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Netflix acknowledges increased competition from kiosks

26 April 2009 13:05 by James "Dela" Delahunty | 16 comments

Netflix has added a lot of subscribers in the past couple of years, posting surprising results and fending off competition from much larger corporations such as Blockbuster. However, the company has acknowledged itself that competition is coming now from other directions, particularly with kiosks.

"In exit surveys of canceling Netflix subscribers, kiosk is more and more frequently named as where they will go now for movies," Netflix Chief Executive Officer Reed Hastings said. "By the end of the year, kiosks will likely be our number one competitor as video stores fall inversely," he said, adding the "long-term effects of ubiquitous $1 new release DVD rental are not positive for us or the industry as a whole."

He is not alone in that belief either, as Hollywood studios have also raised concerns about the low prices that kiosks charge, saying it is hurting DVD retailers. When asked how Netflix plans to compete with this threat to its business, Hastings said, "We have to focus on our differentiators, such as selection, convenience and the value of unlimited streaming. We'll focus on our benefits and they'll focus on theirs."

Netflix expects to to end 2009 with 11.2 million to 11.8 million subscribers, up from a previous target of 10.6 million to 11.3 million.

Permalink to this article

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Discuss this article!
Blessedon (Member) 26 April 2009 21:17
If they don't reduce their surcharge for blu-ray, Netflix will lose many more customers this year! [ + quote]
bomber991 (Junior Member) 26 April 2009 21:55
I didn't realize those kiosks only charge $1 to rent dvd's. I always figured with netflix with the 3 a month plan your movies come out to about a dollar, but you have to watch a movie practically every day or so. [ + quote]
vyze (Newbie) 26 April 2009 23:21
*Originally posted by bomber991:* I didn't realize those kiosks only charge $1 to rent dvd's. I always figured with netflix with the 3 a month plan your movies come out to about a dollar, but you have to watch a movie practically every day or so. This is true. We do the NetFlix still, with the RedBox, because we can get streaming movies with NetFlix. What would be interesting is if RedBox was to partner with NetFlix or somehow NetFlix could start their own that still allowed having so many out at a time but they could return the movies at a drop box, paying $1 for the return case, but then be able to rent another movie right then and there..... [ + quote]
KillerBug (Senior Member) 27 April 2009 2:03
Sounds like I'll be canceling my netflix soon. The streaming would be a great feature for me (I am a night person) except that they will not let me stream to my PS3. [ + quote]
maryjayne (Junior Member) 27 April 2009 11:36
Perhaps if NetFlix were better stocked with new releases, then they would not be losing their customers. Getting a new release from a kiosk is much easier than trying to get one from NetFlix. [ + quote]
maryjayne (Junior Member) 27 April 2009 11:36
*Text deleted* Somehow a double post... [ + quote] This message has been edited since posting. Last time this message was edited on 28 April 2009 7:32
LissenUp (Junior Member) 28 April 2009 11:45
Anyone know how much Redbox charges for Blu-rays IF they even have Blu-rays??? [ + quote]
Blessedon (Member) 28 April 2009 16:27
*Originally posted by "LissenUp":* _ Anyone know how much Redbox charges for Blu-rays IF they even have Blu-rays??? The Redbox in our area offers blu-ray and the price is still $1. Selection is limited however. [ + quote]
stuntman_ (Member) 28 April 2009 17:30
I really would hate it if netflix or video rental stores went out of business because of these kiosks, I absolutely HATE most new release movies Hollywood keeps making crap and stupid people keep renting it, If the kiosks were also renting classics on top of the new releases then I would be okay with it but this isn't the case and they would need much bigger kiosks. [ + quote]
bratcher (Senior Member) 30 April 2009 7:28
*Originally posted by stuntman_:* I really would hate it if netflix or video rental stores went out of business because of these kiosks, I absolutely HATE most new release movies Hollywood keeps making crap and stupid people keep renting it, If the kiosks were also renting classics on top of the new releases then I would be okay with it but this isn't the case and they would need much bigger kiosks. Yes I also use Netflix mainly for older & classic movies. There is a DVDplay box nearby at the Randalls close to my home thats a buck per movie & a Redbox a little farther away. However Even though I've rented from the DVDplay box several time for new releases I've also waited to get them from Netflix which is not a problem for me as I don't mind waiting for Netflix to ship the new release to my home. [ + quote] This message has been edited since posting. Last time this message was edited on 2 May 2009 8:58
Unlockneo (Junior Member) 2 May 2009 8:35
i cancel my subscription when i discover RedBox it cost only $1 dollar RedBox is the best movie rental EVER! [ + quote]
bratcher (Senior Member) 2 May 2009 8:59
*Originally posted by Unlockneo:* i cancel my subscription when i discover RedBox it cost only $1 dollar RedBox is the best movie rental EVER! Thats fine if all you do is rent rew release movies. [ + quote]
Sazaziel (Junior Member) 3 May 2009 11:27
Simple solution. Compete with their own kiosks but, competition must be sure not to oversaturate the market with kiosk in every shopping center on the block. The good news would be that while the content carried will be up to the vendors, the choice will still be made by its consumer. Example I live in an area where there are no Hollywood Video around. We have a Blockbuster Video in my area and Walmart carries Redbox. If Hollywood Video set up a kiosk in this area, it would be great competition amongst its competitors. We also have areas where its predominantly Hollywood Video and no Blockbuster. So all companies can benefit in some way...or vice versa. Walmart carries Redbox and Redbox profits due to having a vast amount of consumer traffic. The content carried at the kiosk will ultimately influence the decision of the consumer. [ + quote]
bratcher (Senior Member) 3 May 2009 12:05
Here in my part of northwest Houston there is one DVDPlay kiosk & 3 Redboxes within 3 miles of my home that I've seen. The nearest Redbox is outside at a Walgreens drugstore. [ + quote]
KillerBug (Senior Member) 7 May 2009 6:19
*Originally posted by stuntman_:* I really would hate it if netflix or video rental stores went out of business because of these kiosks, I absolutely HATE most new release movies Hollywood keeps making crap and stupid people keep renting it, If the kiosks were also renting classics on top of the new releases then I would be okay with it but this isn't the case and they would need much bigger kiosks. Yeah, after looking at the local Kiosks I decided to stay with netflix. Hollywood rarely makes a good movie anymore, most TV shows are better than the summer blockbusters. Current System: Windows 7 RC1, DFI M2RS, ATI 3870HD, Hauppauge WinTV-HVR-1600, Athlon 9950, 6GB Corsair DDR2, 1.5TB RAID-1, 750GB RAIR-1, 500GB RAID-1, 640GB RAID-0 Boot, Intel Gigabit NIC (PCI), LG 20X Lightscribe DVDR, 1430SA, Coolmax 1200w Power Supply, Logitech G15(first edition), Logitech G5(Second Edition), modified 4U server case. Overall configuration: Perfect chair, two 22" widescreens overhead, Logitech 5.1 Audio [ + quote]
bratcher (Senior Member) 7 May 2009 8:08
*Originally posted by KillerBug:* *Originally posted by stuntman_:* I really would hate it if netflix or video rental stores went out of business because of these kiosks, I absolutely HATE most new release movies Hollywood keeps making crap and stupid people keep renting it, If the kiosks were also renting classics on top of the new releases then I would be okay with it but this isn't the case and they would need much bigger kiosks. Yeah, after looking at the local Kiosks I decided to stay with netflix. Hollywood rarely makes a good movie anymore, most TV shows are better than the summer blockbusters. Such as? 24, Life & Bones are very good. [ + quote]