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NET FLIX Free Resources
It already ha...
It already has. Hastings is competing not only with Walmart.com and Blockbuster but also with the pay-per-view and premium cable channels who know the same thing he does: The average video rental experience sucks. Consider Tom and Hilary, who decide to rent a movie on Friday evening. They drive to the video store looking for Kissing Jessica Stein only to find that all the copies are out. In fact, there are rarely enough copies of a modest hit film in its first few weeks of release because of a strategy known in the business as "managed dissatisfaction." Video stores don't stock large quantities of most new releases because demand is so fleeting that it's not cost-effective they get stuck with extras. So Tom and Hilary settle for Me, Myself & Irene, and leave feeling disappointed. The movie is crap, they're too busy to return it, and then they get slapped with a $6 late fee. Not exactly a loyalty-building experience.
Netflix offers a low tech video-on-demand alternative. Jon and Alys subscribe to a $19.95 plan that allows them to rent as many movies as they want in a month, but no more than three at a time. After they watch a film and return it in a postage-paid envelope, the company mails them the next DVD from a list the couple maintain on their Netflix Web page, which offers recommendations based on their rental history. (Liked The Royal Tenenbaums? Try Ghost World.) If Netflix is out of Kissing Jessica Stein, Jon and Alys just receive the next movie on the list. On Friday, they have Donnie Darko, Piero, and In the Bedroom on top of their DVD player. They love Donnie Darko, mail it back on Saturday, and by Tuesday, Y Tu Mam Tambin arrives. It's so convenient that the average Netflix customer watches five movies a month. Some subscribers rent twenty or more. (Which is a problem: Netflix loses money on postage for households that rent more than five a month.)
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