A mere week after rumors that Blockbuster would drop their online DVD rental business comes this:
Wal-Mart is shutting down its DVD rental business and sending their customers over to Netflix. As part of the deal, NetFlix will send those who want to purchase DVDs to WalMart.com (where they will quickly type in the word Amaz… into their browser windows).
There are at least two ways to look at this. On one hand, these trends are great news for NetFlix. The massive corporations that had the financial and branding to steamroll our little online friend have decided for a variety of reasons not to. Maybe the business is harder than it looks and maybe consumers just have better vibes and experience better results when it comes to NetFlix. I know I do. I’d never consider switching to any of the big players.
On the other hand, these are big friggin companies. WalMart doesn’t drop out of a business because they realize they just can’t take on a powerhouse like NetFlix. Please…
So what does that mean? It could mean that they got out of the DVD rental business because there is just no way to make it work from a financial standpoint. Or it could be that they already see the clear writing on the wall that DVDs are yesterday’s news and video on demand will blow past this interim step in video delivery. Our kids will laugh when we tell them we waited by the mail for our movies to arrive.
“Why not just download them into your brainchip?” they might ask.
Now NetFlix knows this trend is coming around the bend in a big way. They are betting that consumers who look to them for DVD rentals will also trust them to be their intermediary when it comes to downloadable video. And folks, that is one hell of a big bet.
So, what’s the only thing scarier than WalMart getting into your business?
Them getting out of it.