“I can tell you I never want to see the movies that come by mail," is what Blockbuster chief executive Jim Keyes had to say during his company's most recent earnings call. Well, apparently, someone does.
Netflix announced today that it has delivered its 2 billionth movie by mail -- a huge number for a service that launched a decade ago. Meanwhile, Blockbuster, a name that has been synonymous with movie rentals for much longer than that, is struggling to hang on to customers as they switch to over-the-mail options and more recently, over-the-Internet options for watching movies.
Truth be told, Blockbuster had tried (and I guess still is trying) to get into the rental-by-mail business, but it was too late to the game. Now, Netflix has some 10 million subscribers, and is shipping two million movies a day, according to Reuters. And, while most company's stocks have seen their values plummet in this weak economy, Netflix has seen its stock rise to all-time highs this year. Compare that with Blockbuster's stock, which slipped below a dollar a share this year.
Blockbuster recently signed a deal with TiVo to distribute its movies digitally, but it's a place that again, Netflix got to well before Blockbuster. And Keyes doesn't seem sold on the idea of digital distribution, noting recently that it is just the "shiny new toy," and just a "sliver of the industry." Instead, Blockbuster seems much more bullish on the ideas of kiosks, which have worked well for Redbox, but again, Blockbuster will be coming very late to that game, and is doing so at a time when the shift is occurring to digital distribution.
Interestingly enough, Netflix's 2 billionth movie was a Blu-ray. Netflix recently came under some fire for raising its Blu-ray rental rates. And it's a niche audience, with some 90 percent of Netflix subscribers still on DVD-only rental plans. The Blu-ray format itself is having trouble gaining a foothold, as people continue to balk at high Blu-ray player and disc prices, when compared to DVD.
A man in Alabama received the 2 billionth movie and won a lifetime membership from Netflix as a result. Of course, he had to let everyone know that he rented Nick and Norah's Infinite Playlist.