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Technology Stocks : Netflix (NFLX) and the Streaming Wars -- Ignore unavailable to you. Want to Upgrade?

To: redfish who wrote (160)	12/14/2004 3:36:07 PM
From: CFA	Read Replies (1) \| Respond to of 2280

Redfish, Agree that in the short-run Blockbuster will have to stock more copies of popular titles, as people will have no incentive to return "2-day rentals" in 2 days. However, Blockbuster is increasingly becoming a subscription-based business. It has an in-store MoviePass (which will be linked to its online site in 1st Q 2005) that allows unlimited in-store rentals for $24.99/month. Under a subscription model, consumers have an incentive to return movies quickly, since it's required to get new movies. Also, even if Blockbuster ends up buying 150 copies of a popular title instead of 100, it will have no problem getting rid of excess copies thanks to popular new in-store promotions such as "Buy 2 DVDs for $20".