NetFlix vs. Blockbuster & Movielink?

Posted Mar 1, 2007


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Netflix, Inc. (NASDAQ: NFLX) started its subscription service in 1999 and reached a million subscribers faster than America Online. Their model was simply successful. Eight years, 5.7 million members, and 75000 titles later both Wal-Mart and Blockbuster received a wake-up call that in terms of video rental, they may not have the most streamlined supply chain.

On December 20, 2006, TechCrunch wrote about how “Blockbuster changed the service in a way that can really hurt Netflix. Movies received by mail can be returned directly at any Blockbuster store. You get a free rental on the spot, and Blockbuster still sends out the next movie in your queue. And yesterday they announced that the monthly coupon for a free rental can be used for movies OR video games.”

Early this year, NetFlix then announced that its customers would have access to streaming movies and television shows including Steve Carell’s The Office and tv/movie studios wanted in on the new Netflix model including NBC, Sony, Fox, Paramount, Warner, and New Line Cinema.  Amazon created Unbox to compete with Google and iTunes streaming video also. Netflix followed and now Blockbuster wants in as evidenced by its reported talks with buying Movielink (formerly known as Moviefly), a streaming tv/movie website. For how much? Possibly under $50 mill in cash and stock according to PaidContent.

What exactly is Movielink, LLC? Movielink is a private venture between Paramont, Sony, Universal Studios, and Warner Brothers. Information regarding how many movies that have been streamed on Movielink or how many customers is a mystery to me, but obviously its worth a pretty penny to Blockbuster. As more information fleshes out, I’ll ensure to report it.