May 19, 2005

NetFlix beats Wal-Mart into Submission?

Reuters is reporting that Wal-Mart has either been beaten or has been successful, but either way in June, Netflix will take over its DVD rental operations:

The online arm of Wal-Mart Stores Inc.,, said in an advertisement on its Web site Thursday that it will shut down its DVD rental service in June and is offering customers the chance to sign up with rival service Netflix Inc.

Walmart Online, in the advertisement that appeared early Thursday, said the company will not accept new members and offered a link to Netflix (Research), where customers can sign up for the DVD rental service at their existing Wal-Mart (Research) rates for one year.

I don't have any further information yet, but I think Wal-Mart has realized that Netflix does this a lot better (cheaper) than Wal-Mart can.

UPDATE: In other words,"You know you must be doing well when Wal-Mart decides they don't want to compete with you." Jason Pearce is pleased,"The good news is instead of leaving my high and dry, they built an easy way for me to transfer my Wal-Mart account to Netflix, movie list and all. Thanks to both parties for making this easy on the customer. I wish more services were like this (e.g. switching cell phone providers)."

Double Viking: "Blockbuster must be kicking themselves for not buying these guys out years ago."

Indeed, (via Life Distilled), Blockbuster wants those Wal-Mart DVD customers really, really bad: "Blockbuster Inc. on Thursday extended a new rental offer to subscribers of online movie-rental company Netflix and, offering two free months of service to customers who switch to Blockbuster Online. It said the subscribers could receive a free DVD rental and that it will offer them the chance to subscribe to Blockbuster Online at the current price they pay for the rival services. "

Kip Esquire: "Wal-mart, like any other successful business, only became prosperous and powerful by giving customers what they want. If and when a business fails to continue doing so, it loses its dominance and its "obscene" profits to others who do a better job of giving customers what they want."

Posted by Kevin on May, 19 2005 at 08:27 AM