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ISSUE 121 VOL 2 PUBLISHED 9/28/2007

Online rental services do battle

By David Henke
Variety Editor

Friday, September 28, 2007

The choices confronting a discerning movie-renter these days are myriad in number. In fact, nothing spurs an argument amongst college students like deciding which movie to watch on a weekend night except, perhaps, choosing which toppings said students want on the large pizza they're ordering to go along with the movie.

Movie aficionados can now choose between a variety of movie rental formats, thanks to the proliferation of online mail-order rental companies like Netflix and Blockbuster Online and download services like iTunes and Amazon's movie rental division, Unbox.

Yet, with the advent of these new rental formats, how can we movie renters decide which service to use? We're like Moses and the Israelites; we've finally parted the Red Sea of movie rental stores, but now we're lost in the wilderness of the online rental repertoire.

So, to make our collective decision easier, I've compared two of the big dogs in the world of online rental services and rated them based off of their movie selection, convenience and cost.


First up is Netflix. The company, which began in 1999, is the forerunner in the online movie industry. It invented online DVD rental, and in eight years it became the heavy weight of online rental. It carries a selection of roughly 85,000 different DVD titles and is estimated to ship 1.5 million DVDs a day to its 8.8 million subscribers.

Those are some very compelling numbers, but to compare Netflix and Blockbuster, we'll have to get down to the nitty-gritty.

To begin a Netflix subscription, customers log on their website,, and create a rental queue - a list of movie titles that the customer chooses from the company's selection. Then, the customer selects from a selection of flat-rate monthly plans. The plans differ in the quantity of DVDs that the customer is allowed to take out at one time. For example, a four-DVD-at-a-time plan costs $23.99 a month, while a one-DVD-at-a-time plan costs $8.99. Each plan allows you to trade your DVD's in an unlimited number of times each month.

Once you select a plan and add some titles to your queue list, Netflix will automatically begin mailing you the titles on your queue in the order that you selected. Unless you live in very remote location, the company claims that you'll receive your selection within a business day of the request. When you're done watching a particular movie, you can mail it back and Netflix will send you the next movie listed on your queue, easy as pie. Also, shipping is free for the customer.

Netflix also has an "Instant Viewing" option that accompanies their mail-order DVDs. Each one of the rental plans includes a specified amount of viewing hours on your PC. Depending on the plan you sign up for, you'll receive anywhere from five to 24 hours worth of instant streaming video.

All of that sounds dandy, but there is a downside to Netflix services. My biggest gripe with Netflix is that their Instant Viewing option is not up to snuff. Currently, they only have 5000 online TV episodes and movie titles to select from, and users downloading streaming video on the St. Olaf network will have to wait for those long "buffering" load times. Also, the service only runs on systems operating on Windows XP Service Pack 2 or Windows Vista with a broadband internet connection. Sorry, Mac users and those with dial-up internet, you'll have to wait until the company expands its Instant Viewing services before you can take advantage of any online content.

Netflix one-business-day mailing system has its flaws as well. In 2004 a lawsuit was brought against the company for false advertising concerning their mailing claims. The class-action case never concluded, but Netflix acknowledged that "throttling" - a practice in which high-volume customers experience slower shipping rates - commonly occurs.

In reality, customers can expect at least a two to three day turnaround between movies, and if a specific distribution point doesn't have any copies of your title in their stock, you may wait for as long as a week to receive your next movie.

Blockbuster Total Access:

Blockbuster was the second major company to throw its hat in the online DVD rental ring. The current version of their online rental system, Blockbuster Total Access, was unveiled in the last quarter of 2006 and now boasts 3 million subscribers. It carries roughly 75,000 titles, which means that it lags behind Netflix in variety. Though Netflix has the Total Access system beat for selection, Blockbuster is rapidly expanding its online rental platform. Earlier this summer, the company announced that it will be closing 282 of its stores across the nation to support its heavy spending on its online system. Expect the company's Total Access service to improve as Blockbuster shifts its focus to online rental.

At first glance, Blockbuster's rental format looks remarkably similar to Netflix's system. Customers select their desired movie titles, add them to the list, and Blockbuster ships them out with little or no fuss. Both Netflix and Blockbuster have easy-to-navigate websites that speed up the sign-up process considerably, and both companies will let you keep the DVDs you've ordered for as long as you want.

Like Netflix, Blockbuster ships its movies to you in one to two days and, because the company already has more than 5000 stores in the U.S., it's more likely to get your selected titles to you faster.

That said, Blockbuster's rental plans are marginally more expensive. An unlimited, one-DVD-at-a-time plan costs $9.99, while the company's largest plan, a three-DVD-at-a-time option, is $17.99. However, these plans include in-store return policies-a feature which gives Blockbuster a leg-up over Netflix. And, like Netflix, you can trade your DVD's in an unlimited number of times each month.

The in-store return policy means that a customer can return his or her DVD rentals to one of the many Blockbuster store locations. In exchange for returning the DVD in its return mailer, the customer receives a free movie rental from that store, up to the total amount of free rentals specified by the monthly plan with which the customer is currently subscribed.

If you're subscribed to the three-DVD-a-month plan, you are allowed five free DVD rentals per monthfrom a store location, provided that you drop off your mail-order movies when you visit the store.

Five free DVDs sounds great, until you realize that the nearest Blockbuster store to St. Olaf's campus is almost 19 miles away, in Apple Valley. Furthermore, Blockbuster, as of yet, does not offer any streaming video for subscribers. Ouch.

Judgement Day:

Well, the tallies are all in, and it looks like Netflix has taken this round. Blockbuster looked good on paper, but since its lovely free-DVD option is outweighed by the 38 mile round trip you'd be making to use it (unless you travel to Apple Valley frequently for work or family), Netflix's cheaper rates and bigger selection are more advantageous for movie fans.

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