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Netflix looks to tap $25 billion dollar gift card industry

1 December 2007 18:43 by Rich "vurbal" Fiscus | 4 comments

Just as Blockbuster has been making headway competing in the online rental business, rival Netflix has apparently decided to retun the favor and compete in Blockbuster's brick and mortar world.

No they're not opening up a chaing of brick and mortal rental establishments. What they are doing is selling gift cards in stores like Office Depot, Winn-Dixie, and Barnes & Noble College Booksellers. In addition, more stores could be added next year.

Netflix is looking to take advantage of the massive popularity of gift cards as Christmas gifts. This is one place where internet based businesses like Netflix have a decided disadvantage. While a customer can walk into a brick and mortar establishment (including Blockbuster) and walk out with a gift card to give as a present, the internet isn't a particularly good medium for selling them.

According to the National Retail Federation, gift card sales are expected to total over $25 billion this holiday season.

�Introducing gift cards this holiday season is part of our larger strategy to expand retail distribution over time,� said Jessie Teitz, VP of marketing at Netflix. �The end goal is to make it as easy as possible for consumers to give the gift of Netflix or purchase it for themselves.�

Source: Video Business

Permalink to this article

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Netflix may face increased postage due to mailer design (12 December 2007)

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Netflix becomes official internet VOD source for Heroes (29 November 2007)

Blockbuster CEO talks about upcoming plans for brick and mortar operations (17 November 2007)

Kiosk operator predicts massive expansion over next 3 years (17 November 2007)

Blockbuster hopes to compete with Netflix by not competing with Netflix (10 November 2007)

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Discuss this article!
emugamer (Junior Member) 3 December 2007 7:48
That is a great idea....unless they ruin it by requesting your credit card info when redeemed, so that they can start charging you once the month runs out before you have a chance to cancel. [ + quote]
borhan9 (AfterDawn Addict) 22 December 2007 17:49
*Quote:* �Introducing gift cards this holiday season is part of our larger strategy to expand retail distribution over time,� said Jessie Teitz, VP of marketing at Netflix. �The end goal is to make it as easy as possible for consumers to give the gift of Netflix or purchase it for themselves.� Why dont they just leave things as they are doing and to make sure that this format works if a friend gets you a gift card and u want to activate it either online or actually going into a store they just email you the sent card with the code that can grant you access to this gift card and a way you go kinda thing. [ + quote]
emugamer (Junior Member) 23 December 2007 11:56
*Quote:* *Quote:* �Introducing gift cards this holiday season is part of our larger strategy to expand retail distribution over time,� said Jessie Teitz, VP of marketing at Netflix. �The end goal is to make it as easy as possible for consumers to give the gift of Netflix or purchase it for themselves.� Why dont they just leave things as they are doing and to make sure that this format works if a friend gets you a gift card and u want to activate it either online or actually going into a store they just email you the sent card with the code that can grant you access to this gift card and a way you go kinda thing. It's all about the packaging probably. Tapping into the mindless masses of Christmas shoppers whose eyes glaze over when they are standing on line and see a pretty piece of plastic decorated with snowflakes ans Santa that says "gift card." [ + quote]
borhan9 (AfterDawn Addict) 23 December 2007 15:48
*Quote:* *Quote:* *Quote:* �Introducing gift cards this holiday season is part of our larger strategy to expand retail distribution over time,� said Jessie Teitz, VP of marketing at Netflix. �The end goal is to make it as easy as possible for consumers to give the gift of Netflix or purchase it for themselves.� Why dont they just leave things as they are doing and to make sure that this format works if a friend gets you a gift card and u want to activate it either online or actually going into a store they just email you the sent card with the code that can grant you access to this gift card and a way you go kinda thing. It's all about the packaging probably. Tapping into the mindless masses of Christmas shoppers whose eyes glaze over when they are standing on line and see a pretty piece of plastic decorated with snowflakes ans Santa that says "gift card." Well they do call it the silly season :) [ + quote]