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Why did I switch to Netflix? Do the math |
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Written by MCT
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Tuesday, 01 August 2006 |
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It seems to have as many tentacles as Davy Jones' head in "Pirates of the Caribbean: Dead Man's Chest."
I'm talking about the video-rental business.
Way back in the day ... in 2000 ... it was pretty cut and dried. If you wanted to rent a movie, you drove to a store, often one featuring a royal blue awning emblazoned with garish, yellow capital letters.
Nowadays?
You want a new release that comes cheap, as long as you have a credit card and you return it after the next day or two? There are 112 Publix locations with kiosks where you can get DVDs for a dollar a day.
If you're going on a driving trip that takes you through Atlanta, or many other cities, you can mollify rambunctious children by picking up a rental at a "redbox" at a McDonald's in one city and dropping it off in another city with no penalty, just a dollar per day.
You also can have a DVD (and concessions, too) delivered to your home in an hour by a company called Mobile Movies.
And if all that's too much trouble, ordering a pay-per-view film from your cable TV service, using the remote control, or choose a movie from the company's On Demand selection is an option.
 I have a current loyalty to the red army of online DVD rentals: Netflix (and its ubiquitous crimson envelopes).
A year and a half ago, I wasn't so gung-ho as a co-worker tried explaining the concept to me.
"They mail DVDs to me?" I asked.
"My choices are so impulsive and instantaneous," I continued. "If I am thinking I want to watch a movie, I want to watch it then and there. I can't see being interested in it in a few days."
So, I have the attention span of a lobotomized fruit bat.
Still, a couple aspects of the Netflix pitch were enticing.
I could have three movies at a time, and as many DVDs as I could rent in a month. It would cost me less than $230 for the entire year. And I would never again pay a late fee.
By comparison, I had paid Blockbuster Video in the vicinity of $1,000 each of the previous few years — typically renting three or four movies each weekend once the kiddos started going with me to the store.
Once the popcorn and candy were added in (and more than occasionally I would grab one of those 20-ounce Cokes), the bill would often exceed $30, especially if I had a late charge.
Oh, and driving there and back was 7.8 miles. At 48.5 cents a mile - the government-allowed rate for business travel - that equaled an additional $3.78, or approximately $100 a year for me.
Then I added intangible costs, such as the frustration of scrambling to pick another movie as the new-release shelf had often been picked clean by Friday evening, or inconvenience of the lines to navigate to pay and get out of there.
The math made too much sense. I went online and opened an account with Netflix. I figured I'd give it a month.
I haven't stepped into a video-rental store since.
I know that my savings numbers are probably higher than most folks, but based on the just-short-of-Disney-esque lines I would stand in at the store on a Friday or Saturday night, I figure there are a lot of people who would save money making the switch.
The savings were the driving force in my decision, but I continue to be surprised at a) the speed of the transactions and b) how little waiting a day or two bothers me.
Typically, if I ask for a movie on a Monday morning online, I have it in hand Tuesday or Wednesday.
The movies arrive in an envelope that seamlessly converts into the postage-paid return envelope.
If a movie hasn't been released yet and I have requested it in advance, I typically receive it the day after it comes out.
While Netflix has been great for me, the company recently settled a class-action lawsuit, which charged it had not fulfilled its claims of "unlimited rentals" and "one-day delivery."
Also, the suit claimed that heavy-duty renters, categorized by numerous reports as those who would request more than 10 DVDs a month, would be put behind less-prolific members and new customers when it came to shared top-of-the-queue titles.
Netflix has adjusted its terms of use to reflect this philosophy.
I researched my rental history to see that I am receiving seven movies a month on average, which may explain why I've never experienced what was charged in the suit.
The legal wranglings have made nary a dent in the Netflix ship, as it was announced this week the California-based company recorded triple the profits in the second quarter of 2006 as it had had in the same time frame last year.
Blockbuster has an almost identical mail service (to a point where it is being sued by Netflix for patent infringement), though they offer fewer titles (advertising 55,000 to Netflix's 60,000). I recently joined Blockbuster's plan for a free two-week trial run. The service largely has been as efficient as the other's, but with a hiccup.
Blockbuster was out of stock on a pretty mainstream, non-new release, Steven Soderbergh's "Out of Sight" with George Clooney and Jennifer Lopez, which I had asked for July 14. I've never had that kind of experience with Netflix, for whatever that's worth.
In addition, the Blockbuster Web site has indicated a "short wait" on "Out of Sight" for a week and a half. That doesn't count as "short" to me.
Ordering the same title from Netflix at the same time, I got the movie, watched it and returned it by July 19.
The prices for the three-movie monthly plans are the same at both companies, $17.99 plus tax.
What some might consider a Blockbuster advantage in comparing the plans, I do not. Periodically Blockbuster members are sent a free rental e-coupon, which can be redeemed at the store. For families who have computer-game-playing children who rent from the store anyway, the coupon is a nice touch. Neither service sends games through the mail.
Frankly, though, I don't want an excuse to walk into a video store again.
Not when the hits keep coming from the post office - like checks in the mail.
___
Steve Svekis:
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