As I noted elsewhere, Amazon's entry into the DVD delivery business scared Netflix to lower its prices. It has also made WM reevaluate their own strategy:
The other key player in the market, Walmart.com, the online service from Wal-Mart Stores, said last week that the company was evaluating its own pricing strategy, having gone from offering the lowest to the highest price in a matter of about 10 days.Sometimes the threat of entry is enough to lower prices! Also important:
Walmart.com has been quietly building its DVD rental service since its debut in June 2003. Kevin Swint, Walmart.com's director of entertainment and photo, would not disclose the number of DVD rental subscribers the company has, but he said that business had "grown beyond our expectations."The structure of sales is crucial to understanding price differences.And despite the price cuts from Blockbuster and Netflix, Walmart.com's service remains the least expensive in at least one regard, Mr. Swint said. It offers a program in which subscribers can rent an unlimited number of movies over the course of the month for $15.54, while keeping only two at a time. (Other services allow customers to keep three at a time.)
That offering, Mr. Swint said, is the site's most popular DVD rental option. "We're really bullish about this service," he said, "and our customers are enthusiastic."
Posted by Kevin on October, 25 2004 at 11:41 AM
