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Wal-Mart bows out of DVD Rentals

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Wal-Mart has announced it would terminate its online DVD rental service and provide its customers the option of converting their subscription to Netflix at their current rate for a year. In return, Netflix will promote Wal-Mart’s DVD sales online through their website. Wal-Mart will direct customers to Netflix via their own website.

Blockbuster retaliated by raising their rental price to $18 as a test, which is a pretty weird thing to do when you are an underdog. This tie-up of Netflix and Wal-Mart effectively puts an end to the earlier rumors of Amazon teaming up with Netflix for DVD rentals, and could pose a huge opportunity for Blockbuster.

Netflix, with its new $9.99 one-at-a-time DVD plan, and formidable library of titles is a tough competitor. Their shipping times are great, even in a smaller city like Milwaukee. I have been a subscriber for a long time, and although I did sample the other services’ free offers, would not dream of canceling my Netflix subscription. Netflix now has about 3 million subscribers.

If you visit the Netflix site, you can already see a banner ad for Wal-Mart stretching across the top of the page. Wal-Mart features the reverse feed back to Netflix.

This is one of the few times where an under-dog has taken on a behemoth like Wal-Mart, and won. Then again, this is a new game, and the rules are different.

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  • http://selfaudit.blogspot.com Aaman

    This is not a satire, despite Google News

    The stock is on a bull run, but probably will drop back to more reasonable levels.

  • http://dumpsterbust.blogspot.com/ Eric Berlin

    Yeah, that’s a very weird “retaliation,” to raise prices in response to an essential merger.

    I’ve loved Netflix for years. I was ready to bail a few months ago due to a problem that I now believe had to with my local mail delivery. In any event, after looking through the terms I still found Netflix to be a better deal than Blockbuster.

  • http://selfaudit.blogspot.com Aaman

    Blockbuster has now offered 2 free months, a DVD, and the opportunity to subscribe at the current price to anyone wanting to switch from Netflix. This is so unreal it is almost satire.