Wally world swallows up Netflix

[Sheik Yerbouti]

Walmart to buy out Netflix..
http://money.cnn.com/2005/05/19/technol...walmart_netflix.reut/index.htm?cnn=yes

edit
according to the article, wally didn't actually 'buy out' but they came to an 'agreement'
thank god for 'in demand'

 

[conjur]

wow....glad I went with Blockbuster.

 

[PELarson]

Originally posted by: Sheik Yerbouti
Walmart to buy out Netflix..
http://money.cnn.com/2005/05/19/technol...walmart_netflix.reut/index.htm?cnn=yes

edit
according to the article, wally didn't actually 'buy out' but they came to an 'agreement'
thank god for 'in demand'

That is not the way I read it!

"LOS ANGELES (Reuters) - Netflix Inc., the online DVD rental company, and Wal-Mart Stores Inc. said Thursday they have struck a deal to co-promote DVD sales and rentals, with Wal-Mart shutting down its online rental service to concentrate on DVD sales."

The way the article reads Wal-Mart is quiting the DVD rental business and has made a deal with Netflix for Netflix to take over the contracts Wal-Mart has with their customers until the contracts expire.

 

[InfectedMushroom]

Originally posted by: PELarson

Originally posted by: Sheik Yerbouti
Walmart to buy out Netflix..
http://money.cnn.com/2005/05/19/technol...walmart_netflix.reut/index.htm?cnn=yes

edit
according to the article, wally didn't actually 'buy out' but they came to an 'agreement'
thank god for 'in demand'

That is not the way I read it!

"LOS ANGELES (Reuters) - Netflix Inc., the online DVD rental company, and Wal-Mart Stores Inc. said Thursday they have struck a deal to co-promote DVD sales and rentals, with Wal-Mart shutting down its online rental service to concentrate on DVD sales."

The way the article reads Wal-Mart is quiting the DVD rental business and has made a deal with Netflix for Netflix to take over the contracts Wal-Mart has with their customers until the contracts expire.

That sounds more like it:
"Walmart.com shuts down its online rental service, offers customers a link to rival program."

 

[cKGunslinger]

Originally posted by: PELarson

Originally posted by: Sheik Yerbouti
Walmart to buy out Netflix..
http://money.cnn.com/2005/05/19/technol...walmart_netflix.reut/index.htm?cnn=yes

edit
according to the article, wally didn't actually 'buy out' but they came to an 'agreement'
thank god for 'in demand'

That is not the way I read it!

"LOS ANGELES (Reuters) - Netflix Inc., the online DVD rental company, and Wal-Mart Stores Inc. said Thursday they have struck a deal to co-promote DVD sales and rentals, with Wal-Mart shutting down its online rental service to concentrate on DVD sales."

The way the article reads Wal-Mart is quiting the DVD rental business and has made a deal with Netflix for Netflix to take over the contracts Wal-Mart has with their customers until the contracts expire.

Exactly, Wal-Mart DVD rental subscribers will be tranfered to NetFlix at thier current membership rates, and NetFlix will be promoting Wal-Mart DVD sales.

Did the OP even read his own link?

 

[WiseOldDude]

clearly you saw Wal-Mart and the name of another company, and made decisions the same way Commander Cuckoo Bananas does, to hell with the facts, here is what I think :|

 

[Sheik Yerbouti]

and do you think this will increase the reach of wally world or decrease it? It's a definite win situation for Netflix, as long as the walmart name doesnt get plastered all over their site/products etc.
Numerous people boycott walmart for their business practices, and would consider doing the same now that netflix is in bed with them.
For example, I have had NUMEROUS crappy customer service experiences with Sears, and now that Kmart and Sears are partnered, I would do everything I could to avoid Kmart now as well.
I guess my edit didn't clear it up, but really, who do you think has more money? Walmart or Netflix?
From a NYTimes article:
SUNDAYBUSINESS | February 27, 2005, Sunday
OPENERS: THE COUNT; Wal-Mart's Profits: Nearly $20,000 (Per Minute, That Is)
http://query.nytimes.com/gst/abstract.h...res=F10B17FC3F590C748EDDAB0894DD404482

I couldn't really find a dollar figure to show Netflix's profits, but I did try.

 

[Sheik Yerbouti]

I did read it, and it seems like a major corporation swallowing up a smaller one under the guise of a business deal.

 

[arsbanned]

Noooo. NetFlix took over from the Walmart service. It's clearly a victory for NetFlix. I think WalMart is going to start hitting the wall in a lot of areas.

 

[Sheik Yerbouti]

I guess I just don't see it that way, I just see it as another way for walmart to expand itself. Sorry if I seemed to over the top about it. I used to work there and have seen their practices in action, and it's not pretty.

 

[cKGunslinger]

Originally posted by: arsbanned
Noooo. NetFlix took over from the Walmart service. It's clearly a victory for NetFlix. I think WalMart is going to start hitting the wall in a lot of areas.

I think Wal-mart is reaching the end of their current expansion period. Now they are looking at which markets aren't really that profitable for them and cutting them out. They seem not so much to swell continuously, but rather pulsate, growing large, then trimming back as needed, repeating over and over.

 

[TastesLikeChicken]

It's a strategic partnership. Walmart gets to rid itself of a non-profitable business area and Netflix gets to increase their customer base, with the support of Walmart, which will help it in its price war against Blockbuster. And Netflix pomotes Wally World DVDs.

There's probably a bit more to this arrangement that is not being said as well, something that would benefit Walmart in this deal. I can't imagine them divesting of a business this easily without getting a further benefit than a promotions partner.

 

[Rainsford]

Originally posted by: TastesLikeChicken
It's a strategic partnership. Walmart gets to rid itself of a non-profitable business area and Netflix gets to increase their customer base, with the support of Walmart, which will help it in its price war against Blockbuster. And Netflix pomotes Wally World DVDs.

There's probably a bit more to this arrangement that is not being said as well, something that would benefit Walmart in this deal. I can't imagine them divesting of a business this easily without getting a further benefit than a promotions partner.

I see what you are saying, but think about Walmart entering the business in the first place. Netflix was really the big player, and Blockbuster showed up as a competitor. Entering the market as a third player in a business like this, especially against two well established companies, has to be prett tough. DVD rentals by mail compete on speed and selection, and Netflix and Blockbuster are pretty well established in that regard. I bet Walmart was initially going to try what they always do, underprice their offerings so they can drive the competition out of business, then they end up being the only game in town. They do this all the time with local businesses. But Netflix and Blockbuster aren't local businesses, and my guess is that Walmart decided it wasn't worth it to try and sink Netflix and Blockbuster.

I could be totally wrong here, but you're right, on the surface it doesn't seem like that good of a deal for Walmart.

 

[Train]

Originally posted by: arsbanned
Noooo. NetFlix took over from the Walmart service. It's clearly a victory for NetFlix. I think WalMart is going to start hitting the wall in a lot of areas.

I agree, Netflix won big, but walmart saved face (and made a smart move) by getting something out of the deal while they still had something to bargain with. Instead of beating a dead horse and eventually shutting down their online rental service.

 

[cKGunslinger]

Originally posted by: Train

Originally posted by: arsbanned
Noooo. NetFlix took over from the Walmart service. It's clearly a victory for NetFlix. I think WalMart is going to start hitting the wall in a lot of areas.

I agree, Netflix won big, but walmart saved face (and made a smart move) by getting something out of the deal while they still had something to bargain with. Instead of beating a dead horse and eventually shutting down their online rental service.

Actually, now that I think a bit more about it, movie rental by mail is a pretty doomed market. Video on Demand (which has been promised for ages) is slowly but surely making strides towards a reality. It wouldn't make a whole lot of sense for Wal-Mart to continue to implement and expand upon a video-by-mail infrastructure, relative to the meager income of their 3rd place position in that market.

 

[Passions]

Originally posted by: Sheik Yerbouti
I did read it, and it seems like a major corporation swallowing up a smaller one under the guise of a business deal.

Hit the books or go back to 4th grade English.


LAUGH!

 

[Train]

Originally posted by: cKGunslinger

Originally posted by: Train

Originally posted by: arsbanned
Noooo. NetFlix took over from the Walmart service. It's clearly a victory for NetFlix. I think WalMart is going to start hitting the wall in a lot of areas.

I agree, Netflix won big, but walmart saved face (and made a smart move) by getting something out of the deal while they still had something to bargain with. Instead of beating a dead horse and eventually shutting down their online rental service.

Actually, now that I think a bit more about it, movie rental by mail is a pretty doomed market. Video on Demand (which has been promised for ages) is slowly but surely making strides towards a reality. It wouldn't make a whole lot of sense for Wal-Mart to continue to implement and expand upon a video-by-mail infrastructure, relative to the meager income of their 3rd place position in that market.

well I was just thinking within a single market. But outside of that, your probably right, video on demand will eventually replace rental by mail. But in the meantime, somone is going to make a lot of money off of it. At what point will rental by mail go out of business? Could be 2 years, 5 years, 10 years. Just look at how many people still rent VHS tapes

 

[Rainsford]

Originally posted by: Train

Originally posted by: cKGunslinger

Originally posted by: Train

Originally posted by: arsbanned
Noooo. NetFlix took over from the Walmart service. It's clearly a victory for NetFlix. I think WalMart is going to start hitting the wall in a lot of areas.

I agree, Netflix won big, but walmart saved face (and made a smart move) by getting something out of the deal while they still had something to bargain with. Instead of beating a dead horse and eventually shutting down their online rental service.

Actually, now that I think a bit more about it, movie rental by mail is a pretty doomed market. Video on Demand (which has been promised for ages) is slowly but surely making strides towards a reality. It wouldn't make a whole lot of sense for Wal-Mart to continue to implement and expand upon a video-by-mail infrastructure, relative to the meager income of their 3rd place position in that market.

well I was just thinking within a single market. But outside of that, your probably right, video on demand will eventually replace rental by mail. But in the meantime, somone is going to make a lot of money off of it. At what point will rental by mail go out of business? Could be 2 years, 5 years, 10 years. Just look at how many people still rent VHS tapes

Exactly, plus a company that is well positioned in one market has an easier time moving into a related market. Netflix is an established name in home movies, so people will be more likely to go with them for video on demand over some new company. Good brands are worth quite a bit, especially in closely related markets. Netflix is a name a lot of people know and trust for home movies, when they announce a video on demand service (and believe me, they will), people will give it a shot. Compare that to some company that is either unknown or known for something other than movies. It's no contest.

 

[ntdz]

Originally posted by: conjur
wow....glad I went with Blockbuster.

Seriously.

 

[randym431]

Netflix is pretty good, and getting better. Big boy walmart thought they could give netflix a run for their money, they couldnt. Rather than just go away with tail between the legs, walmart uses its billions in power to playup to netflix. Makes walmarts video rental look like it didnt fail, but it did. Online video rental services must be a shakey business. Really only room for one or two, not a dozen.