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NET FLIX Free Resources
Just at the inception of...
Just at the inception of the DVD craze in the late 1990s, Netflix saw a niche angle in the market and decided to fill it. The company launched its Web site in 1998 as one of the first online DVD rental services with a library that has grown to include more than 11,500 titles, and now commands 98 percent of market share among only a handful of mom-and-pop online video rental sites.
Although movie rental behemoth Blockbuster, a unit of Viacom, has announced plans to open an online rental site this summer, which may pose a formidable threat to Netflix and its comparatively small following.
The advantage Netflix has over larger entities like Blockbuster is that its service does not charge late fees, a revenue source that accounts for between 18-20 percent of Blockbuster's overall profits. Additionally, Netflix only charges a flat $20 monthly fee for unlimited DVD requests, which cost-wise would only account for between four and six DVD rentals per month at traditional video stores.
The drawback is that Netflix consumers don't get the kind of instant gratification they would from a visit to an offline video store, and instead must wait one to four days for delivery of their DVD of choice.
Subscribers to the site create a movie wish list and right off the bat receive their first three DVD requests on a trust basis, since Netflix has no due date or late fee policies. DVDs are delivered directly to the subscriber's address by first-class mail in postage-paid mailers, which eliminates the hassle of getting postage to return the DVD, and once the first batch of DVDs are returned the next title on the list is automatically mailed out, and so the cycle begins.
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