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With higher demands for movies in a short amount of time, Netflix, the world's largest online DVD rental service is gradually giving Blockbuster competition. Netflix was established in 1997 in California by Marc Randolph and Reed Hastings. Netflix contains 90,000 titles with 6.7 million subscribers. On an average, Netflix ships 1.6 million discs in a day. In order to subscribe to Netflix, one must pay a monthly service. One of the most popular services is renting up to three DVD's at a time. This plan costs $16.99 plus tax. Instead of renting a movie for five days at Blockbuster for $6.99, Netflix allows its customers to keep the rented DVD as long as they wish. In order to receive the next DVD, one must first return the DVD's they rented in order to get the next intended batch. The DVD's are delivered through the United States Postal Office. Other plans for Netflix subscription include: $4.99 for one disc at a time and $47.99 for 8 discs at a time. The success of Netflix has given competition to Amazon.com, Blockbuster Video, and Hollywood Video.
One of Netflix's big competition is Blockbuster Videos. Because of Netflix's online subscriptions, Blockbuster began its own online DVD rental subscription program. However, on April 4, 2006, Netflix filed a lawsuit against Blockbuster for violating two of their patents. The lawsuit was for two cases. The first case is that Netflix believed Blockbuster copied the dynamic queues for each customer and the second accusation was that Blockbuster copied Netflix's way of communication and delivery. Due to this increasing competition, Blockbuster has planned to close many of its stores to focus on its online service. As of 2008, Blockbuster has closed 290 of its stores in order to focus on a Web perspective.
Although Netflix has had universal success, it had a major setback in 2004. In September, 2004, a consumer filed a lawsuit against Netflix. Frank Chavez, a local San Francisco consumer, filed a lawsuit saying Netflix used false advertising. The false advertisement was for Netflix saying it claims to "unlimited rentals" and "one-day delivering." The trial has been lengthy and in the California Appellate District, no formal decision has been made and a settlement benefit could take one to two years.
John Hayden, a junior at Signature School, says, "Although Netflix has a waiting policy, it is more convenient to order movies online instead of driving out in the cold. Although YouTube has movies online, Netflix provides better quality movies." Teacher Erin Atkinson says, "It is more convenient to put movies in the mail and Netflix has a better movie selection. Netflix offers movies that are not available in Evansville and has no late fees."
Sources:
http://www.netflix.com/
http://www.netflix.com/HowItWorks
http://www.netflix.com/Settlement
http://www.bivingsreport.com/2006/the-great-debate-netflix-vs-blockbuster/
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