Netflix Wants Blockbuster Online Shut

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Notice from szupie:

Copied from http://betanews.com/2006/04/05/netflix-wants-blockbuster-online-shut/

Netflix is attempting to have rival Blockbuster Online shut down by suing Blockbuster in a federal court in Northern California on Tuesday. The company claims its biggest competitor is committing patent infringement and is asking for an injunction to bar Blockbuster from allowing online rentals.

 

Two patents surrounding online DVD rental are held by Netflix. The first was awarded in 2003 and covers the concept of the automatic queue, which customers add to from the company's library and then receive movies in a customizable order of preference.

 

 

The second patent was awarded on the day of the lawsuit, and covers the method that allows Netflix subscribers to keep the DVDs for an unlimited amount of time, and "to obtain new DVDs without incurring additional charges and to prioritize and reprioritize their own personal dynamic queue--of DVDs to be rented," the lawsuit reads.

 

Netflix claims that Blockbuster knew of the company's 2003 patent and its work towards the second, yet ignored them with the launch of Blockbuster Online. Netflix added that the action to sue Blockbuster had to be taken in order to protect its business interests.

 

Blockbuster had no comment as it had not reviewed the lawsuit as of press time. However, its new online component is playing a huge role in the company's future business strategy.

 

In mid-March, Blockbuster CEO John Antioco said that online rentals would expand to 20 million households by the end of the decade, with in-store revenue falling some 25 percent during that same time period. Thus, Blockbuster's online component has become increasingly important.

 

Over a quarter-billion dollars has been invested in the service, and sources tell BetaNews that selling Blockbuster Online subscriptions has become the number one priority in the company's stores, even above in-store rentals. Some locations are expected to sell as many as four subscriptions per week or more, with repercussions for stores that underperform.

 

While that number may not seem like a lot, across Blockbuster's 6,000 plus locations it adds up to about 120,000 new subscribers per month for the service.

 

Blockbuster Online currently has one million subscribers, a quarter of Netflix's 4.2 million customers.

[nightfox1405241487 0]

About time this happened... lol. Ever since Blockbuster released their online service, I knew they were barking up the wrong tree. Netflix did it first so, I have to stand behind them... it just isn't nice to copy these days...[N]F

[Sarah81 0]

Blockbuster's Netflix ripoff stinks anyway. A friend of mine tried a free one-month trial ... took nearly two weeks for the first DVDs to show up. Whereas Netflix, upon new account creation, gets the first DVDs in your queue to you in just a few *days*.So ... Netflix should just sit back and let Blockbuster commit suicide by bad service.But then again ... if they have the patents, yeah, they have every right to sue.

[iGuest 3]

For Business Interest, sigh... There's no competition anymore, just monopolies. I think I'll mortgage my property and look for free parking.Cheers,MC

[illini319 0]

Suing for patent infringement won't necessarily right this supposed wrong. Even if Netflix wins, the simple fact is that Blockbuster online is not going to go away and is intending to leverage their assets towards being the dominant player in online rentals. I'm a Netflix subscriber, and have been so since their first year of business. I fully intend to show my support to the "mom and pop" store by continuing my patronage despite Blockbuster's incessant (and admittedly financially better) offers. I would suggest that Netflix re-distinguish themselves from Blockbuster. And not, try to go after them blow by blow.

Edited April 7, 2006 by illini319 (see edit history)

[Vicious_AD 0]

I agree that blockbuster online stold netflix's idea, that is completely blatent and I wish they had gotten the idea patented so that they wouldn't have stolen it. I use blockbuster online because they give you two free rentals from the stores (new, old, or games) each month and because they have a bigger selection. so I don't think they should be shut down, because afterall, that's buisness and one must be ready for their competitors to take their ideas to feed their families.

[inevitable 0]

More competitors means better service for their customers. If blockbuster is kicked out of the market netflix might get a bit complacent the same way hotmail become coomplacent when it was the number one free e-mail provider. If Blockbuster wins the case, the only different that would distinguish between them is service and price. Each one would try to out price the other and give better offers and provide a better service in an attempt to get hold of the market.