue to the studios?

That's the thing, Netflix CAN'T reduce money across the board, they'll go belly up in no-time flat.

Netflix is profitable. They've reduced fees twice in the past so, depending on how much this new deal will save them, they may be able to do it again. But, as with luggage charges on airlines, it's hard to take away a surcharge even after the reason for putting it in place (i.e. Blu-rays are more expensive) is no longer much of a factor.